Archive for the ‘Federal Reserve’ Category

Obamanomics: Hundreds Of Thousands Give Up Looking For Work

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Welcome to the “new normal” under Obamanomics.  In Europe, where Keynesian economics and Democratic Socialism has dominated for decades, unemployment rates are in the 20’s.   For the younger generation, they’re even higher.    Yet, instead of learning from their mistakes, Obama and the Democrats insist on repeating them.    Millions of innocent people are being hurt in the process.

The Associated Press reports:

After a full year of fruitless job hunting, Natasha Baebler just gave up.

She’d already abandoned hope of getting work in her field, working with the disabled. But she couldn’t land anything else, either — not even a job interview at a telephone call center.

Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.

“I’m not proud of it,” says Baebler, who is in her mid-30s and is blind. “The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on.”

Baebler’s frustrating experience has become all too common nearly four years after the Great Recession ended: Many Americans are still so discouraged that they’ve given up on the job market.

Older Americans have retired early. Younger ones have enrolled in school. Others have suspended their job hunt until the employment landscape brightens. Some, like Baebler, are collecting disability checks.

It isn’t supposed to be this way. After a recession, an improving economy is supposed to bring people back into the job market.

Read more at Fox News

Sadly, until we get rid of Obamanomics, the jobs won’t be coming back.  Business aren’t hiring because they never know when they’re going to be hit with a costly new regulation or tax.   Entrepreneurs aren’t willing to take the risk to start a new business in such a hostile business climate.

Donald Lambro at Human Events predicts that we’re in for “Four More Years of Pain“:

President Obama heads into the third month of his second term, still unable to find a cure for a sluggish economy, weak employment numbers and his own slipping job approval scores.

Second terms are usually challenging for presidents who have won re-election without having the slightest idea about what they will do over the next four years. And that’s what we are witnessing now with Obama, whose biggest problem is the anemic, job-challenged economy.

[…]  The depressing headlines of the past few days tell a sad tale of what the economy is like under his presidency:

– “Weekly Jobless Claims Get Weaker as Outlook Dims” was the gloomy headline over a Reuters news wire story Thursday morning on the CNBC website.

“The number of Americans filing new claims for unemployment benefits rose to its highest level in four months last week, suggesting the labor market recovery lost some steam in March,” Reuters reported.

– “Hiring Is Weaker at Private Companies,” a Washington Post headline blared Thursday.

“Companies hired at the weakest pace in five months in March as recent strong demand for construction jobs evaporated and growth in the vast services sector slowed, signs that the economic recovery could be hitting a soft patch,” the newspaper reported.

That’s the conclusion of the ADP National Employment Report Wednesday, which showed “that private employers added 158,000 jobs last month.” The ADP job survey said “the gain was the smallest since October.”

A separate report Wednesday on the services industry, the economy’s largest job sector, showed that employment growth “pulled back in March.”

You do not hear any of these reports on the nightly TV news because the networks cherry-pick reports that feed the White House line of a continuing economic recovery.

[…]  Thankfully, there are economic reporters who resist touting the White House line that everything is rosier under Obama’s policies.

“We’re approaching the four-year anniversary of the economic recovery, and it still doesn’t feel like much of one, what with the unemployment rate at 7.7 percent and wages stagnant over the past five years,” Neil Irwin, the Post’s veteran economic analyst, recently reported.

Read more at Human Events

Obama is so blinded by ideology that the tragic results of his policies on display all around him aren’t enough to convince him that his policies need to change.

The American workforce collapses on top of the young

Record 89,967,000 Not in Labor Force; Another 663,000 Drop Out In March

People Not In Labor Force Soar By 663,000 To 90 Million, Labor Force Participation Rate At 1979 Levels

Weak: Economy Adds Just 88k Jobs in March

Moody’s Chief Economist Previously Cited By White House Blames Obamacare For Jobs Numbers

Media Can’t Blame Dismal Jobs Report on the Sequester

Devastating Job Numbers Undermine Rationale for ‘Immigration Reform’

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Say Goodbye To The Purchasing Power Of The Dollar

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In Cyprus, politicians are trying to bail themselves out by stealing directly from people’s bank accounts.   In America, the government is more subtle.

It’s been stealing from us for years – through inflation.  Thomas Sowell explains:

One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.

Does that mean that Americans’ money is safe in banks? Yes and no.

The U.S. government is very unlikely to just seize money wholesale from people’s bank accounts, as is being done in Cyprus.

But does that mean that your life savings are safe?

No. There are more sophisticated ways for governments to take what you have put aside for yourself and use it for whatever the politicians feel like using it for.

If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save, before you are even aware, much less alarmed.

That is in fact already happening.

When officials of the Federal Reserve System speak in vague and lofty terms about “quantitative easing,” what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do — and has been doing in recent years, to the tune of tens of billions of dollars a month.

When the federal government spends far beyond the tax revenues it has, it gets the extra money by selling bonds. The Federal Reserve has become the biggest buyer of these bonds, since it costs them nothing to create more money.

