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Archive for the ‘collapse’ Category

Painting a happy face on this taxmageddon is just putting lip stick on a pig. It’s just 45 days away until the US falls off the fiscal cliff and around $600 billion or 4% of Gross domestic product goes into the black hole of deficit spending from $450 billion in higher taxes on everyone not just the rich and an automatic $150 billion in spending cuts for a total of $600 billion shift in economic activity. For those with poor math skills pay attention to this, the taxes are not a plus to the GDP it is taken from existing GDP wages to employees and profits of companies

 

The current GDP growth rate is only 1.7% so far in 2012 and 4% of that will shift into the oblivion of deficit spending and deficit reduction and still leave us with an additional shortfall of $600 Billion in deficit spending. The CBO – congressional budget office has stated in their testimony to congress that just an increase in taxes on the rich of an estimated $80 Billion in tax increases will force a lose in jobs of 700,000 and a negative .5% GDP (½%) and or a recession. Now that number is just on the wealthiest and business owners has doubled to $160 billion a year in higher taxes to the wealthiest since the election and the simple math is negative -1% GDP and 1.5 million jobs lost just from taxing the rich not the taxmageddon that will tax the crap out of everyone and everything which is 3 times that number if they don’t do anything.

 

If you allow the bush tax cuts to expire January 1, 2013 than taxes go up on everyone including 25 million low-income Americans that don’t pay any federal tax at all will pay taxes. This is what the democrats voted for on November 6 2012 and all this will at the very least cause a decline in real terms of GDP gone missing of a negative – 2.5% of the GDP growth rate figured strate line without the projection of how businesses will react or how the spending habits of people will change and they will change dramatically more negative than a -2.5% growth rate decline.

 

The dollar amount lost by doing nothing and allowing current law to expire on January 1, 2013 and then tax rates go up 5% on every one who works and or pays taxes. it will cost the American workers and the rich $450 billion total and 150 billion in spending cuts totaling $600 billion then my estimate of job losses of 5 times the 700,000 jobs or 3.5 million jobs lost and the job losses will happen as fast as the money disappears from paychecks every week. The moneys just not there anymore for us to spend or save as it is taxed away at a rate of $1.2 billion a day from higher taxes to everyone. I want to repeat this part and make this clear, this is already the law, congress doesn’t have to vote on anything the existing laws will allow this to happen January 1, 2013 and congress doesn’t need to vote on anything it’s automatic. Next is why a deal will not be made and everyone working will get the 5% tax increase unless you move out of the country or your state succeeds from the union which neither is likely.

 

The political blame games and the real goals of the Democratic Party are why no deals will be made and why we will go off this fiscal Clift or so-called taxmageddon. This will be once again blamed on the republicans for what the democrats did. (There’s a 100 year history of this) The progressive, liberal democratic parties goal has been and still is to destroy the constitutional America we know and change us into a socialist dictatorship (I believe all the evidence shows we are already a socialist dictatorship and have been the last 3 years and 10 months and even possibly the last 12 years) and doing away with the constitution and replacing it with a communist constitution and this taxmageddon is exactly what the democrats need to do that and they will try to make it look like the republicans fault (this is already being done) and the lame stream liberal progressive socialist media will help them do it with their normal lies and disinformation.

 

Here is what to expect in the next 47 days. A lot of grand standing by democrats telling you conservatives economic policies are why the economies is so bad and its Bush’s fault even know the democrats have controlled congress for almost the last 6 years.

 

It’s at this point I want to inform and or remind everyone who reads this. The democrats have now controlled congress for 5 years and 10 months the reason the economy went off the Clift and the banks collapsed in 2008 was under the control of the Democratic Party for 21 months it was not the Republicans it was the democrat controlled congress that did it by their actions or lack of actions. To believe otherwise means you have been misinformed and you believe the lies of the liberal progressive news media.

 

The democrats didn’t inherit this economic mess they caused it. http://wp.me/pO1Ho-9w 

 

So if you still think this was all done by Bush your eating the little balls of crap the liberal media has been feeding you for your entire life and the last 6 years. All you need to do is a search for congress January 2007 to 2012 and you will see the democrats have controlled everything for the whole time period and then blames republicans and Bush for what they did. To say well that’s just politics does not make it right and it doesn’t fix the mess we are in. If they are getting away with these lies it’s because some Americans like those voting in democrat party for the democratic party are allowing them to get away with it. I don’t get my news from fox I seek the truth always this is the real no spin zone. I go to the federal record and look at the numbers and if you really want the truth it’s in the numbers not the news media they all sound like parrots to me spinning their stories as they see the truth with 10 different versions or opinions about the same story and none of them are right.

