Archive for the ‘recession’ Category

We don’t really have to January 2, 2013 to go off the fiscal cliff. It’s December 4, 2012 and congress goes on Christmas vacation Friday December 14th 2012 and they don’t come back till after we fall off the cliff. Taxmageddon will show up in the stock markets and will come well before January 1, 2013. If no deal is done before that date of Friday December 14th 2012. (There won’t be any deal) The stock market will show the results prior to the date not afterwards. If you have a 401-k or any other investment in stocks or bonds brace yourself for heavy losses.

This is a warning on Friday December 14th or in just 10 days all stock markets will start a rapid decline worldwide and this will continue into Monday the 17th and all the way to Friday the 21st December 2012 if no deal is done. The republicans will stay in Washington but the democrat controlled Senate will be ordered shut down by Harry read and the correction or crash will take place. The democrats will blame the republicans as that is what they are already doing even before there’s anything to blame anyone for. What will the blame game be like after markets crash? Friday December 14 is the normal scheduled Christmas break for congress.

The real cliff comes from a market reaction to the lack of any deal that stops America’s economy from a $600 billion shock. That shock comes from the shift in taxes and spending equal to a 4% negative to GDP and the biggest losses will not be the taxes themselves but the market’s reaction to those tax increases could cost trillions of dollars in lost stock values.

If the stock market’s losses are 2000 points on the DJIA for example in dollars it is equal to $2 trillion in lost stock values. This is the true result of Taxmageddon if congress allows us to go off the Cliff. It has been said for every 1000 points lost on the DJIA is approximately $1 trillion is lost in stock values across all U.S. markets.

Currently Republicans have no options to avoid the fiscal Clift or taxmageddon that will not destroy the economy and all the choices that democrats will allow to pass the senate will force a recession. All the options are really bad and the only one that will work for just a little while is keep everything the way it is and extend the current tax rates, but Obama has said and he insists he will not except that outcome of kicking the can down the road. If anyone is holding the middle class hostage it is Obama not the republicans in the house. Obama wants a grand bargain for which there is no good economic out come for anything he wants, what Obama wants will cost millions of jobs. That’s not an option Republicans can agree to.

Obama has proven over the last 4 years he understands nothing about economics, business or how jobs are created. It needs to be said Obama’s an idiot to top all idiots; he is the king of fools and will lead America to its complete economic destruction in the next few weeks. Obama’s winning of the election doesn’t prove his genius; it just proves how stupid the American people have become, all because of Obama phones that cheaply bought votes with tax payer’s money. (That is if he really won? As I believe the election was a complete fraud)


Obama says he will only accept a full 4.9% tax increase to the wealthiest tax payers and they are the job creators. That’s not a bumper sticker slogan anymore or a political talking point, it is just the facts. By the numbers it can be proven true that what Obama is demanding will certainly put us in a recession according to the congressional budget office = CBO. Let’s look at what faces the American people in the next few weeks and what the democrats have done in the past 6 years of the control of congress since January 2007. The American people have been setup with this no win scenario that we now have and democrats will be able to blame it all on the republicans no matter what republicans do because democrats control 85% of what is so-called the main stream media.

If congress does nothing we get the full force of the fiscal Clift which is a $600 billion shift in taxes and spending cuts. The media has been talking about this fiscal Clift but no one clearly explains exactly what that means. I don’t think any of media types are smart enough to see what it is or what it truly means for the economy, but I will attempt to explain it here. It’s not a matter of speculation it’s just really simple math and understanding economics.

If Republicans do what Obama and the liberal progressive democrats wants here is what the congressional budget office said about a deal republicans offered to raise taxes on the wealthy in the budget act of 2011 debt ceiling increase that threaten to shut down parts of government.

The CBO scored the proposal the republicans offered in 2011 that would raise taxes on the wealthy by roughly $80 Billion. The result was a recession and negative GDP growth of .5% or ½ %. They also said it would force 700,000 private sector jobs to be lost and by the end of 2013 push the unemployment rate from the current rate up to 9.1%. Again this was in 2011 and now Obama and the democrats want double or two times that much to $160 Billion in higher taxes from the job creators or the wealthy and that means twice the job losses to 1.4 million and twice the negative GDP growth -1%. This is what Obama wants; this is his so-called grand bargain. Only a complete idiot would think that’s a good idea, but that’s just Obama.

This doubling of higher taxes to the wealthy tax payers is the option that Obama is giving the republicans and this is not an option republicans can except, but it is insanity to ask for a tax increase that will force 1.4 million jobs to be lost to the middle class then lie about wanting to protect the middle class and force a recession in an already very weak economy that will loss 1.4 million jobs in the middle class. (Twisted logic) The only ones here protecting the middle class is the republicans not Obama.

How can the republicans agree to such an insane proposal when Republicans know it will cost so many jobs in the middle class and force us into a recession at the cost 1.4 million middle class jobs? They cannot. What sane person would vote for that? No sane person would vote for Obama’s so-called grand bargain and it’s not a deal of any acceptable kind. This whole Obama so-called deal is like trying to make a bargain with a terrorist who wants to kill you.

The Republicans have offered some concessions to higher taxes on the wealthy in recent discussions, but not the $80 billion and certainly not the $160 billion as the economy is weaker now then in early 2011 and any sizeable tax increase would not be good for the economy. There is no such thing as a grand bargain in what Obama is asking for; it’s more like a grand screwing to the American worker. Republicans are being asked to accept our grand economic destruction and the complete collapse of America’s economy into a deep recession or will it be a depression?