This new money buys just as much as the money you sacrificed to save for years. But more money in circulation, without a corresponding increase in output, means rising prices.

Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus has done?

Read more at Investors Business Daily

Adam Taggart of Peak Prosperity blog warns:

Through the centuries – in historic cultures like that of Yap Island who used giant, immovable stone disks for commerce, to today’s United States, whose Dollar fiat currency exists primarily in digital form – “money” is able to be exchanged for goods and services because society agrees to accept it (at a certain rate of exchange).

But what happens when a society starts doubting the value of its money?

Fed, the Great & Powerful

The podcast goes into the mind-blowingly simple process by which new money is created in America by the Federal Reserve (or the “Fed”). That is to say:

  1. The Fed holds a meeting
  2. Those in the room decide how many more dollars they think the world needs
  3. Someone walks over to a computer and adds that many dollars to the banks, with a few clicks of the keyboard

The banks then, if they want to, lend this new money out into the economy on a fractional basis, adding even more “thin air” dollars to the nation’s money supply.

This unique ability in America lends the Fed enormous power. The power to create new money from nothing. With no limit.

And with that power, the Fed can control and/or influence economies and markets the world over.

Should such power exist? And if so, should a single private entity owned by the major players in the banking system be allowed to wield it?

Such power certainly has its dangers.

[…]  Money is not wealth. It is merely a claim on wealth.

You can’t print your way to prosperity. History is abundantly clear on that.

With the clarity of hindsight, it’s now obvious how the Fed has now painted itself into a corner.

[…]  Cyprus has awakened the world to the reality that central planners can appropriate their money with the bang of a gavel. And while we don’t yet know with certainty how things will unfold in Cyprus, we can project that events there have shaken society’s confidence in the soundness of fiat currency in general. If we know it can be confiscated or devalued overnight, we are less likely to unquestioningly accept its stated value. This doubt that strikes at the very foundation of modern monetary systems.

Cyprus is meaningful in the way that it shines a light on both the importance of hard assets and the risk it poses to market stability. It certainly increases the risk of our prediction of a 40%+ stock-market correction by September, as investors begin to realize that current high values are simply the ephemeral effect of too much money, instead of a sign of true value.

At this point, prudence suggests we prepare for the worst (by parking capital on the sidelines, investing in our personal resilience, etc.) and add to our hard asset holdings (like precious metals bullion, productive real estate, etc.) as insurance to protect our purchasing power. The dollar may strengthen for a bit versus other currencies and perhaps the financial markets, but the long-term trend is a safer and surer bet: Dollars will be inflated. There will be more of them in the future than there are today. So, while our dollars still have the purchasing power they do, we should use the window of time we have now to exchange paper money for tangible wealth at today’s prices.

Read more at Zero Hedge

Fire Up The Presses! Fed Prepares To Print More Monopoly Money

Baby Boomers to Suffer From Dollar’s Decline

The Government Is Expropriating Private Wealth at a Rapid Rate

Politicians steal your money through inflation

The Immorality of Government Inflation

Fed Up with the Fed

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To Pay For Current Spending Commitments, U.S. Government Would Have To Raise Taxes 64%

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Why do we have such massive deficits?  Because if the government actually tried to collect the amount it needs to cover its current spending levels and unfunded liabilities, it would trigger a revolt – and that’s not a metaphor.

Back in July, The Daily Ticker reported:

The truth is that our politicians have been very careful in their labeling of government receipts and payments so as to keep most of the coming bills associated with ‘Take As You Go’ off the books. Consider, for example, Uncle Sam’s promises to pay me my Social Security and Medicare benefits starting in roughly 10 years. The present value (the value in the present) of these promises is $400,000. How does this differ from my holding a Treasury bond valued at $400,000?

Fundamentally, it differs not at all, which means that the government has a lot more debt than it’s reporting.

How much more?

I’m not sure you want to know. I recently calculated the fiscal gap using the CBO’s AFS forecast. The fiscal gap measures the present value difference between all projected future federal expenditures (including servicing official debt) and all projected future taxes. The fiscal gap is thus the true measure of our government’s total indebtedness and the true measure of fiscal sustainability.

How big is the fiscal gap?

Brace yourself. It’s $222 trillion large! In comparison, official debt in the public’s hands is only $11 trillion.

Here’s one way to wrap your head around our $222 trillion fiscal hole: closing it via tax hikes would require an immediate and permanent 64 percent increase in all federal taxes. Alternatively, the government could cut all transfer payments, e.g., Social Security benefits, and discretionary federal expenditures, e.g., defense expenditures, by 40 percent. Waiting to raise taxes or cut spending makes these figures worse.

In short, our government is totally broke. And it’s not broke in 30 years or in 20 years or in 10 years. It’s broke today.

Read more at Yahoo Finance

Kurt Williamsen warns at The New American:

How do we know that a dollar bust is upcoming? The interest we pay on our national debt indicates our future. The interest the United States pays on its debt is now above $350 billion per year. Because more than 43 cents of every dollar the United States spends is now borrowed — and plans are in place to add about a trillion dollars more in debt each year — the interest payment on U.S. debt is expected to climb to a trillion dollars per year in 2017.