 

Facts compared to opinion and views. The glass is half full or is it half empty? No matter what you opinion or view is; the same amount of water resides in the glass. its math and math is not an opinion or a view. This goes to the next part the historical events of the past that can give us a clear picture of the possibilities and the near term effects of economic events like taxmageddon.

 

I have seen many economist discuss this $450 billion tax increase like it’s a good thing and the value of the dollar will increase because the deficit would shrink and that’s would be a good thing under normal text-book economic conditions it would be, except for the facts they seem to forget that we would definitely go into a very deep recession or depression from a $450 billion tax increase and while we have a deficit of $16.4 trillion hanging over our heads that’s not good for bonds or the value of the dollar if we are borrowing $600 billion while the economy is shrinking at a rate of 3% and could quickly go 6% negative GDP  it is likely under these conditions no one will loan us any money and people who hold our bonds would sell them very fast causing a panic sell off or a crash in the bond markets.

 

This has happened before in 1980. I can tell you right now when the economy starts to decline and go into a recession under the new much higher tax rates that what the economist are telling you say it’s a good thing is idiotic and that’s being kind. As the whole dynamics of the entire economy changes very quickly in economic declines the stock markets and bond markets will change and go into a severe decline and bond markets will be up for a few days maybe and then be sold off to cover losses in other stock markets and commodities markets this is always a worldwide event and everything will all change dramatically as well. None of it will be good. It will all be bad news (do you have a 401-K) and even before the first dollar in higher taxes is stolen away from the rich, the middle class and working poor this will unfold and become history. When this happens and it will, the economists college degrees can all be thrown out the window or used as toilet paper because nothing works in severe declines. I have been in 3 severe economic declines or crashes as a business owner and an investor.

 

Currently what gives the dollars or the bonds the value they do have is the confidence that the government can pay the interest on the debt and that confidence level all changes if we go into a recession. Confidence is nothing more than a thought and as quick as we can change our minds or in one day that confidence could disipere and this could cause a second bond market collapse worse than the one in 1980 because the debt is 32 times larger than in 1980

 

The Bond Market Collapse of February 1980 The time is November, 1979; the place, the White House. Like in November 2012, a dark financial cloud hovers over Washington — not only fiscal troubles, but also the threat of hyperinflation.

 

President Jimmy Carter and Congress have been gridlocked for months, unable to deal with the brewing storm. Unlike November 2012, the next presidential election is a year away. But investors don’t wait for the ballots. Nor do they have to. They begin issuing their sell orders immediately, venting their wrath primarily in the U.S. bond market by dumping medium and long-term U.S. Treasury securities. Treasury bond prices collapse, while interest rates surge. (We are set up for this perfect storm once again triggered by taxmageddon)

 

The tipping point comes on February 5, 1980. That’s when Treasury bond prices fall so far that their yields surge above the 11% level the all-time peak reached during the Civil War. “Faced with a prolonged buyer’s strike,” says one bond market pro, “we decided to throw in the towel and get yields up to a level where some cash buyers might be shocked off the sidelines.” But the next day, panicky bondholders begin unloading bonds at any price … and there are still few takers even at record interest rates everyone is still selling. The selling is so intense that all except two of the largest, best-capitalized bond dealers on Wall Street Merrill Lynch and Solomon Brothers effectively abandon their market-making role.

 

Now, it’s no longer merely a case of a price collapse. It’s a market collapse in the literal sense of the word: The dealers themselves are packing up and going home! By February 19, the collapse gathers even more momentum, as Treasury bonds lose over 5% of their face value in a single trading day!

 

Investors aren’t just shouting their protests from the rooftops. They are shutting down the market for U.S. Treasury securities, making it impossible for the U.S. government to borrow the money it needs to stay alive — and to avoid defaults on maturing debts. 

 

Result: With Paul Volcker (idiot) at his side, President Carter (another idiot) acts, announcing an anti-inflation bombshell: An unprecedented package of CREDIT CONTROLS that clamps down on virtually all forms of credit. (Dodd-Frank bank regulations will have same effects) The U.S. economy is pushed over a cliff and into a tailspin. Carter’s chances for re-election are doomed. But the bond market recovers and the U.S. Treasury is able to resume borrowing. 