Taxes on the wealthy doesn’t include the automatic spending cuts from The Budget Control Act of 2011 said to be about $150 billion more that comes out of the economy and will have an additional negative effect on the economy. Obama is not trying to fix our fiscal issues and problems; Obama is trying to destroy the Republican Party and America along with it. I am all for spending cuts we need to shrink the spending of the federal government but not this way, not while taxing the crap out of everyone and forcing a depression like economy. These budget cuts should be done in increments’ in separate pieces of legislation over time slowing as the economy grows. I know this will not happen but that is the way it should happen.

The options the republicans have are unacceptable and the whole problem with the country is making deals or compromising with the democrats a party that wants to intentionally destroy the country. Obama and the democrats have found a way to blame the whole thing on the Republican Party but the truth is the whole thing was contrived by the democrats. The democrats want America to go off the fiscal Clift because they can blame any deal and all of them are bad on the Republican Party.  No matter whose fault it really is the liberal fringe lame stream news media will carry the lie and the people will believe the lie. America’s favorite pastime is blaming someone else for what they did to themselves by voting for democrats and Obama to get the free stuff.

I have told you about what the CBO has said about just taxing the wealthy and it has a really bad outcome and now let’s have a look at the math on the even bigger problem going completely off the $600 billion cliff. There is very big chance of the whole economy completely falling apart if the full force of taxmageddon if the existing law isn’t changed. The cost is a dramatic 4% of GDP just disappears into thin air. This will have the same economic effect as a gallon of gasoline going from $3.50 a gallon to $6.00 a gallon. You can probably relate to that and you know what that will do to your finances then multiply that time 140 million working Americans and the national fleet of 250 million cars. I did do the math based on our usage and the $600 billion taxmageddon it’s a very close estimate. This is an example for the effects and it will not necessarily affect the price of gas but the overall economic effect will be the same. (Catastrophic)

This taxmageddon automatically just happens in less than 4 weeks on January 1st 2013 if congress does nothing because this is already the law. Again stock markets will react before that date of January 1, 2013 not after. The optimism market players have that congress will stop taxmageddon comes from fantasies of the media and or wishful thinking.

The last 2 years has proven we have a senate that refuses to bring anything that passes the house to be allowed an up or down vote. At last count the republican controlled House of Representatives has passed 39 bills and Harry Reid hasn’t allowed any of them to go to the floor of the Senate for a vote. The house of representatives is functioning just fine passing 39 bills proves that. It is the Senate and or Harry Reid that is completely dysfunctional. The house has also passed 2 bills to fix the Clift or taxmageddon but dirty Harry wont allow a vote on either one. The truth is the democrats are screwing things up they are the dysfunctional party and they want to force America to go off the fiscal Clift. There purpose is to destroy the Republican Party and America with them. Will the democrat’s devious plan work?

If congress does nothing we get the full force of the fiscal Clift the media has been taking about but no one clearly explains exactly what that means to you and the whole country and the whole world will suffer great economic distress from our taxmageddon. I don’t think any of them are smart enough to see what it really means but I will attempt to explain more clearly here.

Here is what taxmageddon or the fiscal Clift means to you and to the whole economy and this number seems to get bigger by the week as more deductions are found that just go away and the higher total of the taxes mount up. The total amount of higher taxes collected from the wealthy and the middle class and the working poor (now 28 million that now pay no taxes at all and probably voted for Obama) is now $ 538 Billion in higher taxes as all tax rates go up 5% higher than they are now and around 20 tax deductions go away. This huge number of $ 538 Billion and based on the CBO estimated results of what $80 billion in higher taxes to only the wealthy was projected to do can be used as a guideline to calculate the economic impact of going off the Clift or taxmageddon.

The CBO has currently stated they cannot do an estimate on taxmageddon deal because they need the legislation to score the cost to the economy but that legislation doesn’t exist yet so we have to use the last CBO estimate as a basis on the budget act of 2011 debt deal that got us in this mess.

The higher tax of taxmageddon of $ 538 Billion on every one that works or has taxable income is 6.7 times the $80 Billion scored by the congressional budget office in 2011. Logically and mathematically the higher taxes would have the same multiple in its negative economic effects of 6.7 times the money that goes missing from the private sector economy into the black hole of government deficits of $1.1 trillion for 2012. So the math is 6.7 times the 700,000 lost jobs or 4,690,000 jobs lost. The negative growth rate of -.5% will be 6.7 times more or -3.35% This is to show the trend that when this much money being taken from the private sector in just simple straight math and it shows it will be catastrophic for the economy and jobs. This will be worse than the 2008 bank collapse because it doesn’t stop this time. No big stock market corrections or crashes are in the CBO estimates, there not allowed to do that.

I can tell you it will be a lot worse than any CBO estimate and there are a number of reasons. Here are just a few: first people will change their spending habits according to affordability after a stock market correction or a market crash. The working population or the tax payers that support the whole economy and socialist system will pull back spending as 50% of the working population are somehow invested in the stock market like in a 401k retirement program and that hurts business even more as everyone feels poorer and spends less. Adding to the devastation caused from the $538 Billion in higher taxes. The stock markets worldwide will adjust to America going into a recession along with all American stock markets as we are all tied together economically whether we like it or not that’s just the way it is. The CBO is not allowed to speculate on how markets will react they have a stricter set of guidelines and that’s why they are way off on most of their estimates long-term. There estimates are good for a few weeks to maybe 6 months, after that as time goes by their longer term estimate are useless.

No matter what the outcome the Republicans will be blamed for it. The election didn’t change anything and we will get 4 more years of congressional gridlock and 4 more years of an Obama’s dictatorship.

Some examples you can reference to see how people react and change their spending habits after any economic catastrophe is the 2008 bank collapse the 1987 stock market crash and the September 11, 2001 attack on the twin towers in New York. People just stopped spending and the economy went directly into a recession and my point is – things will get a lot worse than the -3.35% negative economic decline and will more likely be in the 6% negative GDP range just like after the 2008 bank collapse and the first quarter of 2009 was negative – 6% GDP and we have still not fully recovered from that. On top of that the Federal Reserve can no longer bail anyone out they are out of options but they can take over the banks and federalize them.