In other words, in four years, the interest on the debt will consume almost half of all revenue that the government collects, and each year after that it will get progressively worse — until it consumes all revenues.

As the interest on the debt grows, we won’t be able to borrow enough to pay our bills, and the government will have to either simply print more money to pay up or default. It will likely at least try printing money, and this is when inflation will zoom atmospherically. Even Ben Bernanke, the head of the Federal Reserve, acknowledged this scenario last year.

The chance that the United States will avoid this path in our near future is infinitesimal, but there is a chance. An unexpected business boom could spare us — socialist Norway stays solvent via exploiting oil revenues, and the United States has some of the biggest oil reserves in the world — or a massive downsizing of government could spark a boom — as happened during the Harding administration and at the end of WWII— but there’s little chance of either happening.

The government is issuing smothering business regulations and taxes, and the government will likely run higher debts than projected, not lower.

Debts will likely be higher for many reasons: Not only did the administration fight the minuscule sequester cuts tooth and nail,ObamaCare is much more expensive than promised and will only reduce costs if the death panel lives down to its name, as well as devastating the small businesses that most influence employment. Also, year-in and year-out, Congressional Budget Office figures used to project future tax revenues have predicted a rapidly growing economy and been consistently wrong; the federal flood insurance fund is empty; the Social Security Disability fund is almost empty; etc.

The great majority of U.S. spending is claimed to promote “fairness,” while critics have argued that it is immoral for Baby Boomers — the group mainly responsible for electing political spendthrifts — to heap devastating debt on their children and grandchildren. Ironically, the imminent demise of the dollar has accelerated to where the dollar will almost certainly crash during most Boomers’ lifetimes, so they will have to suffer along with their offspring.

I guess that’s fair.

Read more at The New American

True US Debt Is More Than $86 Trillion, Not $16 Trillion

Study: Each Child Born Today Will Inherit $1.5 Million Of National Debt

U.S. Debt Has Increased $48,994 Per SECOND Since Obama Took Office

US Gov’t Is Bankrupt, System of Republican Constitutional Gov’t Is At Stake

Mark Steyn Warns About What the World Will Look Like “After America” If We Don’t Change Course

Spending-Addict-In-Chief Insists There Is No ‘Debt Crisis’

Spending Addict-In-Chief: ‘We Don’t Have A Spending Problem’

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Understanding Biblical Economics is Key to Real Reformation


View at CBN News

Jay Richards warns at Townhall:

Every year, the federal government spends well over a trillion dollars more than it takes in. As a result, it has racked up seventeen trillion dollars in debt, most of it in the last decade. In seven years at current rates, the U.S. will need almost a fifth of the GDP from the rest of the world just to finance our national debt.

Just two of our federal entitlements, Medicare and Social Security, have “unfunded future liabilities” of $46.2 trillion. Total liabilities are $86.8 trillion or more. Entitlements and other mandatory spending will burden more and more of the federal budget in the coming years. At today’s burn rate, before long no realistic amount of tax revenue will be able to service the debt and fund the government’s basic functions.

We need not worry about the federal government defaulting, since, unlike U.S. states or private citizens, it can print the money it needs to pay the bills. It can and will do so if we don’t make a course correction fast. Massive monetary expansion will ultimately devalue every dollar in circulation and trigger the sort of hyperinflation that flattens entire societies in short order. That’s bad enough, but when government borrows and spends for our supposed benefit, somebody else will have to foot some or all of the bill. If our faith applies to every aspect of life, then it must have something to say about this moral outrage.

[…]  In the twentieth century, more than a hundred million people were murdered by their own governments. And that was just in communist countries. History and scripture agree: because of sin, governments with too much power become propagators of evil and destruction.

This speaks directly to government debt, since deficit spending is a symptom of government doing more than it can or should. The federal government now borrows and spends with such reckless abandon that it is careening toward a global economic catastrophe. If Christians can’t muster the courage to speak out against what Rep. Paul Ryan has called “the most predictable debt crisis in history,” we won’t deserve to be taken seriously after the collapse.

Read more at Townhall

Sadly, many Christians don’t know how to disciple our nation to turn the tide because they’ve never studied God’s design for economics or the Biblical role of government.    They can’t teach what they don’t know.   The  key to real reformation, says R.C. Sproul, Jr., is for Christians to understand and work to implement Biblical economic principles:

Christian author and teacher R.C. Sproul, Jr. told CBN News Anchor Lee Webb that he believes it’s time to return to the basics when it comes to economics.

“When we’re left arguing about whether or not we should have a marginal tax rate of 45 percent or 48 percent, and the conservative is stuck arguing for the 45 percent we’ve had an insufficient reformation in our thinking,” Sproul said.

Sproul believes that reformation will happen only when we return to scripture to see what God has to say about economics. That’s why he produced a video series called “Economics for Everybody.” It’s a compelling, even entertaining approach to a topic many find boring.

