A List Of 28 Things That Will Make You Think That There Is Something Seriously Wrong With This Country

What in the world is happening to America?  Perhaps you have asked yourself that question from time to time.  Today it seems like everything is falling apart.  Our economy is crumbling, our politicians are incompetent, we have just gotten involved in another war, corruption is everywhere and the Americans people are so addicted to entertainment that hardly anything can wake them from their stupor.  It is enough to make you think that there is just not much hope for America.  But the truth is that we should never give up.  It is when the times are darkest that the greatest heroes arise.  We truly do live in challenging times, but that just means that there are great victories to be won and great stories to be written.  There may be a whole lot of things that are very wrong with America right now, but that doesn't mean that the game is over quite yet.

Unfortunately, right now most Americans are completely asleep.  Just like during the declining years of the Roman Empire, most people that live in the U.S. are spoiled, decadent and completely addicted to entertainment.

The following is how many Americans actually plan their weeks....

Monday: Watch Dancing With The Stars

Tuesday: Watch The Dancing With The Stars Results Show

Wednesday: Watch American Idol

Thursday: Watch The American Idol Results Show

At this point, most people in this country cannot even intelligently discuss the pressing issues of our day.

In fact, 63 percent of Americans between the ages of 18 and 24 cannot find Iraq on a map and 90 percent of Americans in that same age group cannot find Afghanistan on a map.

We've got a lot of work to do.

America is in sorry shape and it desperately needs some heroes.

The following is a list of 28 things that will make you really think that there is something seriously wrong with this country....

#1 According to the Economic Policy Institute, almost 25 percent of U.S. households now have zero net worth or negative net worth.  Back in 2007, that number was just 18.6 percent.

#2 According to the Pentagon, the cost of the first week of attacks on Libya was 600 million dollars.

#3 The major food producers are shrinking the sizes of their packages so that they won't have to raise prices.  The New York Times recently did a story about one woman who was absolutely shocked when she started keeping track of shrinking package sizes at her local supermarket....

Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.

#4 It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year.  Their biggest customer is the United States.

#5 According to a recent census report, 13% of all the homes in the United States are sitting empty.

#6 20 percent of all the electricity in the United States is produced by nuclear power plants.  Many of those plants are very similar to the damaged reactors at the Fukushima nuclear complex in Japan.

#7 Barack Obama promised us that radiation from the nuclear disaster in Japan would not be a problem in the United States, but already it has shown up in milk in Spokane, Washington.

#8 Dallas Federal Reserve Bank President Richard Fisher recently said the following....

"If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when."

Of course the Federal Reserve system was designed to get the U.S. government trapped in perpetual debt so actually he should be blaming himself and his friends over at the Fed.

#9 China produced 19.8 percent of all the goods consumed in the world last year.  The United States only produced 19.4 percent.

#10 Back in 2005 at the peak of the housing bubble, the median property tax on a home in the United States was $1614.  Today, even though home values have sunk like a rock, that figure has risen to $1917.

#11 In New Jersey, home owners pay an average of $7576 in property taxes every single year.

#12 According to the Federal Reserve, the adjusted monetary base has nearly tripled since mid-2008.

#13 Thanks for all the money printing Bernanke - according to one unofficial estimate, the U.S. in on track to have an 8.3 percent rate of inflation for the year.

#14 According to a recent article posted on the website of the American Institute of Economic Research, the purchasing power of a U.S. dollar declined from $1.00 in 1913 to 4.6 cents in 2009.

#15 The Ogallala Aquifer stretches from South Dakota to Texas, it is the largest underground supply of fresh water in the world, and it is rapidly running dry.  So how is "America's breadbasket" going to continue to produce massive amounts of food for the rest of the world once that happens?

#16 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#17 The U.S. industrial base has disintegrated so badly that we could literally export our entire manufacturing output and still not balance our trade with the rest of the globe.

#18 Goldman Sachs almost always wins.  According to a recent regulatory filing, Goldman Sachs lost money on just 25 days in 2010 and on only 19 days in 2009.

#19 In 1994, the top 1 percent of all income earners paid 25 percent of all state taxes in New York.  Today, the top 1 percent of all income earners pay 41 percent of all state taxes in New York.

#20 The National Institutes of Health has spent approximately $442,340 to study the behavior of male prostitutes in Vietnam.

#21 According to an absolutely stunning recent poll, 40 percent of all U.S. doctors plan to leave the profession at some point during the next three years because of Obamacare.

#22 If the new health care law is so great, then why is the Obama administration allowing so many organizations to opt out of it?  According to the Department of Health and Human Services, more than 1,000 organizations have received Obamacare waivers so far.

