“We are entering into a global depression the likes of which the world has never seen.”

David Morgan is predicting “We are entering into a global depression the likes of which the world has never seen.”

“When we enter a depression, people cannot keep up with inflation. So, they work even harder or more hours to try to make ends meet.”

https://usawatchdog.com/entering-a-global-great-depression-david-morgan/

Consumers paying 7.4% more for food than they were last year--could lead to macro-economic repercussions by Fall

Karl Denninger at The Market Ticker warns:

Now let me point out that we’re not quite where you have to ring the “oh crap” bell yet. There’s another month or two before that happens — but by June, if the trend we’re seeing here hasn’t broken this will get into the forward economic analysis mindspace of most of the people who look at this stuff.

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HYPERINFLATION: By January, 2015 if not by October, 2014

THE BLAZE: It's coming.

Understanding Inflation

VIDEO: This is extremely important given that Obama's Fed Chairman (Ben Bernanke) is considering another round ("QE3") of "printing" money!

Elizabeth Scalia: "In the past few weeks I’ve heard some surprising people admit they’ve been arming themselves and purchasing ammunition."

Startling news from The Anchoress:

What’s interesting is that I am hearing similarly discomfited talk around me, and seeing it in my emails. In the past few weeks I’ve heard some surprising people admit they’ve been arming themselves and purchasing ammunition — one such discussion happened all around me at the hairdresser’s while I sat and listened. The stylist and his boss, they’re storing food and arming themselves. The chiropractor who popped in to say hello while taking his afternoon stroll said he is armed, too: “never in my life thought I’d have a gun in the house, now we have two.”

They’re arming, they say, because they “see it all going bad.” These same folks who voted for Barack Obama in 2008 were now asserting an idea the far-left had floated around before that election, but instead of “Bush is going to install martial law and suspend elections.” they’re saying it of Obama. “He paid off his friends and did nothing to create jobs and he wants it all to go bad, because then he can stay in power and dictate.”

Yeah, it seems as paranoid and nuts as it did when it was said about Bush, but this stuff is not being said in an extremist corner of the internet — it’s being said in a middle-class suburban salon in an area where 30% (or more) of the businesses are now shuttered, and houses are being foreclosed upon and then re-occupied seemingly overnight, creating what the stylist called “a neighborhood full of changes and no hope.

Important message from the National Inflation Association

The Truth About Obama's Jobs Bill

On Thursday evening, President Obama gave a speech to a joint session of Congress discussing the jobs situation here in America. The purpose of Obama's speech was to convince the American public and their elected representatives in Washington to support Obama's new $447 billion 'American Jobs Act', which has a cost that is 49% larger than the $300 billion act most people were expecting. NIA believes this bill will do nothing to reduce unemployment in America and that it is nothing but another stimulus bill in disguise that will add to our budget deficits.

Obama's bill proposes a $4,000 per employee tax credit for businesses that hire somebody who was previously unemployed for 6 months or more, at a cost of $8 billion. At the same time, Obama wants to extend emergency unemployment compensation (EUC), which allows Americans who have exhausted standard unemployment benefits that last for 26 weeks to continue receiving them for between 20 and 53 additional weeks. EUC benefits are set to expire at the end of 2011 and continuing them through the end of 2012 will cost U.S. taxpayers $49 billion.

It is totally absurd for Obama to give employers money to attempt to hire people he is simultaneously paying to stay out of work. What makes this even more outrageous is that employers have an incentive not to hire recently laid off workers, when only those unemployed for 6 months or more will bring them a $4,000 check. If this bill is passed it will make the unemployment situation in America far worse than it already is.

NIA has heard from members who own farms and have positions on their farms available, but can't find anybody interested in working for them and filling the available positions. Every time they hire somebody to work on their farm, the worker purposely does a poor job and tries to get fired. Their sole purpose of getting a job is to convince their local unemployment agency that they are trying to find employment so that they can keep receiving unemployment benefits, when in reality they are trying to take advantage of the system.

Obama is right that any future recovery will be driven by our businesses and our workers, but if Washington wants to make a positive difference the only step it should take to improve our people's lives, is get out of their lives. It is impossible for any piece of legislation including Obama's 'American Jobs Act', to improve the employment situation here in America. Obama needs to remove any government programs already in place that interfere with the free market. NIA believes that if the U.S. eliminated all unemployment benefits and also got rid of the minimum wage, it would cause the unemployment rate to return to healthy levels.