[…]   Sproul provides historical evidence that nations most influenced by biblical Christianity are nations that, by and large, have prospered. They are nations marked by decentralized governments and free markets.

But nations that reject God are marked by centralized power, tyranny, and no free markets. Unfortunately, he said he has observed some of those troubling trends in America now.

“The United States is not a free market. It’s an interventionist economy that’s been moving closer to socialism for over a century now,” he said. “I am not optimistic about our nation’s future economically.”

“We live in a country in which the state forbids me to hire a man unless I promise to pay him X number of dollars,” Sproul explained. “We now live in a country where I can’t hire 50 men unless I promise to buy them all health insurance, including access to abortion.”

“This is not economic liberty. This is not free markets,” he said. “We’re missing the fact that we’re the frog and the water is boiling.”

That’s why Sproul believes it’s not enough to think conservatively. We must think biblically and train our children biblically.

“It’s my conviction that education is always and everywhere religious,” he said.

“And it’s not a surprise that when 80 percent of evangelical parents have their children in the government’s schools that they’re going to embrace the religion of the government which is the worship of the state,” he said.

Sproul cautioned Christians to avoid despair. One way to do that is by returning to the beginning, to the Creation Mandate and begin to see that our work is part of worship.

Read more at CBN News

If you have never watched the “Economics For Everybody” series, I highly recommend it!   We cannot teach what we do not know!

Gallup: Increasing Numbers Of American Voters View Socialism Positively

Why understanding Biblical Economics is more important than ever

Christians Seduced By Socialism?

Keep Jesus out of your socialism

People vs. Profits?

Drop the Envy Card: Wealth Grows From Serving Others

Why is the Church Silent on Economics and Government?

God our Provider vs. The State

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Income Tax Turns 100 Years Old

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100 years of the federal government directly attacking the right to private property and to earn a living.   100 years of them skimming off the top before you even get paid what’s left of what you’ve rightfully earned.   100 years of politicians squandering your money and using it to bribe voters, expand their powers, grow the size of government and erode your liberties.

The saddest part is, there is not an American alive who can remember a time when the income tax did not exist, and therefore most do not even stop to consider whether it should exist at all.

John Hayward write at Human Events:

Sunday, February 3, is the 100th anniversary of the ratification of the Sixteenth Amendment, which makes it the one hundredth birthday of the income tax.  It has grown rather ill-tempered in its dotage.

Americans for Tax Reform commemorated the occasion by publishing a few fun facts about the income tax.  Among other interesting statistics, the initial top tax bracket was only 7 percent, and it didn’t kick in until income reached a whopping $11.6 million in 2013 dollars.  Only 358,000 people had to fill out 1040 forms at first, because the standard family deduction was an adjusted $93,000.

Over the past hundred years, the tax code has swelled from 400 pages to almost 74,000.  The top rate is 39.6 percent; add in state and local taxes, and you’ve got the government soaking up over half of every marginal dollar earned by the Evil Rich.  And the top bracket crashes down on those who earn over $450k, which is the new functional definition of a “millionaire.”  Every new tax – from the income tax itself, to the Alternative Minimum Tax and its prospective stepchild, the “Buffett Rule” – is sold as a small levy on the vast wealth of millionaires.  The AMT was only supposed to affect a couple of hundred people when it was implemented in 1969, but now it’s on the verge of grabbing 50 million taxpayers, if it’s not “fixed.”  In the early years of the income tax, Americans were likewise assured that it would only slip a few dollars from the bulging wallets of the wealthy.

Allowing the government to sink its feeding tubes into the veins of American income has fueled astonishing government growth.  That first itty bitty tax levy brought in a paltry $16.6 billion in revenue, adjusted for the past century of inflation.  Today the income tax brings in $2.7 trillion.  Government inevitably grows to fill, and exceed, the space made available for it.

[…]   The income tax is collected largely through payroll deductions, which makes the true cost of government almost completely invisible to the middle class.  Uncle Sam quietly takes his cut before the first dollar lands in an employee’s bank account.  If every worker was required to compute and pay his own taxes quarterly, in the manner of a small business, America would experience a taxpayer revolt that might sweep away a good deal of government bloat.  Imagine the fortunes of tax-cutting small-government candidates if most of the electorate had to figure up quarterly local, state, and federal tax bills, and write checks to all three authorities, a few days before each election.

Instead, the government takes big, silent bites out of everyone’s take-home pay.  The process has been made obscure and painless, in much the way that a mosquito numbs the skin of its victim before drawing blood.  We might also add the bite taken by Social Security and Medicare, programs that no young person entering the workforce today will ever get to enjoy, not in any manner resembling the benefits paid to the current retirees they are supporting.  Although taken for different purposes, that money has become fungible; it’s all part of the same river of cash, pouring into an irresponsible Leviathan that still borrows another 40 cents on top of every dollar it takes from us.  When we gave the State first claim on our income, we conceded far too much.