The overall dynamics of the economy has changed dramatically since 2008. This decline will be worse than any decline before because of the huge $16.4 trillion total deficits and a much larger portion of that are held within the banking system now in 2012 than in the 2008 bank collapse. A GDP growing at only 2% and Inflation said to be low at 2.2% if you believe that? The economy isn’t really growing at all, it’s the inflation that makes it seem like it is. We are in a much weaker position economically in 2012 than in 2008. 

This is a worldwide problem as all the major economies are doing the same thing. The total world-wide printing by governments has increased $21 trillion in just the last 6 years and most of that new debt is in the banking system.

The middle class with 401k Retirement plans or any money involved in the markets stocks or bonds will likely lose 40% to 60% of their money in those retirement accounts. Just like in 2008 after the banks froze up and this is just to start with, so the working people who support the economy will not be spending at the same rates they are now and all the false optimism will be forced away with a collapse coming in just 10 days when congress goes home for Christmas vacations while the economy through the stock markets just falls apart.

I have followed and been directly involved in every economic catastrophe since Jimmy Carter was president as a business owner and Obama and the democrats’ have set us up for the biggest collapse in world history. (The political economy)

In the last 4 years since the bank collapse of 2008 here is what has changed and will give us a multiple of 3 to 4 times worse than in the last bubble bursting and all created by the Federal Reserve poor economic and monetary policies. The banks have been buying trillions in U.S. treasury debt adding to what they already hold and adding trillions to the problem because the Federal Reserve has been making up phony money with these dollar amounts in trillions and creating a new much larger bubble than we had in 2008. The Federal Reserve has been buying old debt with the Q.E 1-2-3, and the so-called twists and the banks have been investing some of the money into the stock markets and commodities as well and repurchasing new federal debt with the very same money the Federal Reserve has been putting into the banks. (A Ponzi scheme; if you or me did this we would go to jail for a very long time like Burney Madoff)

This pumping of artificial money into markets has artificially inflated stock prices by pumping trillions of dollars into the banks creating money out of thin air with nothing but faith to back it up. Markets will collapse quickly as that faith will evaporate in a steep decline or even worse a panic sell off like in the 1987 crash and like all other crashes will take everyone by surprise. The banks are holding this huge multi trillion-dollar bag of dogey doo in U.S. government debt and banks will be blamed once again for what the politicians did or didn’t do. This is a 1934 cartoon from the New York Times. This has happened before.


The banks and the biggest investment firms which are banks are the biggest players in the artificially propped up stock markets and the bond markets. This is a worldwide condition that every government and economy in the world has been doing the same thing for the last 4 years. This bubble only needs a trigger to set it off and I believe the trigger is taxmageddon that comes in 10 days. This starts on December 14, 2012. The markets will decline and this decline will continue till Friday the 21st of December. The reason it stops there is because the 25th is Christmas day holiday and markets will be closed Saturday December 22nd to Wednesday the 26th of December. After that all the damage will be done and whatever congress and Obama do after that will make no difference, it’s too late to fix anything once the markets correct or collapse.

The economic losses will be similar to a repeat of the 2008 bank collapse only multiplied times 3 to 4 of what happen in 2008. There will be no rescue from the Federal Reserve and no bailouts of the banks as the federal government with the Dodd, Frank banking act allows the government to just take over the whole banking system there are no limits to what the government can do now under Dodd, Frank and that’s what will happen as that’s exactly what the bill is meant to do. Nationalize the banking system and here we go to the government controlling everything. (Communism) So what’s next? They’re going to steal all your money no matter where it is.

How much do you trust the government having control of all your savings and what do you think they will do with it once they have legally taken control of the banks and nationalizing the whole banking system and all the money? What did they do with the social security money? They spent it all, need I say more? If or when this happens think about what you will do if you have savings in the bank and that’s what everyone else will do. The results will be Runs on the banks just like in the great depression and finally just closing the banks as they run out of paper and digits in the computers. Banks only have about 10% of their deposits in cash or liquid assets the rest is loaned out to someone and even loaned to other banks that may go bankrupt and close their doors these loses quickly dominos through the entire banking system no matter who owns them.

The Federal Reserve has no bullets left and the bazooka doesn’t exist anymore.

In 2008 prior to the collapse of the banks the federal deficit total was about $9.6 trillion and its now $16.4 trillion. The interest rate set by the Federal Reserve was 5% in 2008 now its .5 or ½% it can’t get any lower than zero and lowering it 4.5% has done little good for the economy and reducing it, another ½% won’t make any difference after a market crash. We also will have reached the current debt ceiling of $16.4 trillion by the last week of December 2012 or first week of January 2013. Little has been said about this debt ceiling being reached but their parts of a grand deal Obama wants that’s no deal at all and will not come.

If I wanted to destroy America I would have done everything the democrats did since they took control of congress in January 2007 and I would refuse to change anything just as democrats and Obama have done and continue to do. If I wanted to destroy America I wouldn’t change a thing.

We are currently barrowing nearly $100 billion a month for deficit spending and just printing and digitizing most of that up in computers the paper doesn’t even exist, it’s mostly cyber money on a hard drive in computers. If markets do come crashing down in 2 weeks with the debt ceiling increase tied to a tax increase bill that will not come and congress is out on vacation it all comes to a head at the same time. Once things do fall apart it’s too late to fix the damage already done.

This is the perfect storm and America’s judgment day has arrived. If congress does pass something and it’s not economically sound like raising taxes on the wealthiest 2% the exact same thing will happen and markets will react as if congress did nothing at all. We will all pay a price for the people who backed Obama and voted for him. The utopia Democrats all dreamed of and like they have dreamed of in socialist Europe for the last 150 years that utopia never did materialize and will never come for America either. What is coming will be more like the opening of the gates of hell.