 

But this all happened when the total of all federal deficits was about $ 500 Billion and now its $16.4 trillion anything even ½ of that historical recount would destroy the country and the dollar. Inflation ran between 12% and 15% in that period from 1977 to 1982 and bonds sold are governments borrowing money to finance the spending of money they don’t have. Just imagine if this only in part happens in such a weak economy and with borrowed money amounts $16.4 trillion and a need for a least and additional $50 billion a month after taxmageddon. While at the same time the economy is in a steep decline with a president that’s adverse to business. (The perfect economic storm that will end America) This also really screws up all the CBO estimates of the impact of the recession caused by taxmageddon and things will get a lot worse than there projected declines. The economy is always a moving target.

 

It was massive deficits of that time period that caused this to happen and those deficits were only $50 billion to $75 billion a year and now there over $1 trillion a year. This extremely high 16% interest rate at the peak is what the market set is the sacrifice that investors demanded in order to kill the threat of hyperinflation or the extreme devaluation of a currency. It really never worked but they won’t tell you this because it makes both Carter and Volker look like the idiots they are. Inflation remained high and the higher interest rate had only one purpose atract money to finance deficit spending. The higher interest rates fueled inflation in higher cost to barrow money that doest reduce cost it increases cost thus inflation increases. Liberal progressives always get it backwards. This is what Washington ultimately delivered. That at least in part will happen with taxmageddon coming in just 7 weeks. (Merry Christmas)

 

The general notion here is that, given the root causes of our economic distemper, rampant financialization, over-leverage and over-indebtedness, a politically dominant parasitic banking sector, an aging population, over promised entitlements, a financial business model based on fraud, Federal Reserve monetizing of debt, and a dysfunctional political system, to mention only the top of the list how can the USD appreciate in real terms? It cannot! It only has one way to go and that’s down. There only needs to be a trigger to set this whole decline into motion and I believe its taxmageddon.

 

This is how investors play the markets and why the dramatic decline or a crash will become obvious in the next 45 days or less. Businesses and market players make their decisions based on future projections of business activity and profits or the lack of profits. All market investment is determined by future projections or guesses of economic activity 6 months before they accrue not afterwards. You can expect a crash or at least a major correction of a few thousand points in the next few weeks and up to the week before January 1, 2013. Just like the decline after the banks collapsed in September 2008 this decline will continue well into 2013 just like the one in 2008.

 

Either way whatever happens in Congress the democrats will not make a deal because they want the economic collapse. They want the crash and they need it because democrats want the country to end as we know it so they can abolish the constitution. Making a deal with the democrats and Obama will not happen and their actions and the long history of changing constitutional law through the Supreme Court in the last 100 years and especially the last 4 years of ignoring constitutional law and playing dictator or King at every turn should prove that to people who have been paying attention Democrats hate the constitution.

 

Liberal progressive democrats have worked hard to circumvent the constitution and make unconstitutional law legal through the courts. It’s a term called judicial activism. This entire deal making process will be like trying to negotiate with a terrorist that wants to kill you, it’s a useless endeavor. Democrats’ have a long history of behavior that never changes in the liberal progressive Democratic Party. So why would any sane reasonable person expect that to suddenly change now? Liberal, progressive, Democrats want an economic collapse.

 

The conservative media will keep doing what they always do giving the benefit of the doubt to the liberal democrats and they will hope and or wish that Obama and the democrats will find a middle ground or a compromise with republicans, but the last 4 years of their actions shows that doesn’t fit Obama’s or the democrats play book. It’s always their way or the highway anything else is just imaginings and hopeful thinking so far hope has gotten us into this horrible position. The only compromises made have gotten us to the current fiscal Clift otherwise known as taxmageddon everything else has been my way or the highway with the democrat’s control of the senate and Obama. I think the democrats set America up perfectly for total economic destruction with an expiration date January 1, 2013

 

You can’t make a deal with the devil and expect anything good to come from it. I don’t think John Bonner will make a deal with the devil and if he does there’s a price to pay either way all Americans will lose no matter what our politics are.

 

What you are about to witness few weeks and months no one alive has ever seen before. This will be way worse than the great depression or the civil war. Hell on earth is what is coming and it’s not years away it’s only a matter of weeks and months and I repeat it’s not years away. To think this destructive pattern of the democrats’ and Obama can continue and Americas economy can survive 4 more years is just wishful thinking.