Then you’ve got the nauseating spectacle of Tax Day, when some people do become momentarily conscious of the immense cost of government, and grow a bit irritable… while others dance in the streets waving their tax “refunds,” which they actually regard as a “gift” from the government.  Free money!  Yay!  Thus are the citizens of this proud Republic made to dance like trained animals, as they celebrate the repayment of money the government unfairly took from them, without a penny of interest.  And then you’ve got those who receive “tax refunds” exceeding anything they paid into the system, thanks to tax credits.

Read more at Human Events

Heritage Foundation: The Income Tax Turns 100 Years Old

Government Will Take Half Your Paycheck In 2013

How about No Taxes at All?

Why the 16th Amendment Should Be Repealed

The Income Tax and Government Spending

It’s Time To Repeal the 16th Amendment

1913: A Bad Year For Our Constitution And Liberty

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Dictator-in-Chief Threatens To Abuse Executive Authority To Unilaterally Raise Debt Ceiling

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It really chaps his hide that our system of checks and balances requires him to work with other branches (and gives them the power to stop him if he goes too far). What he wants is absolute power to do as he likes with no accountability. And sadly, our spineless congress is likely to give it to him.

Fox News reports:

President Obama on Monday warned congressional Republicans again that he will not negotiate over the debt ceiling, saying Washington must increase the limit to pay its bills and that such brinksmanship would be “absurd” and “irresponsible.”

“The issue here is whether Washington will pay its bills,” Obama said in the final press conference of his first term. “We are not a deadbeat nation.”

[…]   The president used the press conference to attempt to frame the debt limit issue to the American public as one about the perils of not paying past debts – not about future spending.

“Raising the debt ceiling does not authorize more spending,” he said. “These are bills that have already been racked up.”

Republicans leaders responded by saying the debit limit debate is connected to spending, suggesting another round of intense negotiations when Congress returns later this month.

“The American people do not support raising the debt ceiling without reducing government spending at the same time,” said House Speaker John Boehner. “The House will do its job and pass responsible legislation that controls spending, meets our nation’s obligations and keeps the government running, and we will insist that the Democratic majority in Washington do the same.”

Read more at Fox News

As the Heritage Foundation points out, the idea that not raising the debt ceiling means that America will not be able to pay its bills is a straw man:

Default. The only way the federal government would default on its debt in the event the debt ceiling remains unchanged is for the Treasury to choose to default—an utterly implausible eventuality. Suggestions to the contrary in the press and elsewhere are simply inaccurate and shameful.

The amount of debt the federal government is allowed to issue is set by statute. Federal spending is similarly established by law. Treasury is at once prohibited by law from issuing additional debt above the limit and obligated by law to spend certain amounts for designated purposes. The Treasury has certain tools it can use to muddle through once the debt ceiling is reached, but these terms are limited and are expected to be exhausted toward the end of February.

If the federal government exhausted its financial management tools, then government spending would be limited to incoming receipts. At that point, the law setting a debt limit and the laws in place directing government spending would conflict—something would have to give.

The legal prohibition on selling additional debt because government borrowing has reached the statutory limit does not translate into an inability to spend (because tax money is still coming in). Thus, the consequences of reaching the debt limit are quite different from the consequences of a “government shutdown” as a result of the inability of Congress and the President to agree on spending.

Government Shutdown. This means certain governmental functions are suspended because the Treasury lacks the authority to spend, not because it lacks the means to spend. Further, a government shutdown applies primarily to those activities funded by what is called “discretionary” spending, essentially the day-to-day operations of the government, as opposed to entitlement spending such as Social Security and Medicare.

Very simply, reaching the debt limit means spending is limited by revenue arriving at the Treasury and is guided by prioritization among the government’s obligations. How the government would decide to meet these obligations under the circumstances is a matter of some conjecture. Certainly, vast inflows of federal tax receipts—inflows that far exceed amounts needed to pay monthly interest costs on debt—would continue. Thus, the government would never be forced to default on its debt because of a lack of income.

Read more at the Heritage Foundation

Obama’s Press Conference: Debt Ceiling Spin

Default Not at Issue, Federal Spending Is

3 Myths Obama Uses To Bully On The Debt Ceiling

Senate Democrats Offer Obama Unlimited Borrowing Power In Violation Of Constitution

Democrats Call For President To Abuse Constitution, Unilaterally Raise Debt Limit

Where Does the 14th Amendment Grant Dictatorial Power?

Dictator-in-Chief Unilaterally Declares No More Debt Ceiling

Levin: Obama Plans To Violate the Constitution, Unilaterally Lift the Debt Ceiling

Obama Missed More Budget Deadlines Than Any President Since 1920’s

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Here Comes More Monopoly Money: Fed Announces QE4

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That sucking sound is your savings going down the drain.  What was the definition of insanity, again?

Becket Adams reports at The Blaze:

The Federal Reserve on Wednesday announced that it will launch a fourth round of quantitative easing (“QE4”), this time committing $45 billion a month to the purchase of long-term Treasury securities.