The Federal Reserve is a bank. It is not a branch of government and isn’t controlled by congress directly. When this bubble bursts there’s not enough money in the world to fix this crash. The Federal Reserve holds around $4 trillion in its own issued debt and when the crap hits the fan this time the Federal reserve bank will be just as broken as the banking system they artificially propped up for the last 4 years and its all self-inflicted from poor monetary policy’s mostly since 2007. They think they have it under control but if they did we wouldn’t be in this catastrophic position.

I am a realist and do not hope for any better outcome for which there is no evidence of any possible better outcome. Hope is like wishing for something it only works in fairy tales but not so much in the real world. I have watched and participated in the political economy for over 30 years and I know what the politicians will do before they know what they’re going to do.

There are no grand deals to be made and any choices they do make will be bad ones for the economy. The policies of the federal government and the democratic controlled congress have put us in a box we cannot get out of. All of the possible outcomes stink. The poorly contrived political economic policies of the past our going to haunt us and our children through eternity and the bill is coming due now,  in the next few weeks not in 5-10 or 20 years.

We are about to witness the destruction of America through its economy from within our own elected government. This is all absolutely intentional it is not by accident that this is going to happen. Liberal progressive Democrats are just the tool or the useful Idiots for the destruction of America. There is someone else behind all this but this article is not about that.

The visible and undeniable end of America starts in 10 days. Obama is not trying to fix our fiscal Issues and Problems; His s trying to destroy the Republicans and to do that Obama’s going to destroy the economy and the country with it.

Congress goes from one screw up to the next screw up and the reason for this is the compromise of capitalism in trade offs for a larger more expensive government and more socialism and wealth redistribution. This will only end when we collapse under the weight of too much socialism, the government will go away with it and that’s weeks away not years. The deal Obama and the democrat controlled senate offers are going to collapse the economy. Keeping taxes the same for everyone will just put off the date as it will come up again.

The bottom line on taxmageddon or the so-called cliff is no matter what happens Americans gets screwed.

 If we get exactly all that Obama’s asking for we go off the cliff and into a deep recession. The congressional budget office has stated this and I agree.

 If congress does nothing at all we go of the bigger cliff. So no matter what: deal or no deal we go off the cliff. That’s the deal, we go off the cliff.

 The only alternative is keeping all tax rates at their current levels for everyone and Obama said that’s not acceptable. So we go off the cliff.

 The republicans are already being blamed for this but they haven’t been in control of congress since 2006 and they still are not in control but the lying media says republicans are to blame.

  Lou Dobbs agrees with me 


Paul Ryan: That leads us to conclude Obama’s trying to get us to our fiscal cliff,” Ryan said. “He doesn’t want to come to the middle.”



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The causes of economic recession are only slightly different one recession from the other. I have observed and done business in all the recessions from 1978 to 2009. I have read what other economists have written, that no one knows what causes recessions. I know why that is true for them. They have never fiscally experienced what the effects are to realize the cause in real-time. They only read what other academics say or write about causes of economic recession. Since the academics don’t know for the same reasons it’s exactly like the blind leading the blind.

Causes of economic recession in the past have started with bad economic policies from the federal government and congress. Overspending by congress has always forced interest rates up to finance that debt. This forces the Federal Reserve to raise interest rates to attract enough money to finance the deficit. This usually happens over a long enough period of time that it goes almost unnoticed by the general public. This short memory or just a lack of interest by the public gives cover to the politicians who constantly overspend. Because of this lack of interest and until millions of people lose their job the politicians or the liberal fringe news media can tell the public whatever they wish and the public doesn’t know any different.

All the recessions I have experienced first started with high federal government deficit spending, which will lead to higher interest rates. Higher interest rates slow the economy down as borrowing money becomes more expensive for home buyers and businesses big and small. I have seen this in every recession from 1978 and including the one we are still in now in 2010. There are many smaller factors that could be pointed to, but they are small compared to the higher interest rates combined with high federal deficits, taking most of the available money out of the world’s economic system to finance the federal debt.

The Causes of economic recession that started in December of 2007 and is still ongoing in February of 2010 was caused for the aforesaid reasons. We had an interest rate set so low that a home mortgage was below 4%. Then the Federal Reserve raised their rate from 1% to 5%. This put home mortgages at 7% to almost 8% this slowed the housing market dramatically in 2007 -2008 and later resulted in the 2008 bank collapse. These were and are the main causes of economic recession.

The details and the real causes of economic recession that we are now in the middle of right now, goes all the way back to Jimmy Carters presidency from 1977 to 1981. He signed a bill called the community reinvestment act. This new legislation was supposed to help poor people get mortgage loans. Then Bill Clinton didn’t think the community reinvestment act legislation went far enough, so in his last year in office 1999. Bill Clinton strengthened the law which allowed a lot more people who could not afford a home mortgage to get one. The law forced banks to give loans to people with bad credit and no proof of income, other than their own written statement that they had enough income to pay the mortgage loan. Over the period from 2001 to 2006, millions of what is called subprime mortgages was given to unqualified borrowers. Almost every one of these subprime loans went into for closer.

These high risk subprime loans were immediately sold off to other bigger banks and investment firms like bonds and were referred to as credit default swaps. This was unregulated area of the banking system. No one was keeping track of the total amount of the credit default swaps. When everything did fall apart there were $60 trillion of these bad loans. Interest rates went back up and the housing market reverses course and prices started to fall in value, so did you credit default swaps which are all subprime loans and since they traded just like bonds eventually no one trusted them and eventually there was no market for them. This led to these credit default swaps being worthless. As these bonds dropped in value the bankers no longer would buy them. This lead to the frozen credit markets within the banking system. This made $60 trillion in credit fault swaps became worthless and it was exactly like $60 trillion just disappeared or vanished into thin air. That’s where it all came from in the first place, out of thin air and that’s where it went back to.