U.S. employees earning up to $106,800 annually currently pay a 4.2% payroll tax that is scheduled to revert back to 6.2% in 2012. Obama not only doesn't want employee payroll taxes to raise back up to the historical level of 6.2%, which went into effect in 1990, but he wants to further reduce them to 3.1% for 2012. The annual cost of this employee payroll tax reduction is estimated to be $175 billion. In an attempt to help small businesses, Obama also wants to cut employer side payroll taxes in half from 6.2% to 3.1% on the first $5 million of payroll, while eliminating employer side payroll taxes for new hires. The annual cost of this employer side payroll tax reduction is estimated to be $65 billion.

NIA believes all payroll taxes should be eliminated. Americans who make payroll tax payments today are paying for other Americans to receive entitlement programs that they will never receive. Social Security and Medicare are already on the verge of insolvency. By the end of this decade, NIA believes Americans receiving Social Security checks will be receiving checks that don't have any purchasing power and aren't worth cashing. Americans would be much better off if they were able to use the money they currently spend on payroll taxes to accumulate physical silver instead. Only Americans with enough savings in physical gold and silver will be able to retire in the future.

Obama's bill also provides $35 billion in state and local government aid, $50 billion in infrastructure repairs, $10 billion for a national infrastructure bank, $30 billion for school modernization and repairs, and $15 billion in housing expenditures. Unfortunately, the jobs Obama's bill will create for construction workers, teachers, veterans, and the long-term unemployed, are only temporary jobs that will vanish after the bill expires, and the money printed to pay these workers will steal from the purchasing power of American workers who already have jobs today. There is no doubt about it that America's infrastructure is decaying and we need to build new roads and bridges, but this is something that we can't afford to do until we return to an economy that is based on production instead of consumption.

We need to return to a trade surplus and begin paying off our debt before we can afford to make investments into infrastructure. China can afford to build newer airports and faster railroads because they have a $254 billion trade surplus and $3.2 trillion in foreign exchange reserves that they are better off spending on infrastructure improvements than keeping parked in U.S. dollars that will soon be worthless.

Obama says that everything in his bill will be paid for, but NIA wonders how? The government is claiming this isn't another stimulus bill and Obama didn't mention the word stimulus once during his speech. The truth is, NIA believes all of the measures in this bill will have to be paid for by borrowing and printing money, which will increase our budget deficit, expand the money supply, and lead to massive price inflation.

The jolt that Obama is trying to give to the economy he admits has stalled, is the same economy he tried to jolt with the American Recovery and Reinvestment Act of 2009, which put the U.S. $787 billion deeper into debt. NIA said at the time this stimulus bill was passed that when it failed to produce the results the government said it would, instead of admitting that stimulating the economy failed and reversing course, they will say the stimulus didn't work because it wasn't big enough and attempt to pass further stimulus bills by making new false promises.

Obama is lying to the public just like Congress recently did in regards to its bill to raise the debt ceiling. Congress deceived Americans into believing that in return for raising the debt ceiling so that the government can continue operating as it is today, "spending cuts" would be made to lower future budget deficits. These so called "spending cuts" turned out to be minor reductions to very large spending increases, with even these minor reductions not beginning until early 2013. Government spending is set to rise every single year until the dollar doesn't have any purchasing power left.

Obama said in his speech last night that, "while corporate profits have come roaring back, smaller companies haven't." The reason this is true is only the largest banks and the companies they do business with have direct access to the Federal Reserve's cheap and easy money. If the Fed didn't bail out all of the banks on Wall Street that made risky leveraged up bets with other people's money for the sole purpose of paying their employees huge bonuses, smaller banks would have acquired their assets in bankruptcy court for pennies on the dollar and be prospering today. Instead, small banks that made sound decisions were punished for doing the right thing. The Fed has made it even more difficult than ever for them to compete with the large banks that should be out of business.

If the Fed and Treasury didn't bail out Wall Street, the world wouldn't have come to an end like former-Treasury Secretary Henry Paulson conned everybody into believing. The truth is, we would be better off today because the bad assets would have been liquidated. The bad assets that caused the financial crisis of late-2008/early-2009 still exist today. The main difference between back then and now is, the size of the Fed's balance sheet has doubled to $2.862 trillion due to the toxic assets they purchased, and the world is now flooded with excess liquidity of U.S. dollars.