You know what this means, right? It means that along with Washington’s open-ended $40 billion a month program to buy up mortgage backed securities (“QE3”), total monthly bond purchases by the Fed will amount to $85 billion.

Yes, that’s $85 billion a month.

[…]   There’s no calendar date set for when the Fed plans on calling it quits. They’re going to keep rates low and keep purchasing bonds until unemployment hits 6.5 percent.

That’s why we’re going to call it “QE4-Ever.”

Read more at The Blaze

Daniel Horowitz at Red State observes:

In addition to the bond purchasing, the Fed announced that it would keep the federal funds rate near zero….until unemployment dips below 6.5%!  Unless the labor market shrinks to oblivion, the unemployment rate will never dip that low as long as Obama is president.  And as long as we suffer from Obama’s taxation, regulation, and subsidization, thereby mitigating economic growth, his unelected acolytes will continue their monetary stimulus.  So we will continue devaluing the dollar and depleting saving as far as the eye can see.

Something is fundamentally wrong when a completely unelected branch of government has such unilateral power to affect our savings, purchases, and currency without any recourse.  Milton Friedman used to call it taxation without legislation.  The sad thing is that they obdurately refuse to learn the lessons from previous failures to tinker with the economy.  Nothing will change until we repeal the Fed’s dual mandate of destruction.

Read more at Red State

QE4: Another Big Step Down a Dangerous Road

QE4 Is Here: Bernanke Delivers $85B-A-Month Until Unemployment Falls Below 6.5%

Fire Up The Presses! Fed Prepares To Print More Monopoly Money

Politicians steal your money through inflation

The Immorality of Government Inflation

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Why understanding Biblical Economics is more important than ever

Many Christians vote for politicians who support completely unbiblical economic policies because they have no idea what the Bible has to say about economics.   All they know about economics they learned in secular government schools and the talking points put forth by politicians and political activists.

The world is reeling from poverty, drowning in debt, and suffering from other hardships caused by bad economic policies.   God’s Word has the answers.  Christians are called to disciple the nations to obey everything Christ commanded, INCLUDING in the area of economics, but we can’t teach hurting nations what we haven’t bothered to learn for ourselves.

That is why R.C. Sproul Jr. put together the “Economics For Everybody” DVD series to educate Christians in the basics:

A week ago, a lot of Americans received a jolt. After the election dust settled, they realized a majority of voters don’t want to lessen the role of government in their lives. If anything, they want to see government expand.

It was (and continues to be) the talk of the airwaves and Internet. As one radio host put it, in light of the election results, what we need is significant economic education. He is right – we do.

It is a pretty grave problem. The truth is that a majority of Americans in both political parties are radically ignorant of basic economics. In numerous ways, most people in the United States have been committed to some form of economic suicide for generations. They just don’t realize the extent of it.

This is one of the main reasons we created Economics for Everybody. The long-term implications of government intervention in the economy are extremely dangerous to all of us, especially to our religious freedoms. More and more people have a sinking feeling about this. But unless they take time to learn the basics of economics, nothing will change.

What is really at stake here?

If a majority of Americans are committed to the expansion of the welfare state, it will lead to increasing poverty for all. A basic economic principle is that whatever you subsidize you get more of.

If a dad offers to give money to his kids to clean up their rooms, he’ll get cleaner rooms. In the same way, if a government offers money to its citizens when they are unemployed, it will get more unemployment. Strange as it may seem, statistics consistently bear this out. And since the government offers money for all sorts of things it shouldn’t be offering money for, it’s no wonder we are where we are. We discuss this at length in ‘Lesson 10 – The Corporate and Welfare States of America.’

Next, if a majority of Americans are committed to government intervention in business through regulation, it will lead to a shrinking business sector. The basic economic principle here is that governments are unable to make accurate economic calculations.

The whole idea behind a planned economy is that central planners know better than producers and consumers what’s good for the economy. But such an idea assumes that a few people not only can comprehend, but actually direct the unique and ever-changing choices of limitless producers and consumers better than they can themselves.

It would be like a few people telling everyone else what they should buy at a grocery store. It’s functionally impossible to know all the discrete needs and desires of that many people, so the only way to attempt it is through general rules that restrict and direct consumption for all. At a business level, such a regulatory approach always ends in more and more businesses not being able to operate profitably and shutting down, ultimately resulting in the slow strangulation of an economy. We explain exactly how it happens in ‘Lesson 8 – The Basics of Government Intervention.’

Finally, if a majority of Americans don’t understand the relationship between economic freedom and religious freedom, they will inevitably lose both. The economic principle is that we are caught in a cosmic battle that has many economic aspects: God wants us to build up a godly civilization with our resources while Satan wants to prevent us from doing so.

In an economy based on Christian principles, there is economic freedom for people to use their land, labor and capital as they see fit. It is a matter of individual stewardship based on God-given ability and property. But in an economy based on atheistic principles, the government is a tool of Satan to control the lives of individuals so that they cannot steward their resources and time for God’s Kingdom. Think of the many socialist and communist economies that persecuted tens of millions of Christians.