These credit default swaps were sold from 30 to as many as 60 times over and over. What the banking system did was turn $3 trillion in home mortgage loans, into $60 trillion in credit default swaps. This problem was known by the federal government back in 2004. Many politicians knew that something had to be done to correct this problem. But nothing was ever done, even though they were warned many times by auditors and other politicians and Pres. George Bush told Congress 17 times that legislation needed to be passed to correct this problem. In 2006 John McCain wrote new banking rule legislation specifically for the problems with Freddie and Fannie. That never made it to the floor of the house to be voted on because the democrats controlled the house and the senate by 2006. Nothing was ever done and here we are with a broken banking system and George Bush gets the blame from liberal fringe news media. While the two Democratic politicians who were in charge of the banking committees Chris Dodd and Barney Frank go without any investigation. They are the ones that did nothing and were warned by auditors that there was major fraud with Freddie and Fannie May. These two banks were the originator of most of these subprime mortgages. This was one of the many causes of economic recession that we are in now.

There is a number on the US debt clock that was put there to keep track of the total Federal Reserve money that has been paid out to bail out the banks. This number is now $7 trillion as of February 1, 2010. This is just more money being printed up or made up out of thin air. That is more than half the federal deficit accumulated over 234 years in the United States being in existence. In just 16 months you can’t just print or make up $7 trillion in phony paper or cyber money without causing extreme inflation in the outgoing years. This extreme inflation will come within the next 24 months, not in 10 years like most of the news media is talking about.

The current causes of economic recession are not the normal ones that historically start or create recessions. This is all new territory. We have no precedent to go by. The Great Depression 1929 to 1939 was nothing like this. There were no credit default swaps 80 years ago. We had no socialist system in place like we do have now that pays out $1.8 trillion a year in wealth redistribution. The banking system failed in 1933 because the people physically ran on the banks to get all their money out of the banks at the same time. This however is similar to what happened to the banks in 2008 except the banks are running on the banks more than the people were. The banks lost faith in each other and did not trust one another anymore. This led to the whole banking system freezing up and put us right where we are now, with a broken financial system. This time it was the banks standing in line at the banks not the people.

The causes of economic recession in this case can be found in political mistakes made by Congress. First the community reinvestment act is exactly how we got 3 million bad mortgage loans in a period of just three years, 2006 to 2008. Then on top of that, congress knew about the specific problems in the banking system. Congress did nothing, even when they were warned many times by independent auditors, other congressmen and the president. As of February 2010 nothing has been done yet to stop this type of activity. So who’s in the banks pockets getting payoffs not to regulate?

The causes of economic recession in this case were very poorly written legislation, the community reinvestment act that turned the banking system into an arm of the department of social services or the department of welfare. There are people who say that capitalism has failed. The facts are Congress turning the banks into a social system or wing of the welfare department, is what made the bank’s collapse, not capitalism. Under old bank rules before the community reinvestment act these bad loans would’ve never been made and it would have been considered a crime to make loans like the banks did make under the new community reinvestment act. Prior to community reinvestment act it was against the law to make a loan the way the subprime mortgages were made. If not for that this would’ve never happened. This once again proves that socialism doesn’t work. It never has and never will, not one time.

It also proves if you put too much socialism in any capitalist system capitalist economic system will collapse. This happens due to the overburden of socialism or too much money being taken out of the private sector and redistributed to other sectors of the economy that isn’t producing anything. There is always a tipping point and we have reached it. Socialism has never worked in any shape or form. Here’s some really big proofs were socialism has been tried for many years and failed miserably right from the start. First look at Russia they ran a communist economic system for 70 years and their people lived in severe poverty. Then they changed into a capitalist system their standard of living increased by 500%. Then we have to take a look at communist China they tried communism forever 30 years and for 30 years their people lived in severe poverty the very same as Russia. Once they changed over to capitalism they too experience the same 500% increases in their standard of living. So it’s a choice do you want to live in severe poverty under socialism. This is the exact same economic system as communism. You will live a high standard of living that we do have here in the United States but only if you chose to participate in the capitalist system.

Our political divisions are also one of the causes of economic recession. This struggle with our politics between the Socialist and the conservatives is a big part of the problem here in the United States. We have one party that wants wealth redistribution and socialism. That would be the Democrats. Then we have another party that is normally more for small government low taxes and favorable to business to create jobs and expand the economy. Normally that’s the Republicans, but in the prior eight years with George Bush and for 6 of those eight years Republicans had a majority in congress, they did something that was not normal for Republicans. They spent like drunken sailors and created a new social program. The old folks in this country survived for more than 200 years without the young working people who are trying to raise new families buying their medicine for them. This is not why Republicans were elected. That’s one of many reasons why they lost the House and the Senate to the Democrats in the November 2006 elections. If the American people thought that they were going to punish the Republicans by not re-electing them. It looks like that backfired on the American people.

The next big problem that we have to face is the bankrupt social security system. The security system is said to become bankrupt in seven years or by the year 2017. This is an old figure from before the banks collapsed and they are still talking the same old story from prior to 2008 bank catastrophe. Now as of 2010 has anyone noticed that tax revenues, federal and social security taxes collected have created a deficit of $1.3 trillion? Social security is long past being broken right along with the rest of the goverment. They don’t want to make that known to the public because it will scare the old folks depending on social security. We don’t have 7 years to fix social security any more.