#23 Large American cattle farms actually feed chicken manure to cattle because it is so cheap and because we produce way too much of it to properly dispose of as fertilizer.

#24 Every single year, Americans spend approximately 7.6 billion hours preparing their taxes.

#25 The IMF says that in order to fix the U.S. government budget deficit, taxes need to be doubled on every single U.S. citizen.

#26 Mandatory federal spending is going to surpass total federal revenue for the first time ever in this fiscal year.  That was not supposed to happen until 50 years from now.

#27 Today, the U.S. national debt is over 14 times larger than it was back in 1981.

#28 According to the National Inflation Association, when you factor in the unfunded liabilities of the U.S. government, total federal debt obligations now come to a grand total of 76 trillion dollars.




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A List Of 28 Things That Will Make You Think That There Is Something Seriously Wrong With This Country

What in the world is happening to America?  Perhaps you have asked yourself that question from time to time.  Today it seems like everything is falling apart.  Our economy is crumbling, our politicians are incompetent, we have just gotten involved in another war, corruption is everywhere and the Americans people are so addicted to entertainment that hardly anything can wake them from their stupor.  It is enough to make you think that there is just not much hope for America.  But the truth is that we should never give up.  It is when the times are darkest that the greatest heroes arise.  We truly do live in challenging times, but that just means that there are great victories to be won and great stories to be written.  There may be a whole lot of things that are very wrong with America right now, but that doesn't mean that the game is over quite yet.

Unfortunately, right now most Americans are completely asleep.  Just like during the declining years of the Roman Empire, most people that live in the U.S. are spoiled, decadent and completely addicted to entertainment.

The following is how many Americans actually plan their weeks....

Monday: Watch Dancing With The Stars

Tuesday: Watch The Dancing With The Stars Results Show

Wednesday: Watch American Idol

Thursday: Watch The American Idol Results Show

At this point, most people in this country cannot even intelligently discuss the pressing issues of our day.

In fact, 63 percent of Americans between the ages of 18 and 24 cannot find Iraq on a map and 90 percent of Americans in that same age group cannot find Afghanistan on a map.

We've got a lot of work to do.

America is in sorry shape and it desperately needs some heroes.

The following is a list of 28 things that will make you really think that there is something seriously wrong with this country....

#1 According to the Economic Policy Institute, almost 25 percent of U.S. households now have zero net worth or negative net worth.  Back in 2007, that number was just 18.6 percent.

#2 According to the Pentagon, the cost of the first week of attacks on Libya was 600 million dollars.

#3 The major food producers are shrinking the sizes of their packages so that they won't have to raise prices.  The New York Times recently did a story about one woman who was absolutely shocked when she started keeping track of shrinking package sizes at her local supermarket....

Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.

#4 It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year.  Their biggest customer is the United States.

#5 According to a recent census report, 13% of all the homes in the United States are sitting empty.

#6 20 percent of all the electricity in the United States is produced by nuclear power plants.  Many of those plants are very similar to the damaged reactors at the Fukushima nuclear complex in Japan.

#7 Barack Obama promised us that radiation from the nuclear disaster in Japan would not be a problem in the United States, but already it has shown up in milk in Spokane, Washington.

#8 Dallas Federal Reserve Bank President Richard Fisher recently said the following....

"If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when."

Of course the Federal Reserve system was designed to get the U.S. government trapped in perpetual debt so actually he should be blaming himself and his friends over at the Fed.

#9 China produced 19.8 percent of all the goods consumed in the world last year.  The United States only produced 19.4 percent.

#10 Back in 2005 at the peak of the housing bubble, the median property tax on a home in the United States was $1614.  Today, even though home values have sunk like a rock, that figure has risen to $1917.

#11 In New Jersey, home owners pay an average of $7576 in property taxes every single year.

#12 According to the Federal Reserve, the adjusted monetary base has nearly tripled since mid-2008.

#13 Thanks for all the money printing Bernanke - according to one unofficial estimate, the U.S. in on track to have an 8.3 percent rate of inflation for the year.

#14 According to a recent article posted on the website of the American Institute of Economic Research, the purchasing power of a U.S. dollar declined from $1.00 in 1913 to 4.6 cents in 2009.

#15 The Ogallala Aquifer stretches from South Dakota to Texas, it is the largest underground supply of fresh water in the world, and it is rapidly running dry.  So how is "America's breadbasket" going to continue to produce massive amounts of food for the rest of the world once that happens?

#16 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#17 The U.S. industrial base has disintegrated so badly that we could literally export our entire manufacturing output and still not balance our trade with the rest of the globe.