The fact that there is a spiritual battle going on that has economic dimensions is lost on most people. But it is the reality of this, as well as the fact of sin in the world, that is so important economically.  History reveals this to us over and over again. We explain it in greater detail in ‘Lessons 6 & 7 – A Tale of Two Theologies.’

There is, of course, even more to economics. We try to explore as many basic principles as necessary in the twelve-lesson series. Our belief is that if people go through the entire Economics for Everybody curriculum, they will be in a much better place to understand what happened last Tuesday on Election Day. They will also understand what needs to happen in the future.

Read more at Economics For Everybody

5 Things Our Next President Won’t Do to Fix Our Economy

Christians Seduced By Socialism?

Keep Jesus out of your socialism

People vs. Profits?

Drop the Envy Card: Wealth Grows From Serving Others

Why is the Church Silent on Economics and Government?

God our Provider vs. The State

Myth of ‘Savior State’ That Can ‘Fix’ Economy Soon To Be Dispelled By Global Fiscal Crisis

Christians in a Post-Welfare State World

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The Magnitude of the Fiscal Mess We’re In

America needs a serious debt intervention.   I nominate Dave Ramsey for Treasury Secretary!

The Wall Street Journal offers a sobering reality check:

The next Treasury secretary will confront problems so daunting that even Alexander Hamilton would have trouble preserving the full faith and credit of the United States.

Sometimes a few facts tell important stories. The American economy now is full of facts that tell stories that you really don’t want, but need, to hear.

Where are we now?

Did you know that annual spending by the federal government now exceeds the 2007 level by about $1 trillion? With a slow economy, revenues are little changed. The result is an unprecedented string of federal budget deficits, $1.4 trillion in 2009, $1.3 trillion in 2010, $1.3 trillion in 2011, and another $1.2 trillion on the way this year. The four-year increase in borrowing amounts to $55,000 per U.S. household.

The amount of debt is one thing. The burden of interest payments is another. The Treasury now has a preponderance of its debt issued in very short-term durations, to take advantage of low short-term interest rates. It must frequently refinance this debt which, when added to the current deficit, means Treasury must raise $4 trillion this year alone. So the debt burden will explode when interest rates go up.

The government has to get the money to finance its spending by taxing or borrowing. While it might be tempting to conclude that we can just tax upper-income people, did you know that the U.S. income tax system is already very progressive? The top 1% pay 37% of all income taxes and 50% pay none.

Did you know that, during the last fiscal year, around three-quarters of the deficit was financed by the Federal Reserve? Foreign governments accounted for most of the rest, as American citizens’ and institutions’ purchases and sales netted to about zero. The Fed now owns one in six dollars of the national debt, the largest percentage of GDP in history, larger than even at the end of World War II.

The Fed has effectively replaced the entire interbank money market and large segments of other markets with itself. It determines the interest rate by declaring what it will pay on reserve balances at the Fed without regard for the supply and demand of money. By replacing large decentralized markets with centralized control by a few government officials, the Fed is distorting incentives and interfering with price discovery with unintended economic consequences.

Did you know that the Federal Reserve is now giving money to banks, effectively circumventing the appropriations process? To pay for quantitative easing—the purchase of government debt, mortgage-backed securities, etc.—the Fed credits banks with electronic deposits that are reserve balances at the Federal Reserve. These reserve balances have exploded to $1.5 trillion from $8 billion in September 2008.

The Fed now pays 0.25% interest on reserves it holds. So the Fed is paying the banks almost $4 billion a year. If interest rates rise to 2%, and the Federal Reserve raises the rate it pays on reserves correspondingly, the payment rises to $30 billion a year. Would Congress appropriate that kind of money to give—not lend—to banks?

The Fed’s policy of keeping interest rates so low for so long means that the real rate (after accounting for inflation) is negative, thereby cutting significantly the real income of those who have saved for retirement over their lifetime.

The Consumer Financial Protection Bureau is also being financed by the Federal Reserve rather than by appropriations, severing the checks and balances needed for good government. And the Fed’s Operation Twist, buying long-term and selling short-term debt, is substituting for the Treasury’s traditional debt management.

This large expansion of reserves creates two-sided risks. If it is not unwound, the reserves could pour into the economy, causing inflation. In that event, the Fed will have effectively turned the government debt and mortgage-backed securities it purchased into money that will have an explosive impact. If reserves are unwound too quickly, banks may find it hard to adjust and pull back on loans. Unwinding would be hard to manage now, but will become ever harder the more the balance sheet rises.