The congressional budget Office has given its most recent deficit projection for 2010 and that’s $ 1.3 Trillion. There’s a really big problem with their calculations. First they have calculated in the taxes from cap-and-trade. This is not law yet. Then they also calculated in the 14 new taxes on the American people with the healthcare legislation. This is not law yet. Then they forgot to include the newest second stimulus package renamed a jobs bill at a cost 174 Billion added to the deficit. The jobs bill has been passed by the house of representative. It only needs to be passed by the senate and they will add more to it, when they get their hands on it. This jobs bill will definitely become law and they excluded that from their budget calculations and added in projected taxes from cap-and-trade and the health care bill that is not law yet. This is against the rules of the congressional budget office to surmise that a law will be passed, when it has not. Here is why they broke their own rule. If they did the budget under the rules, the deficit would have been 1.6 trillion and when the jobs bill is added, it will be $1.784 trillion. That number is $400 Billion more than last year and that doesn’t include off budget deficit spending. If you add the more than $100 Billion in off budget deficit spending that brings the total deficit to 1.9 Trillion for 2010. Reporting that could cause another panic. These are only some of the Causes of economic recession. If this continues we will enter into a depression in 2011

Americans are in very big trouble; these are just some of the causes of economic recession. We have a huge mess that has to be cleaned up. But who is going to do it? We have the wrong people in charge of all three branches of our government. It is a historical fact that democrats look at economics through the eyes of a socialist. That is what they are by definition and by their actions. We have people in power that only understand a failed system of socialist economics. How can they fix what is broken, in what really is a capitalist economy. They can’t or they won’t and the results will be the same in 2010 that we had in 2009. It looks to me, as if it’s intentional. We also have 3 more years of these progressive, socialist, Democrats being in control. The 2010 elections won’t make any real difference with president Obama in control of the veto powers. Here is a summary of the Causes of economic recession.

Causes of economic recession step 1

Government spends too much in deficit spending. In 2008 the budget deficit under the new democratic control congress gave us the all time record high of $482 billion and in 2009 the top line spending was increased $992 billion over the 2007 budget (which was $2.7 trillion the last budget done by the republicans with a $151 Billion deficit)  that budget was done by April 15 2008 and that was $3.7 trillion. This was 5 months before the banks collapsed in september of 2008 and they blame it on the republican party, but the democrats got control of congress in January of 2007 the budget originates in the house of representatives, the president at that time George Bush can not spend 1 dime.

Causes of economic recession step 2

Federal Reserve will raise interest to attract Investment money to finance the deficits spending. This is exactly when the Federal Reserve did in fact, they started to raise interest rates as the congress spent more money in deficits the interest rates went up and so did home mortgage interest rates and this lead to a bad real estate market and collapse the prices and lead to the collapse of the banking system.

Causes of economic recession step 3

Housing and other industries slow from the higher Interest rate and due to the higher cost in monthly payments affordability is greatly reduced this force prices to go down and increases and enforces the possibility of even more banks going broke.

Causes of economic recession step 4

Banks don’t loan as much when interest rates are high and the overall economy shrinks which was the case prior and up to the collapse in September of 2008 and after the bank collapse then they lowered the interest rate, whoops to late. The economy is all credit based and it has always been this way. So untill that gets back to what it was there will be little or no improvement in the economy. So whats the problem now since interest rates are now so low. One is the banks aren’t making loans and then there’s the part were people want or need to barrow and make purchases personally or on the business side the demand for loans is way down. The public is also confused and people wont make big monetary decisions when those circumstances exist.

Dont try to tell your college professor any of this stuff because it’s not in his text-book of how the economic system is supposed to work and there’s a 90% chance he or she is a liberal or a progressive. They would give you a failing grade for pointing out the policies of the democrats are what collapsed the banks and the economy. The college professor will tell you politics has nothing to do with the economy, but nothing could be further from the truth.

2012 What's really going to happen in 2012

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In the next 18 months there will be many very obvious signs that everyone will be able to see and follow our currencies demise. The evidence will be found in the two most noticeable commodities we purchase every week and that’s the price of Gasoline and food. While the governments’ bureau of labor and statistics is telling us we have no inflation reported to be 1.1% the cost of Gasoline and food will be skyrocketing upward.

 In the last report out December 15, 2010 the headline number on inflation came out at .8% or 8/10 of one percent. These numbers are calculated on a monthly bases and it seems no one ever looks at what’s in the reports. Here is the increased cost of the two most important items in America. The CPI report shows the last 12 month gasoline has increased 9.5%. Then if we look at food over the 12 month period we get 1.4% increase in price. The total of all items in all categories clams’ inflation is running at 1.1% per year. I think we all know that something is not right with these numbers. The cost of gasoline in just the last 3 months is up 20% where I live and I have seen that in other areas of the country is a lot higher.

 But the November Producer Price Index (PPI) for finished goods surged 0.8 percent is doubles most economists’ estimates. Moreover, the inflation is not stemming just from rising energy prices. Overall, the cost of food rose 1 full percentage point in November, which is equivalent to 12 percent annual inflation rate. Egg prices led the way higher, jumping 23 percent in November, while the price of fruit jumped an astounding 14 percent. Think these are one-time, freak price jumps? Think again, because since the first of this month… the price of corn is up more than 3 percent … coffee is up more than 8 percent … sugar is up 8.49 percent … oats are up nearly 6 percent … while cotton prices are up more than 16 percent — all of this in just 15 days!

 The consumer price index hasn’t started jumping yet. But just like night follows day, it will as companies pass on higher wholesale costs. The Fed SAID it would continue its QE2 policy, saying it would “promote a stronger pace of economic recovery” … But that reckless policy is driving interest rates skyward! In fact, two-year Treasury yields have doubled in 29 trading days. Five-year yields have surged 102 basis points, or 1.02 percentage points, while 10-year yields just hit a seven-month high. Thirty-year municipal bond yields soared to a 16-month high, as thirty-year mortgage rates jumped to the highest since the tail end of the spring home buying season.

