Today We Are on No Standard At All

Even though the U.S. financial system nearly experienced a total meltdown in late 2008, the truth is that most Americans simply have no idea what is happening to the U.S. economy.  Most people seem to think that the nasty little recession that we have just been through is almost over and that we will be experiencing another time of economic growth and prosperity very shortly.  But this time around that is not the case.  The reality is that we are being sucked into an economic black hole from which the U.S. economy will never fully recover.
The problem is debt.  Collectively, the U.S. government, the state governments, corporate America and American consumers have accumulated the biggest mountain of debt in the history of the world.  Our massive debt binge has financed our tremendous growth and prosperity over the last couple of decades, but now the day of reckoning is within sight. And it is going to be painful.
The following are 20 reasons why the U.S. economy is dying and is simply not going to recover....

#1) Do you remember that massive wave of subprime mortgages that defaulted in 2007 and 2008 and caused the biggest financial crisis since the Great Depression?  Well, the "second wave" of mortgage defaults in on the way and there is simply no way that we are going to be able to avoid it.  A huge mountain of mortgages is going to reset starting in 2010, and once those mortgage payments go up there are once again going to be millons of people who simply cannot pay their mortgages.  The chart below reveals just how bad the second wave of adjustable rate mortgages is likely to be over the next several years....

#2) The Federal Housing Administration has announced plans to increase the amount of up-front cash paid by new borrowers and to require higher down payments from those with the poorest credit.  The Federal Housing Administration currently backs about 30 percent of all new home loans and about 20 percent of all new home refinancing loans.  Tighter standards are going to mean that less people will qualify for loans.  Less qualifiers means that there will be less buyers for homes.  Less buyers means that home prices are going to drop even more.

#3) It is getting really hard to find a job in the United States.  A total of 6,130,000 U.S. workers had been unemployed for 27 weeks or more in December 2009.  That was the most ever since the U.S. government started keeping track of this statistic in 1948.  In fact, it is more than double the 2,612,000 U.S. workers who were unemployed for a similar length of time in December 2008.  The reality is that once Americans lose their jobs they are increasingly finding it difficult to find new ones. 

#4) In 2009, there were also 929,000 "discouraged" workers who are not counted as part of the labor force because they have "given up" looking for work.  That is the most since the U.S. government first started keeping track of discouraged workers in 1949.  Many Americans have simply given up and are now chronically unemployed.

#5) Some areas of the U.S. are already virtually in a state of depression.  The mayor of Detroit estimates that the real unemployment rate in his city is now somewhere around 50 percent.

#6) For decades, our leaders in Washington pushed us towards "a global economy" and told us it would be so good for us.  But there is a flip side.  Now workers in the U.S. must compete with workers all over the world, and our greedy corporations are free to pursue the cheapest labor available anywhere on the globe.  Millions of jobs have already been shipped out of the United States, and Princeton University economist Alan S. Blinder 
estimates that 22% to 29% of all current U.S. jobs will be offshorable within two decades.  The days when blue collar workers could live the American Dream are gone and they are not going to come back.   

#7) During the 2001 recession, the U.S. economy lost 2% of its jobs and it took four years to get them back. This time around the U.S. economy has lost more than 5% of its jobs and there is no sign that the bleeding of jobs is going to stop any time soon.

#8) All of this unemployment is putting severe stress on state unemployment funds.  At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and will need massive loans from the federal government just to keep going.

#9) 37 million Americans now receive food stamps, and the program is expanding at a pace of about 20,000 people a day.  The United States of America is very quickly becoming a socialist welfare state.

#10) The number of Americans who are going broke is staggering.  1.41 million Americans filed for personal bankruptcy in 2009 - a 32 percent increase over 2008.

(Continued)

The FED (Federal Reserve Bank) is neither federal, nor do they harbor any reserves. It is a private corporation that "lends" money to our government
at an interest rate. Which is where all your income tax money goes...to service the INTEREST on the national debt. Nowhere else. Not for roads or bridges or anything that would benefit We The People. GET IT? Oh. you don't? Read some more.
The value of the dollar has declined by over 90 percent since the creation of the Federal Reserve in 1913. Did the Fed really cause this loss of savings, insurance policies, retirement funds, and purchasing power? The answer, emphatically, is that with the cooperation of government, the Fed has indeed destroyed the dollar’s value.
In January 1993, National Geographic magazine published an article entitled “The Power of Money.” Written by Associated Editor Peter T. White, it presented a very clear explanation of how the Fed operates. White asked a Fed official where the organization had obtained $100 million it had just used to purchase some securities. “We created it,” said the Fed employee. “It’s money that didn’t exist before.” He matter-of-factly admitted that no limit existed on the Fed’s ability to create money out of nothing. In 2006, China and Hong Kong accounted for more than 50 percent of the increase in the amount of Treasury debt sold to the public.
In 2008, their share had fallen to 22 percent as the U.S. government increased its public debt by a record $1.2 trillion. In the first half of 2009, China and Hong Kong acquired only 9 percent of the more than $800 billion worth of Treasury bonds that were sold.And in June 2009, China became a net SELLER of U.S. Treasury notes and bonds!

To summarize, Ron Paul gets it but Ben & the Fed want to keep it.
Hope everybody's got their beef jerky, toilet paper and ammo stored up!

Today's currency rates are based on nothing, and this fact means that they are left completely open to manipulation by speculators. That said, I do believe that a return to the gold standard would be a step backwards. Gold is too limited in its uses as a commodity. Therefore, as today's economies are based on oil prices and industrial power, I suggest a more universal standard: the Joule. After all, energy is the currency of the universe if you think of thermodynamic systems as free markets. Forgive me if this is completely off-topic; I am not an economist.