There are anomalies in the economy t
hroughout history, both low (recession and more drastic; depression) and high (bubbles, inflation).
Recession usually happen when economic activity slows and no demand for goods and services. A recession is when your neighbor loses his job because of deteriorating sales of product or services. A depression is a more severe collapse of the economic system, resulting in widespread unemployment and low monetary supply. It is when your neighbors lose their jobs and you finally get the notice you no longer have a job!
Economic high points (debt bubbles) grow exponentially and exuberance for the product or service stimulates sales and higher stock prices (if it is a publicly traded company). Think of borrowing on margin for stock. The problem is when bubbles get so big, and when they finally do pop, as they all eventually do (think the dot.com tech stock era) and the perceived value of the product quickly diminishes and the stock price drops like a stone. Then you’re upside down and the bill comes due and you don’t have the cash to cover your bet, resulting at worst; bankruptcy.
For an entire generation, most people in the world’s major wealthy economies consumed far more than they produced, resulting in a debt bubble of mind-boggling, epic proportions. Unlimited credit is hitting the wall of reality. Wages and productivity haven’t grown and extending more credit by manipulating currencies and printing money (resulting in debt) are not options anymore.
The first sign of a collapse will be when credit is no longer available. Your card won’t work in the shopping line anymore. You know the folks you’ve seen in line when they go through card after card, because most are maxed out and no more credit is available. That may be you in the not too distant future.
Well, I pay my credit card every month, you exclaim! Who carries cash any more? Just a few of us old fogeys who like to pay with cash so the credit card stays in the wallet, used only for emergencies. I know some people with large bank savings and checking accounts but will never pay cash – they always use a card for everything – from a candy bar to automobiles. They also say they have to keep their credit rating up. If you have cash, why would anyone need a credit rating?
Did you know that if you are debt free and have $10 in your wallet, you are worth more than 25% of all Americans? Of all businesses that started in 2008, 180,000 succeeded. By 2015, of all the businesses that started, 70,000 failed. The end of the Obama era and more businesses are failing than succeeding, not much of a presidential legacy.
Japan just announced it is at an economic crossroad – the debt spiral is soaring and not enough investors in Japanese debt without any interest for doing so. Retirees have been buying the debt, but that is about to end – the debt is growing faster than investors are investing. Is this the future of the United States?
A survey by research agency TNS found “millennials” – defined here as those between the ages of 18 and 35 – have average student-loan debt of more than $41,000.
But that’s not all…
Most young students already regretted taking out these loans, and one in three said they wished they hadn’t gone to college at all.
Nearly two out of every three students had “no idea” when they would be able to pay back their debt… 8% said they have no plan to pay their debts back… and another 8% percent said they planned to delay payment by going back to school (and taking on even more debt!).
Clearly, this trend is unsustainable. Huge numbers of young people are borrowing huge sums of money they have no hope (or intention) of ever paying back. Now the federal government is the bank for these loans, the President took that away from banks and gave the responsibility to the federal government providing the only source for loans for college, so the banks aren’t on the hook for that money – we are. Yes, you heard right, the taxpayers have not only bailed out auto companies, banks, investment firms, but now they are responsible for college debt.
As we’ve discussed, student loans can’t easily be canceled through bankruptcy, like other forms of debt. But there are signs that could change…
Yesterday, the Obama administration announced it was forgiving the student loans of hundreds of thousands of borrowers. According to reports, the Department of Education will send forgiveness letters to 387,000 people identified as “eligible for a total and permanent disability discharge.” Whatever that means, “disabled” as in physical or mental disability or disabled as in not able to find a job to pay back the loan?
The government is also looking at lowering the amount of cash that is available in the money supply by not printing larger bills, such as the $100 bill. Why is this? Because more money is held overseas than in the United States. Payment with drug deal money is in the form of stacks of $100 bills. Many of the Miami real estate market deals are paid in cash – stacks and stacks of cash. Can you say universal credit card?
The government wants to get rid of cash so they can curtail the black market where cash is king, they will be able to monitor your buying habits and track your movements by using the “universal credit card” issued by the government. Is this the new “mark of the beast” foretold in scripture? You decide, I’m just bringing up the question.
Just remember, the government that can give you everything you need is also the government that can take everything away. If you think the government is the answer, like most Democrat thinking, think again. Uncle Sam’s plantation is visible for anyone wanting to see, if you like what you see – the desperation, the poor living conditions compared to the middle-class, educational opportunities diminished, single motherhood, poor health and diet choices, everything most people don’t want their lives to evolve into.
The Remocrats (Republicans in name only and side with the liberal Democrats more often than not) don’t fight for freedom, liberty, personal responsibility, or honor any more. They go along to get along. The only ones fighting for your rights as citizens for self-determination are the renegade Republicans – known as Tea Party, liberty and freedom loving citizens. This includes all races, creeds and colors, religion, and party affiliation.
The Tea Party was not started in some smoke-filled backroom by political cronies – it was started on the Chicago Commodities Exchange with Rick Santelli on an economic rant about the economy and taxpayers bailing out their neighbors because they couldn’t afford the house they had. At the end of the rant, he exclaimed “President Obama, are you listening?”
Ask yourself this – how many Representative and Senators (and President and Vice President) go to Washington D.C. as a middle-class citizen and come out after being in office multi-millionaires on $175,000 – $250,000 per year? Living in D.C. is excessively expensive – most would be stretched to make it on what they make.
Lying, deceit, insider trading, back-slapping contributions that somehow get to overseas accounts, graft, corruption and any other way they can make easy cash. Can I prove it? No. The better question is can they prove their money came from honest effort and legal ways? I doubt it.
The taxpayers are mad as hell and won’t take it any more!
The rotting of America from within continues….
