This is a 5 part article I would like to share with the readers of The Real News Now because it is very informative and important.
The 5 part series is entitled "The Beginning of a U.S. economic collapse and hyper-inflation?"
Here is part 1. To read more just visit the links to the other 4 parts.
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Links:
The Dow Jones is up over 75% since it’s low in March of 2009. Oil is up over 90% from it’s low in February 2009. Copper is up 200% from it’s low in December 2008.
Prices for almost all stocks and commodities have been going through the roof, having analysts on wallstreet proclaiming the recession is over and an economic recovery is here.
But how could an economic recovery be here if unemployment is still at a multi-decade high over 17%.
The Truth is our economy is not recovering. Prices are only rising due to INFLATION.
The federal reserve has held interest rates at 0% for way to long. Our financial system has been flooded with trillions of dollars in newly printed money. Those who have had access to the FEDS newly printed money have done well this past year. This is why Wallstreet paid out record bonuses.
This has come at the expense of the rest of America becoming dependant on unemployment checks and foodstamps.
There are now over 40 million Americans on food stamps, up 22% over the last year. Food stamp usage has now increased for almost 2 years. In 2009 Americans received over 2.1 trillion dollars from the government in the form of transfer payments, which equals the 2.1 trillion dollars the citizens paid in taxes.
In 2010, the government paid out more in benefits then they received in taxes and the US budget deficit started to fall out of control. (if Americans were taxed 100% of their income, it would not be enough to balance the budget)
When medicare was created in 1966 it cost 3 billion dollars per year, and they estimated the cost would rise to 12 billion a year in 1990. The actual cost of medicare in 1990 was 107 billion dollars. (792% more than projected) Today it costs 408 billion dollars anually.
In 2003, at the beginning of the Iraq war the white house estimated the war would have a total cost of 50-60 billion dollars. In reality, it has already cost over 720 billion dollars. (Over 1000% more than projected)
The congressional budget office is projecting that the recently passed health-care bill will cost over 940 billion dollars over the next ten years. If history is any indication, the actual cost of the health-care bill over the next decade will be many trillion dollars. (making it the final nail in the coffin of the U.S. economy)
Our economy has stayed afloat until now due to the U.S. dollar status as the worlds reserve currency and our ability to borrow an endless amount of money from China. For many years the U.S. has been able to convince the Chinese to roll over their maturing U.S. treasuries plus interest into large amounts of new ones. However, China has now reduced their U.S. treasury holdings and the U.S. is now calling them currency manipulators.
China has manipulated their currency by pegging it to the U.S. dollar, but it’s their currency peg that has allowed Americans to maintain their phony standard of living for so long. If China listens to U.S. politicians and allows their currency to strengthen, Americans will no longer be able to afford cheap imports from China. U.S. politicians want China’s currency to strengthen because they believe it will decrease our trade deficit. (sure, our trade deficit would shrink from Americans importing less from China, but it wont have the desired effect of increasing U.S. exports)
Years ago America had companies like RCA and Zenith that produced televisions, but today there are no television manufacturers left.
In 1910 70% of U.S. womens clothing, and 40% of U.S. mens clothing was produced in New York. Today, the textile industry in New York is non-existent, and 35% of clothing purchased in the U.S. is imported from China.
Instead of investing to rebuild our manufacturing base, the U.S. government is now spending 1 trillion dollars annually to maintain military bases around the world and fund wars like Iraq and Afghanistan.
Oil reached a high in July of 2008 (147$/barrel) despite diminishing demand from developing nations. Congress held hearings on why oil prices were rising, not realizing it was their deficit spending that was sending oil prices through the roof. When oil reached 147$ a barrel unemployment was only 10%. Most families were still able to afford gas by cutting back on discretionary spending. Next time oil hits 147$ a barrel the next time around, we might have twice as many Americans unemployed. (this is not good)
The U.S. savings rate has fallen to 3.1%.
43% of Americans now have less than 10,000$ saved for retirement.
What’s going to happen when the U.S. government is inevitably forced to default on its social security obligations. Retirement will become a thing of the past. Americans getting ready to retire need to assume that social security wont be there. Retirees will soon be forced to re-enter the workforce which could send the unemployment rate up to great depression levels.
The U.S. national debt is now 13 trillion dollars. However the government is refusing to include the debts of Fannie May and Freddie Mac on its balance sheet when these are now government controlled entities. Including the Fannie Freddie debt of 6.3 trillion dollars, our real nation debt is over 19 trillion dollars. Once you include our 60 trillion dollars in unfunded liabilities for social security, medicare ect. our total federal obligations have now reached 79 trillion dollars.
It will be impossible for U.S. debts to ever be repaid without the U.S. printing the money and creating hyper-inflation.
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10:56 AM
zimbio