 

You can Hope I am wrong as I really hope I am wrong, but I said in back in 2004 and in my book 2012 that came out in November 2009 this president Obama would be the last president of the United States and so far I was right. From 40 years of observing politics and studying political history. I understand how a liberal thinks and they don’t use logic. This lack of logic is why all their ideas and policies always fail it is a form of insanity and that’s why what I say here may not make any sense to a sane person but their is no logic to there thinking it is insanity.

 

We don’t have 4 more years under any president or any dictator. The book 2012 explains it all. I said in 2009 it would either happen in 2012 or by the middle of 2013 and now we are just weeks away. You will see this unfold in the next 6 to 7 weeks in the stock markets as I expect a 2500 point correction from the September highs and so far it 1000 points down with 1500 to go and it will get a lot worse in early 2013.

 

I really hope I am wrong and I know you do too.

 

By the way very soon after taxmageddon and I mean very soon after we fall apart, the real Armageddon between Israel and Iran will start. First it will be conventional weapons but it will escalate quickly after other Arab countries join Iran in an all out WAR and an attack on Israel. Israel is surrounded by nothing but enemies with combined armies in the millions and with no allies. Regardless of what Democrats say or Obama he will not back Israel, Obama is a Muslim he will side with the Muslims. If attacked by multiple countries at one time Israel will have only one choice and that’s nuclear weapons = Armageddon. Israel has claimed 80 nuclear weapons and that’s enough to destroy all the Arab or Muslim countries major cities. The deadline for this is March 2013 set by Israeli Prime Minister Benjamin Netanyahu. Here it comes! 200 million dead in one day is very possible with 80 nuclear weapons and the real sh-t hits the fan.

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Have you been watching, reading or following what has been going on in Europe with the Greek debt and now its Italy and Spain that may also need bailing out. What the hell is going on over there in socialist Europe? The socialist have finally run out of people to steal from! They can’t decide on how they’re going to print $600 billion in Euros and who’s going to be responsible to pay for that.

The latest speculation is a breakup of the European Union and a reforming of a smaller number of countries into a new union. If that happens what happens to the seven little pigs and France becomes one of them and they seem to forget that. French banks hold a lot of debt in Italy and Greek government debt. This debt is also termed by the media as sovereign debt which means government deficit spending just like we have in America it’s the same thing that’s currently destroying Europe.

What does this mean for America how will it affect you and your money?

First the liberal fringe news media whom you know are all liberal, progressives’ democrats or socialists by another name. They are hiding behind words in plain sight of a dumbed down undereducated public. While the liberals spin twist and lie about what is happening in Europe to hide the failure of their political beliefs that socialism is better than capitalism I will only tell you the scary truth.

Too much socialism worldwide has collapsed the capitalist system that supports the socialism and the parasite has killed the host. That’s why the wage base has dropped so severely in the last 4 years and now 52% of working Americans are under the middle class income bracket and the poverty level is increasing faster than it ever has before. We are turning into a third world country at lightning speed right now and the middle class only makes up 42% of the workers as wages keep dropping. The tax base hasn’t gone up in 4 years now and the federal deficits keep getting bigger.

The cost of labor keeps going up because of the new Obama healthcare rules which is included in wages cost to an employer that provides healthcare coverage to their employees. This is reported in the wage base numbers the department of labor monthly reports. Overall the wages being paid to employees are being forced down at the lower end and 49 million people have been pink slipped or fired in the last 4 years most have found new low paying Obama jobs at McDonald’s or wall mart. This is the liberal progressive democrats and Obama’s economy. This is what socialism does it redistributes wealth and creates a one class system just like in Marxist communism there is only one class and everyone is equally poor. That’s not a bumper sticker slogan that is how Carl Marx designed the communist economic system a one class system of poverty there’s your equality and everyone suffers equally.

America is getting a big sampling now of what Europe has had since the second world war an economy that only grows at the inflation rate or no real growth at all. How does it feel to be like socialist Europe?

What’s really going on now in Europe is they are trying to find hundreds of billions of dollars to put into the banks and they are blaming the banks for being under the 10% liquidity limits set by banking regulations. Where did all the money go? The government deficits and the barrowing by the governments from the banks took all their available cash and there’s none left to steal whoops I mean barrow, know I mean steal as in theft because eventually the end game is the people are responsible to pay the debt with their taxes thus they are stealing your future and the future of all the children just like we are in America. This is how socialism is supposed to work; wealth redistribution is what socialist economic systems do.