#18 Goldman Sachs almost always wins.  According to a recent regulatory filing, Goldman Sachs lost money on just 25 days in 2010 and on only 19 days in 2009.

#19 In 1994, the top 1 percent of all income earners paid 25 percent of all state taxes in New York.  Today, the top 1 percent of all income earners pay 41 percent of all state taxes in New York.

#20 The National Institutes of Health has spent approximately $442,340 to study the behavior of male prostitutes in Vietnam.

#21 According to an absolutely stunning recent poll, 40 percent of all U.S. doctors plan to leave the profession at some point during the next three years because of Obamacare.

#22 If the new health care law is so great, then why is the Obama administration allowing so many organizations to opt out of it?  According to the Department of Health and Human Services, more than 1,000 organizations have received Obamacare waivers so far.

#23 Large American cattle farms actually feed chicken manure to cattle because it is so cheap and because we produce way too much of it to properly dispose of as fertilizer.

#24 Every single year, Americans spend approximately 7.6 billion hours preparing their taxes.

#25 The IMF says that in order to fix the U.S. government budget deficit, taxes need to be doubled on every single U.S. citizen.

#26 Mandatory federal spending is going to surpass total federal revenue for the first time ever in this fiscal year.  That was not supposed to happen until 50 years from now.

#27 Today, the U.S. national debt is over 14 times larger than it was back in 1981.

#28 According to the National Inflation Association, when you factor in the unfunded liabilities of the U.S. government, total federal debt obligations now come to a grand total of 76 trillion dollars.




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Think The Japanese Disaster Is Just What The Keynesian Doctor Ordered? Mo Says No

That would be Mohamed El-Erian from Pimco, by the way, who first among the lunatic fringe (here's looking at you Goldman and Kudlow), admits that contrary to what all the Koolaid guzzlers claim, the Japanese quake may not be what the Keynesian doctor ordered after all. We urge readers to read this piece as a counterpoint to Goldman's stern defense that the Japanese quake is but a scratch, and one that will lead to world peace, prosperity and a doubling (give or take) of global GDP. In fact, El-Erian tells all the pundits who in addition to permabulls are also suddenly nuclear physicists and geologists, to shut the hell up, "as tempting as they may be, analytical shortcuts are best avoided at this early stage. It will take time and thorough analysis to specify the true consequences of Japan’s triple calamity, including the longer-term impact on its economy and that of the rest of the world. The Japanese have shown admirable courage in the face of unthinkable tragedy. I have no doubt that a successful reconstruction program will lead their country to recovery. In the meantime, however, the urgency of restoring a sense of normalcy and hope to a dramatically wounded society warrants thoughtful and deep analyses." On this matter, we couldn't agree more.

From PIMCO:

Understanding Japan’s Disasters, by Mohamed El-Erian

Japan’s reconstruction challenge will likely be more difficult than after the Kobe earthquake.Negative wealth and income effects this time around will be more severe, and the recovery process will probably take longer and be more complex.Japan's disasters will add to the global economy’s headwinds.

As we all struggle to comprehend the economic and financial impact of Japan’s calamity, it is tempting to seek historical analogies for guidance. Indeed, many have been quick to cite the aftermath of the terrible 1995 Kobe earthquake. But, while that example provides some insights, it is too limited to understand what lies ahead for Japan, and excessive reliance on it could undermine appropriate policy responses, both in Japan and abroad.

First, let us consider the similarities between Japan’s current tragedy and that of 1995. Both involved terrible earthquakes that resulted in tremendous human suffering and large-scale physical damage. Both required the Japanese government to display considerable agility in its rescue efforts. Both triggered multiple offers of help from friends and allies around the world. In both cases, wealth destruction was accompanied by disruptions to daily economic life.

There are also important forward-looking similarities. As with the aftermath of Kobe, the current focus on rescuing survivors will be followed by a huge reconstruction program. Massive budgetary allocations will be made (2% of GDP in the case of Kobe). Affected households will receive financial assistance to help them restore some normalcy to their lives. Roads, housing, and much other infrastructure will be repaired and upgraded.

These similarities have led several economists to provide early predictions of the national and global economic consequences, including a sharp V-like recovery in Japan’s growth rate in 2011, as the initial downturn is followed by a surge in economic activity, implying a rapid recovery in Japan’s tax base and level of GDP. Such predictions counsel caution against over-reaction by policymakers outside Japan. Rather than immediately incorporating Japanese developments into their thinking, policymakers should treat the effects on the global economy as “transitory” – that is, temporary and reversible – and thus “look through” them in designing their responses.