It is impossible for the U.S. not to feel the consequences of the money we squandered fighting wasteful wars in Iraq and Afghanistan, and maintaining military bases all around the world. It is impossible for the U.S. not to feel the devastating effects of interest rates that have been left artificially low for way too long. When you have an artificial boom, that boom will eventually go bust and the more that is done to prop a phony economy up that is built on U.S. consumers spending money they don't have, the harder the economy will fall in terms of high unemployment, high inflation, and a total lack of purchasing power that will cause a permanent decline in the U.S. standard of living.

The fact that Obama felt the need to demand that Congress pass his bill 17 times in 1 speech, shows that nothing positive will come out of this bill for the average American citizen.  The only people who will benefit from this bill are bankers on Wall Street who are in line to earn huge fees on the infrastructure deals that get funded by the new national infrastructure bank. While the official U.S. Bureau of Labor Statistics (BLS) unemployment rate in August was 9.1%, down from its peak in October of 2009 of 10.1%, the real rate of unemployment including both short and long-term discouraged workers is now 22.8%, up from 22% in October of 2009 and a new high since the Great Depression in 1933. By further impeding the free market, Obama's bill will further misallocate what little resources Americans still have left before hyperinflation arrives.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

So now we have high unemployment and high inflation

Oh goody! All of this stagflation is almost enough to make one nostalgic for the 1970s.

China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills...

CNBC:

Treasury bills carry lower interest rates than longer-term Treasury notes and bonds, but the longer term notes and bonds are exposed to a greater risk of losing their value to inflation. To the degree that the $1.7 trillion in short-term U.S. Treasury bills extant as of March must be converted into longer-term U.S. Treasury securities, the U.S. government will be forced to pay a higher annual interest rate on the national debt.

As of the close of business on Thursday, the total U.S. debt was $14.34 trillion, according to the Daily Treasury Statement. Of that, approximately $9.74 trillion was debt held by the public and approximately $4.61 trillion was “intragovernmental” debt.

Read the whole thing

If you really believe in America, read this

The Ownership Society Institute (OSI) has been claiming that its Rise Up America (RUA) plan to reform the US Government, kick-start the economy, immediately eliminate over $100 trillion in unfunded US debt and deliver the American Dream of financial independence to every American is the route the political parties should be taking rather than the present slash and burn Republican plan to cut benefits, services and safety nets or the totally irrational spending spree the Democrats are planning to pursue right into Federal as well as state, county and city bankruptcy.

For those of you unfamiliar with the Rise Up America plan it is based on a simple tax shelter device used by the wealthy that has allowed the likes of Bill Gates and Warren Buffett to amass $50 billion fortunes without so much as paying one dime in income tax. The device is simple – the appreciation in the value of their stock is not taxed currently – or ever if they don’t sell shares and pay the 15% capital gains tax. RUA by privatizing the entire 15.3% of annual payroll tax and allowing it to be placed in an unreachable investment account and invested in the stock market for every taxpayer’s working life will enable every American to become a millionaire at retirement. See tables here. The appreciation in their stock over the years will enable them to escape the current taxation of their gains.

From the chart below one would have to be delusional or fatally partisan not to believe that this is the moment for the people to jump on the RUA bandwagon and institute the RUA plan at every level of government. The expectations for stock market returns after inflation will be over 11% which if it holds would mean the average American family ($50,000 annual income at today’s price levels) would generate a $14, 200,000 nest egg after his or her 40-year working life. Now this sounds too good to be true but that is what the calculator tells us. Remember in 2006 Warren Buffet made $833 million each and every month for the entire year as that was the result of his accumulating stock the appreciation on which he paid no tax. RUA merely adopts that shelter to make the poor rich and the rich ever so much richer.

Dick McDonald, General Manager
Ownership Society Institute
April 6, 2011

Few protesters in the Middle East connect rising food prices to U.S. monetary policy. But central bankers do...

WSJ: The Federal Reserve Is Causing Turmoil Abroad

In accounts of the political unrest sweeping through the Middle East, one factor, inflation, deserves more attention. Nothing can be more demoralizing to people at the low end of the income scale—where great masses in that region reside—than increases in the cost of basic necessities like food and fuel. It brings them out into the streets to protest government policies, especially in places where mass protests are the only means available to shake the existing power structure.

The consumer-price index in Egypt rose to more than 18% annually in 2009 from 5% in 2006, a more normal year. In Iran, the rate went to 25% in 2009 from 13% in 2006. In both cases the rate subsided in 2010 but remained in double digits.