All the historical evidence of Socialism proves it is a parasite that always kills the host.

Now that banks have been dried out by the government’s barrowing all the money as the shell game goes on and on. If the European Union does get their act together and they do figure out a way and come to an agreement on how to print barrow or steal a total of about $600 billion it only fixes the problem for about 6 months and they will be back at this again by spring of 2012. (That year keeps coming up?)

The larger world problem is what happens if they don’t fix things now or later.

What is being reported is that American banks haven’t loaned any money to Greece or Italy directly but they have loaned money to France and German banks which are huge holders of Greek and Italy debt along with Portugal, Spain, Ireland, Belgium and most recently France is the new pig because it holds so much of the other pig’s debt. If Greece defaults on its debt than Italy will probably go with it as confidence in their ability to pay is lost. Than the French banks become at risk or insolvent than American banks are at risk for the money loaned to them for billions of dollars lost or at risk in this new self-created mess or a domino effect of bank failures due to government debt caused from all their socialism. The liberal progressive news media will continue to blame it on the banks.

American zombie banks will become the new pigs in America they will have to be bailed out by someone or become insolvent and close their doors like Indy Mac in California. Depositors could lose all their money if there’s another slew of bank runs like we had just 3 years ago because our government can’t afford to keep bailing out the banks there’s no more money left. The FDIC insurance just had to get a bailout last week as they ran out of money too.

We have even bigger problems this time for many reasons.

There is a market called the derivatives market which is like insurance on all forms of investments including government debt. This is like the credit default swaps that AIG sold insurance on that collapsed in 2008 when the entire banking system collapse and hundreds of billions had to be paid by AIG and other like kind insurance companies. The credit default swap market was valued at around $60 trillion in 2008 and now it’s about half that or about $30 trillion. Rumor has it that’s the credit default market has locked up again in the past few days in Europe.

The bigger problem here is this derivatives market it is over $600 trillion. (Yes that’s trillion with a T) This is why they had to bail out AIG it wasn’t just the jobs that would be lost from their collapse or the credit default swaps that the banks were holding. It was the derivatives market they needed to save by saving the AIG and make this overlapping insurance system whole again. Governments did not want anyone to know about the derivatives market at least not the general public anyway. They were afraid of a full-scale bank run that wouldn’t stop like in the 1930s bank collapse and that caused the great depression to be great and stay great. This is getting ready to happen again when Europe’s banks go down we will go with them because all our economic systems and the banks are so tied together it is unavoidable.

We are in really bad shape compared to 2008 let’s take a look at then and now. In 2008 we only had a $10 trillion federal debt now its $15 trillion and increases by $120 to $130 billion every month.

We are now barrowing or printing 43% of all federal government spending. In 2007 barrowing was only 3% the economy was bigger and the deficit was much smaller

We have very high unemployment 9.1% and that’s a very deluded number the real number is much higher around 17%. In 2007 unemployment was 5%

A disappearing middle class

Only jobs available are low paying jobs in Obama’s economy, except in North Dakota due to new oil being mined there but that not something that’s Obama’s idea if he could he would stop it.

Federal deficits of $1.9 trillion a year when including on and off budget deficits.

We are in an entirely different position now then back in 2007. The government cannot afford another bailout like in 2008. If the credit defaults swaps lock up again and if the derivative insurance market blows up there’s no one or any group of countries to bail that out again under existing circumstances.

I got news for you; that derivatives market doesn’t have to blow up to collapse the system. If you look at the hard time Europe is having trying to come to an agreement on how to come up with $600 billion and then consider the supper committee has made it public they will admit defeat on Monday October 21 2011 and they can’t come up with $120 billion in cuts and revenues/taxes. what do you thing will happen when they need trillions more to bail out the system again under all these circumstances and the clock will be ticking while fear and panic will be the only outcome.

Europe’s has no money left now and they need hundreds of billions to get them into next year. Even if they do get their act together this will be an ongoing continuous problem that will not end until it collapses the worlds banking systems.

Let me make this clear it’s not the banks it’s the government’s barrowing all the money from the banks that is causing the problems in Europe and here in America. This is the people’s money, the average saver/citizen that might have a few thousand or a few hundred thousand dollars in the bank. The liberal progressive socialist democrats are stealing all your money because they really believe its there’s not yours, its there’s to redistribute and there blaming the banks for being greedy. Keep your money in the banks at your own peril when you lose it all’ I warned you.

Get you money out of the banks before it’s too late!

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