But there is a risk that this approach could understate the Japanese disaster’s domestic and international consequences. As such, it could contribute to insufficient responses in Japan itself – from the government to individual companies and households – as well as in other countries. Indeed, such a mal-diagnosis could delay what I believe will be an eventual solid recovery in Japan.

Five factors suggest that Japan faces a uniquely difficult and uncertain set of challenges. First, the economic damage from Japan’s three calamities (a horrifying earthquake, a devastating tsunami, and a nuclear crisis) may well be double that of Kobe. And, unlike Kobe, these calamities did affect Tokyo – indirectly, fortunately – where some 40% of Japan’s industrial production is located.

Second, Japan’s public finances are weaker than in 1995, and demographic factors are less favorable. Domestic public debt today stands at roughly 205% of GDP, compared to around 85% in 1995. The country’s sovereign rating is AA-, not AAA, as it was 16 years ago. This erodes the flexibility and ultimate effectiveness of fiscal responses.

Third, benchmark interest rates are already near zero, and have been for a while. This undermines the potency of monetary policy notwithstanding bold and imaginative efforts by the Bank of Japan to inject liquidity into the economy.

Fourth, the addition of destabilizing nuclear uncertainty to the terrible impact of the natural disasters amplifies the reconstruction challenges. Given the damage and dangers, it will take time for Japan to restore fully its power-generation capabilities, affecting the potential GDP growth rate. Food safety is also a concern, as is the economic impact of nuclear uncertainties on the Japanese psyche.

Finally, Japan’s external environment today is more challenging. During the post-Kobe reconstruction period, world demand was buoyant and global productivity surged, owing to China’s gathering boom, America’s information-technology and communications revolution, and political and economic convergence in Europe.

Today, aggregate demand in advanced economies is still recovering from the global financial crisis, while systemically important emerging economies like Brazil and China are tapping their policy brakes in order to counter economic overheating. Meanwhile, on the supply side, countries are dealing with high and volatile commodity prices, including an oil-price spike as a result of the Middle East uprisings.

If this analysis proves correct, it implies that Japan’s reconstruction challenge will be more difficult than after the Kobe earthquake. Negative wealth and income effects this time around will be more severe, and the recovery process will probably take longer and be more complex.

At the national level, this calls urgently for a degree of unity and decisiveness that has been absent from Japanese politics for years. Without it, the authorities will find it difficult to communicate and implement a medium-term economic vision that puts rapid sustained growth, and not just reconstruction, at the core of the policy response.

Japan's disasters will add to the global economy’s headwinds – be they the impact of the initial fall in consumption in the world’s third-largest economy, or disruptions to global supply chains (particularly in technology and autos). And Japan’s nuclear crisis will mean greater uncertainty about nuclear power in other countries.

There is also a financial angle, the importance of which depends on the mix of new government borrowing, debt monetization, and repatriation of Japanese savings that is used to fund Japan's reconstruction program. The greater the repatriation component, the larger the negative impact on some financial markets.

So, as tempting as they may be, analytical shortcuts are best avoided at this early stage. It will take time and thorough analysis to specify the true consequences of Japan’s triple calamity, including the longer-term impact on its economy and that of the rest of the world.

The Japanese have shown admirable courage in the face of unthinkable tragedy. I have no doubt that a successful reconstruction program will lead their country to recovery. In the meantime, however, the urgency of restoring a sense of normalcy and hope to a dramatically wounded society warrants thoughtful and deep analyses.

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Why I Think Economic Growth & Stock Prices Are Going Up

Change is in the air, and it’s happening all around. There is growing expectation that both the Bank of England and the European Central Bank will soon raise their benchmark interest rates. The inflation rate in the U.K. just hit 4.4% in February, which is more than double the central bank’s annualized target of two percent. Higher oil prices aren’t helping the situation and you can bet that, over the coming quarters, there will be increasing pressure on central banks around the world to raise interest rates. The interest rate cycle has already begun to reverse.

In almost all occasions, higher interest rates for borrowing don’t help the economy. In this particular situation, however, increased rates won’t necessarily hurt economic growth. Because we’re coming from a base of rates at record lows, businesses and consumers can handle an increase of point or two. A modest rise in short-term interest rates isn’t going to hurt an already lackluster housing market.

The other big change that’s in the air for investors is the upcoming earnings reporting season. Because of the shocks from Japan and Libya, the market hasn’t run up in anticipation of the numbers. I think we’re going to get strong earnings, especially from large corporations that continue to increase their selling prices. This pricing action goes right to the bottom line and all indications are for a strong first quarter.