Egyptians were able to overthrow the dictatorial Hosni Mubarak. Their efforts to fashion a more responsive regime may or may not succeed. Iranians are taking far greater risks in tackling the vicious Revolutionary Guards to try to unseat the ruling ayatollahs.

Probably few of the protesters in the streets connect their economic travail to Washington. But central bankers do. They complain, most recently at last week's G-20 meeting in Paris, that the U.S. is exporting inflation.

China and India blame the U.S. Federal Reserve for their difficulties in maintaining stable prices. The International Monetary Fund and the United Nations, always responsive to the complaints of developing nations, are suggesting alternatives to the dollar as the pre-eminent international currency. . .

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INFLATION NATION

Cause and Cure of Inflation

1. Inflation is an increase in the quantity of money and credit. Its chief consequence is soaring prices.

2. The most frequent reason for printing more money is the existence of an unbalanced budget.

3. The causes of inflation are not, as so often said, “multiple and complex,” but simply the result of printing too much money. There is no such thing as “cost-push” inflation.

4. Price controls cannot stop or slow down inflation. They always do harm.

5. Prolonged inflation never “stimulates” the economy. On the contrary, it unbalances, disrupts, and misdirects production and employment.

6. To avoid irreparable damage, the budget must be balanced at the earliest possible moment, and not in some sweet by-and-by.

INFLATION IN ONE PAGE

WSJ: Taxes, Depression, and Our Current Troubles

This is an extremely important article. I wish everyone would read it all!

Here are three excerpts:

While Fed policy was undoubtedly important, it was not the primary cause of the Great Depression or the economy's relapse in 1937. The Smoot-Hawley tariff of June 1930 was the catalyst that got the whole process going. It was the largest single increase in taxes on trade during peacetime and precipitated massive retaliation by foreign governments on U.S. products. Huge federal and state tax increases in 1932 followed the initial decline in the economy thus doubling down on the impact of Smoot-Hawley. There were additional large tax increases in 1936 and 1937 that were the proximate cause of the economy's relapse in 1937.

Further down in the article:

The damage caused by high taxation during the Great Depression is the real lesson we should learn. A government simply cannot tax a country into prosperity. If there were one warning I'd give to all who will listen, it is that U.S. federal and state tax policies are on an economic crash trajectory today just as they were in the 1930s. Net legislated state-tax increases as a percentage of previous year tax receipts are at 3.1%, their highest level since 1991; the Bush tax cuts are set to expire in 2011; and additional taxes to pay for health-care and the proposed cap-and-trade scheme are on the horizon.

And a summary (I haven't included his discussion of the gold standard and how that figures into our current situation):

The lessons here are pretty straightforward. Inflation can and did occur during a depression, and that inflation was strictly a monetary phenomenon.

My hope is that the people who are running our economy do look to the Great Depression as an object lesson. My fear is that they will misinterpret the evidence and attribute high unemployment and the initial decline in prices to tight money, while increasing taxes to combat budget deficits.

Please read the whole thing!

There are some very important events unfolding in the markets right now that portend disaster for the U S economy

Are You Ready for Massive Inflation?

A graph is worth a thousand words

Unless we cut spending now, we’ll be setting up an inflationary ride like nothing we’ve seen before.

The writing on the wall

Read it:

• You can’t borrow as much as he [Obama] will need to without raising interest rates that hurt the economy;

• The massive amount of spending will trigger runaway inflation once the economy starts to recover;

• His overhaul of the tax code (still in the planning phases) and his intervention in corporate management will create such business uncertainty that nobody will invest in anything until they see the lay of the land;

• His bank program is designed to help banks, but not to catalyze consumer lending. And his proposal for securitization of consumer loans won’t work and is just what got us into this situation.

So Mr. Obama should enjoy his poll numbers while he may.

Obama sows seeds of demise

Fraudulent “Credit Crisis” Paves Way for Economic Disaster

Doing the kind of investigative reporting we should expect from the major media, a financial research and consulting firm has released a major analysis of the “credit crisis” that concludes that the claims made by Treasury Department Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke to justify a socialist takeover of the financial industry were demonstrably false.

The analysis, Flawed Assumptions about the Credit Crisis: A Critical Examination of US Policymakers, concludes that the result of the unjustified massive federal intervention in the economy could be similar to the economic crisis in the Weimar Republic of 1922, where disastrous hyperinflation made the currency worthless and threatened the nation’s political system and stability.

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