 So not only is the Fed failing to promote recovery by driving borrowing costs down It’s actually hindering the recovery by driving costs up. Yet in the Fed’s fantasy world, everything is peachy keen! With interest rates rising and the Fed continuing to print money and buy bonds, despite a zero percent success rate so far, here comes hyperinflation!

 The price of gasoline has gone from under $2.50 a gallon to $3.00 that is a 20% increase in just 3 months. I do my own shopping and I believe food has gone up more than 1.4% in the last year. Any way my point is what we really need to buy every week is climbing at a much greater rate than the reports show. This is nothing new as I have notice this to be the case all my years of running a business. But in the following months because of the intentional devaluation of the dollar, the cost of petroleum products and food will increase as the dollar devalues against all other currencies. This is what happens when a country intentionally devalues its currency. Ben Bernanke has said we need to create some inflation because it’s to low at 1.1%.

 So here is what’s taking place right now and it’s the truth. I will explain how this will get out of control real fast. We will start with what the news media is referring to as QE-2 which translated means quantitative easing. The amount of money they are going to print or digitize is $600 Billion. Bernanke claims the purpose is to create liquidity in the banking system. The true reason is to finance the federal deficit of $110 billion a month. There are just moving digits from one Colum of a computer program and moving the digits to another Colum, there not even printing the money anymore. This has to be added to the federal deficit spending for all of 2008 and up to the end of 2010 and that dollar amount is around $3.9 trillion. Now we are adding $600 Billion for a total of $4.5 trillion. The money is getting into the streets with monthly government spending on entitlement programs.

 This QE-2 money will run out buy April of 2011, so what happens next? QE-3 will be another $600 billion and Ben Bernanke said this would be the case if needed and it will be needed. There’s no end in sight with the federal budget deficits of 1.55 trillion for 2011. That’s $129 billion on average added each month to finance the gap between government revenue and government spending. The QE-3 will run out by September 2011. So what comes next? QE-4, 5 and 6 there is no end in sight.

 Why does this matter and why should you care? As the Federal Reserve keeps propping up federal spending deficits over the short period of the next 18 months we will destroy what confidence is left in our paper currency. This means the prices of crude oil from were ever we do import it from will continue to rise with the continued intentional devaluation of the dollar. We import 72% of all the crude oil we use and we are not in control of the price. American oil companies only control 3% of the world oil supplies. Well why does this matter? For every dollar a gallon the price goes up it takes $27 billion each month out of Americans pockets they would otherwise spend on something else. We are not buying additional product we are just paying a lot more for it. $4.00 a gallon gasoline by July of 2008 is part of what caused the last recession or the one we are still in that lead to a worldwide bank collapse. That recession started in December of 2007. If you find a chart of the price of gasoline and a chart for unemployment as the cost of gas went up so did unemployment. They move in lockstep for the following reasons.

 On a yearly base $1 in additional cost to a gallon of gas is about $300 billion that goes missing for other purchases. I believe the threshold for decline in other economic activity due to the price of gas is $2.50 a gallon and once we get above that we start to lose jobs because all that money goes missing. There is also the secondary affect the higher price of crude pushes up the cost of food and all other energy related categories. There is also another problem and its ethanol that is added to the gasoline. This comes from corn and corn is also the main food use for cattle chickens and all farm animals. As we burn ethanol up we are forcing the cost up for farmers to feed their animals and this has a direct affect on the cost of all our food supply on top of the higher price from the higher cost of crude oil.

 In 2011 we can look for much higher Gasoline prices and much higher food prices. It will look like this by the end of 2011, gasoline will double to $5.00 a gallon and food will be up about 30%. The Bureau of labor and statistics will be telling us we have just 5% inflation. This is exactly what they were telling us in July of 2008 when gasoline was $4.00 a gallon in most parts of the country and in Crazy left coast California gasoline was over $5.00 a gallon. Most of the price increase in 2008 was from January to July or in just 7 months. That was all from speculation in the commodities market, not from the intentional devaluation of the dollar.

 The inflation of the currency has a quantitative number of jobs losses that will come from the money gone missing from the higher gas prices. Based on my numbers and numbers from the department of labor, I have calculated that for every $1.00 a gallon or $27 billion each month the job cost is 183,828 jobs that disappear with the money. On yearly bases that is 2,205,936 lost jobs and this doesn’t count all the income lost from the jobs incomes that no longer exist that will forces even more job losses. This is already happening in October and November of 2010 the last two unemployment reports have shown in the body of the report not the headline number, we have lost 503,000 jobs from the total number of jobs in the economic system. This coincides with the rising price of crude oil as it has crept up for the last three months. The headline numbers were positive, but just like all government reports they have diluted them in such a way the true state of the economy doesn’t show up until 3 to 6 months later, if it shows up at all. The interior of the reports show a decline in the number of people with jobs was negative 330,000 for October and 173,000 for November. So get ready for a wild ride as prices go back to $4.00 and then to $5.00 by the end of 2011

 The higher cost of food has the same results as the higher price of gas. Food has to be replenished on weekly bases we eat it and it disappears and if it cost more for the same amount of product the money just disappears. The money doesn’t exist anymore to purchase other products and the economy slows even more and even more jobs are lost. Currently the unemployment rate is at 9.8 % for November 2010. I expect at the very least we will lose at least another 6 million jobs by the end of 2011 if the above scenario plays out. This will put the unemployment rate at around 13% to 14% by early 2012, which will be catastrophic. The value of the dollar will have its ups and downs because of Europe’s economic problems but the long term direction over the next 18 months will be the same, a severe devaluation of the dollar. So what happens next?

 If you want to know the whole story on how we got into this position and were all this will take us and our country you have to buy my book called 2012: what’s really going to happen in 2012. There are no prophecies in the book, it’s not about wizards or any hocus pocus codes. It’s about sound economic practices that we have ignored within our own governments policies and how the very government we expect to protect the country has planned our demise and why. I show the proof based on simple math, a little common sense and the current history of the last 10 years to get us right where we are. 