If you think about all the shocks that financial markets have had to deal with over the last few months, you might agree with me that equities have held up exceptionally well. The one thing that investors don’t like is uncertainty. So far this year, we’ve had a regime change in Egypt, major civil protests in other big oil-producing countries, battles in Libya, record-high prices for food and precious metals, and a catastrophic earthquake in the world’s third largest economy. Yet, the S&P 500 Index is only about 45 points from its 52-week and three-year highs. This to me is exceptional, and it makes me think that stock prices could go a lot higher this year.

Goldman Sachs is predicting that the world economy will grow by about 4.8% this year. JPMorgan Chase expects 4.4%. According to Bloomberg, the average global growth rate over the last 20 years is around 3.4%.

Now, as we all know from history, economic booms (in Western countries) tend to follow cataclysmic events like war and natural disasters. As the world’s third largest economy, Japan has to engage in a multi-year rebuild that will be the cause of much higher than normal domestic economic stimulus. This unforeseen economic spending could have quite a positive effect on the global economy (lumber stocks remain strong) and will only add to overall growth rates.

So, from my perspective, the outlook for both the domestic economy and the stock market continues to improve. The one certainty I do know going forward is that there will be increasing pressure on interest rates. Right now, the stock market and the economy can handle this eventuality.

Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.

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Still Think the Dollar is Safe?

Even the president of the Federal Reserve Bank of Dallas, Richard Fisher, said today that the U.S. is on a path towards insolvency. “I look at this as a tipping point”, “…its’ going to be very painful”, he said after a speech at the University of Frankfurt.

ZeroHedge.com reports that Bank of America’s chief chartist Mary Ann Bartels, said there is a possibility for another 10% drop in the broader market index, while also reporting that incredibly, the dollar has lost 7.5% of its value in less than 3 months (since January 7th 2011) and more than 17% in just 8 months since August 2010.

Oil is spiking with all of the Middle East conflict, while OPEC expects $120 oil soon.
Gold and Silver are setting new highs once again.

The world continues to lose the credibility of the dollar

The U.S. government continues to overspend (more than it takes in revenue) by nearly $80,000.00 per second of each day. The monthly deficit is equivalent to giving every single person in Shreveport Louisiana a Million Dollars, or lets say Fayetteville North Carolina, or how about Yonkers New York or Spokane Washington. Gee I bet it wouldn’t take long to just simply give every working person in the U.S. a million dollars at this rate… I wonder who’s getting all this money…

While the political machine begins to ramp up for the 2012 elections, chances are that the politicians will not have the will power to do anything significant about the current federal spending, or state spending for that matter.

The point is, the dollar is in increasing danger of a potential severe drop in value, a situation that could come on very quickly and avalanche. Some say that this will very likely occur especially if the dollar index drops below 75 – or worse yet, 71.

What can the regular person do about any of this? The best thing is to simply be aware of the possibility and prepare or ‘hedge your bets’ accordingly. Now, more than ever, is probably a good time to be sure that your ‘ducks are in a row’, and your preparedness plans are nearly complete. The world is in uncharted territory and we should not assume that the world’s economic systems will somehow remain solvent and credible. Things do change, and not always for the better.

Look at the bright side, if you believe that there is real risk, then you will likely take action, whatever that may be. That is a good thing.

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us dollar index chart vs gold chart

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I Shudder to Think

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If the Bloomberg National Poll data highlighted in "Americans in Poll Show Little Confidence With Plurality Perceiving Decline" reflect an economy in the throes of a nearly two-year old recovery, I shudder to think just how bad things are going to be when politics and financial markets force Washington to stop borrowing and spending like a drunken sailor, the Fed no longer has the political support and practical wherewithal to keep creating money out of thin air, and the masses figure out just how badly they've been screwed by those in charge and at the top of the economic food chain.

Only 1 American in 7 has faith a lasting economic recovery has taken hold and a plurality say they are personally worse off than they were two years ago.

Almost half of the respondents in a Bloomberg National Poll conducted March 4-7 believe the U.S. is in a “fragile” rebound and could fall back into recession. More than a third of the country believes the U.S. never emerged from recession.

Sixty-three percent of Americans say the nation is on the wrong track, compared with 66 percent who said so in December, which was the lowest in the national mood in the one and a half years the Bloomberg poll has been conducted.

The gloomy outlook contradicts economic data showing an economy on the mend, including six quarters of economic growth, a 95 percent rise in the Standard & Poor’s 500 index over the past two years and job growth last month of 192,000. The National Bureau of Economic Research officially dated the end of the recession to June 2009.

Almost half of poll respondents say they are personally worse off than they were two years ago, when the country was losing 796,000 jobs a month and the economy was shrinking at a 4.9 percent annual rate. The stock market hit its post-financial crisis low two years ago yesterday.

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