2012 What's really going to happen in 2012

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I know what all this leads to, do you?  Here is a list of what the current congress and president Obama has done or is planning to do to the American people.

1. Healthcare is now law it has been passed now we have to deal with it at an estimated cost of $242 billion in additional insurance premiums and taxes.

2. Next, cap-and-trade also known as the clean energy act. I estimate this will increase the cost of gasoline and electricity by $264 Billion

3. Then will get amnesty for illegal aliens. This will give legal status to 12 to 20 million illegal aliens and allow their extended families into the country. The extended family part of the legislation allows 48 million more foreign workers into the country. I estimate the current lost wages due to jobs being taken by the illegal aliens already here at over $ 200 billion

4. 16,000 New IRS agents to enforce the new tax laws from the healthcare bill to get even more money out of working taxpaying Americans who refuse to get the coverage or pay the fine.

5. Value added tax is coming this is a federal sales tax that will be paid by the stores that we shop at before we buy a product the tax will be built into the price.

6. The end of the two President Bush tax cuts at the end of 2010. On January 1 of 2011 federal taxes will go back to their much higher levels prior to 2001.

This is an assault on the American working class and somehow the liberal progressive fringe news media will spin all the above into it’s not a tax increase.
A war has been declared on the American people by our very own government all in the name of fairness and wealth redistribution.  As each one of the mention new pieces of legislation passes and becomes law it will force up the cost of everything we buy, Raise taxes to the all working citizens and at the same time allows millions of illegal aliens to stay in the country legally to take existing jobs at a much lower wage and allows many millions more into the country to take jobs that do still exist. They are trying to do this while we are still in the deepest and longest recession since the great depression. It defies all logic and it’s irresponsible. This looks like an assault to me, what do you think?

2012 What's really going to happen in 2012

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Statistically the economy grew at an annual rate of 5.9% in the 4th quarter of 2009. Technically this means by textbook definition the recession is over. The continuing job loses prove that to be false. Inflation for the last 2 months of 2009 was 1.8% for November and 2.7% for December. That’s a total of 4.5% inflation for that 2 month period. That’s almost as much inflation as we get in 1 year. That’s where I believe a good part of were that big GDP of 5.9% number came from. It was also the Christmas shopping season.

 Will it be a slow recovery?

 The economy will show a positive growth rate but it will be 2 to 3% that is a very slow growth rate. The talking heads will call it a jobless recovery as the economy will still sheds jobs all the way up to the November 2010 elections. Since they don’t inflation adjust the gross domestic product reports for inflation, that’s why we have so-called jobless recovers. It cost more to buy the same amount of products. The economy isn’t really growing just the dollar amounts we are spending. The dollar amounts we spend go up but it’s not because demand for product goes up. We are just paying more for the same products. If inflation is 3% and the GDP is 3% you have a 0% real growth rate when inflation adjusted. GDP is reported on yearly basis. Inflation is reported on a monthly base.

 How long will it take for our economy to recover?

 It will recover when the real estate market recovers. We still have about 5 Million houses that are expected to go into default over the next 2 years. That’s not expected to end until early 2012. Do you think the banking system will survive that?


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Most countries have always disliked us. The foreign news media is very hard on the United States, here are the facts. They are in fact socialist and capitalism threatens their way of life. They print and say and teach it in their schools and colleges all kinds of lies about America. They say all kinds of nasty hate full lies about America. Does that sound familiar? They claim we through people into the streets when they go to a hospital for healthcare, that’s not true. They say we have no unemployment insurance that’s not true. Basically we have every social program the socialists do but in Europe they tell it different. It all boils down to our capitalist economic system use to work better than there socialist system.

In Europe their economies in the best of times grow at 1% while here in the United States we grow at an average of 3.5% and in good time 5 to 6%. Why they don’t like America is specifically because we threaten their socialist way of life. The second biggest reason is our freedoms or rights of the people, for which most other countries have none. This country is unique; there is no other country that has a bill of rights like ours. This is also why most of the other countries don’t like us. This is a struggle that started 150 years ago with Marxism or socialism. Our way of life also threatens kings and dictatorships. It’s all really propaganda and the telling of lies. They will all miss us when were gone.

2012 What's really going to happen in 2012

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There seems to be so much anger on the internet blogs about Fox news from liberals, can’t they just not watch fox news and choose different news programs if they don’t like it? Why are the liberals and progressives so over the top emotionally about one news program out of hundreds of other choices? 

I have been following the liberal progressive news media for 44 years or since 1966. They have been lying to the public for a least that long. Until Fox news the liberal’s progressive news media had no competition as they have only been around about 12 years. They can’t seem to stand it that someone has an opposing opinion. They also don’t like it that the real truths of what liberals or progressives want to do to the country is being exposed. The American people will not stand for becoming a socialist European style country. I did not learn what I know from watching glen beck or listening to rush Limbaugh I wrote a book 20 years ago that predicted what is happening right now. The liberal, progressive news media spends most of their time trying to convince the public that Fox news is telling the people lies. Of course the opposite is true and the numbers prove it to be so. I watch all of them.

 I would say by the ratings of Fox news the liberals are not doing a very good job of convincing the public. Six times more people watch fox news then any of the other liberal progressive cable stations and ten times more than MSNBC. The more the liberal or progressives talk the more people watch Fox News. Americans are not stupid, just a little slow to catch on and that’s because there is so much disinformation. That’s the way the numbers are working out. I can sit in front of MSNBC for ten minutes and record pages of disinformation given to the public. I can’t write as fast as they can lie. I have lived history and I already know the truth and I don’t need them to tell me what the truth is.

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