Read more at the Wall Street Journal

National Debt Reaches $16 Trillion….And Counting

Debt Has Increased $64,000 Per Taxpayer Under Obama

Study: Each Child Born Today Will Inherit $1.5 Million Of National Debt

Fire Up The Presses! Fed Prepares To Print More Monopoly Money

US Gov’t Is Bankrupt, System of Republican Constitutional Gov’t Is At Stake

Mark Steyn Warns About What the World Will Look Like “After America” If We Don’t Change Course 

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Fire Up The Presses! Fed Prepares To Print More Monopoly Money

All the first two rounds did was devalue our currency, increase our debt, create stagflation and suppress economic recovery.   But just like every other die-hard Keynesian who follows Keynes’ debunked economic theories with cult-like unquestioning loyalty, the conclusion they draw from failed results is “if we just try again and spend MORE money, THIS TIME it will work!”

Matt Cover reports at CNS News:

The Federal Reserve announced a new round of quantitative easing on Thursday, saying that it would continue to pump money into the economy until the unemployment picture improves.

[T]he Federal Reserve will begin buying mortgage-backed securities from private holders at a level of $40 billion per month until the unemployment situation improves, effectively pumping $40 billion per month into the economy for an undetermined period of time.

This third round of easing differs from the previous two in that it is an open-ended commitment by the Fed to inject money into the economy, rather than a promise of a fixed amount of easing as seen in the past.

Read more at CNS News

What could possibly go wrong?

ZeroHedge warns:

This is just another bailout for the big banks. (If the government had instead given money directly to the consumer, we would be out of this economic slump by now).

Bernanke claims that the main justification for QE3 is to boost employment.  This is slightly ironic, since Bernanke’s policies are largely responsible for creating high unemployment in the first place.

The real justification is to try to artificially prop up asset prices.  But that approach has been proven to be an absolute failure.

Read more at ZeroHedge

Jeff Harding observes at the Daily Capitalist:

The bottom line is that the Fed panicked. It is extraordinary that the Fed would announce an open-ended “we’ll print as much as it takes, as long as it takes” policy. Chairman Bernanke is sending a signal to the markets and to government that the economy is bad and getting worse and that the Fed will do its part as everyone expects them to do. This is a clear signal to the markets and the world that the Fed stands for monetary inflation. They don’t know what else to do.

As we have long been telling readers, unemployment is the key to Fed policy and they have formally made it their policy linchpin. As far back as May, 2011, on Fox Business News I said that Mr. Bernanke has no other real alternatives other than QE and that with rising unemployment, he would be pressured to “do something.”

One may ask why none of these policies have led to economic recovery. Why didn’t QE1 work? After all they told us then that it would promote “sustainable economic growth”. By the time QE2 was released we heard much of the same thing: it would “promote a stronger pace of economic recovery”. Had QE1 worked as they said, why did they need QE2? Now the Fed tells us again that another round will “support a stronger economic recovery”.

That begs this question: If QE1 and QE2 and Operation Twist didn’t work, why would QE3 work?

[…] What can we expect the consequences of QE3 will be?

1. Money steroids will give a temporary boost to the financial markets as evidenced by today’s euphoric response to the Fed’s announcement.

2. The impact on organic economic growth will be nil even though it may slightly increase GDP by Q1 2013.

3. Unemployment will remain high.

4. Economic growth will stagnate, if not decline, through the remainder of 2012 as money supply growth declines (TMS2).

5. Post Q1 2013, economic activity will again stagnate, assuming there are no policy changes or political changes (Romney is elected).

6. Europe and the rest of the world’s economies are in decline which will further depress the U.S. economy.

7. Price inflation is a guessing game. My guess is that it will remain within the Fed’s parameters. The key to price inflation will be credit creation through lenders and, while lending has shown some life (mainly the big banks with big companies), it is likely to flatten again as the economy stagnates, thus inflation will remain “Japanese.”

8. Interest rates will remain around their historic lows. While the housing market is showing some signs of life, its recovery largely depends on job growth which will remain subdued.

9. How much QE is a good question. I cannot see that any Fed chairman would print endlessly to a point of high price inflation. That would require much greater amounts of QE-type monetary stimulus plus it would require banks to lend, which means businesses would be willing to borrow, thus expanding credit and money supply to much higher levels. QE is not an efficient way to price inflation, and in a stagnating economy, borrowing will remain flat.

If you are a true believer and feel that the Fed is correct, you have to ask yourself hard questions about your assumptions since the Fed has been consistently wrong in their forecasts and policies. Now they insist on pursuing the same failed policies. Why would they work now?

The Fed continues to follow the same wrong policies as it has since the beginning of this depression. We now have one of the longest depressions in history that has been caused by the Fed and the fiscal policies of the Bush and Obama Administrations. They are devaluing the dollar, destroying capital, thwarting growth, and cheating savers out of their hard earned money. It is a cruel blow to the 23.1 million un/under-employed in the U.S. who need economic growth to create jobs. We need a new direction.

Read more at the Daily Capitalist

The Fed Goes Political

Shocker: Printing Billions of Dollars Out of Thin Air to Devalue Currency Boosts Economy by Measly One Percent

Politicians steal your money through inflation

The Immorality of Government Inflation 

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Happy 100th Birthday, Milton Friedman!

Without a doubt, this is one of my favorite clips of Milton Friedman schooling Phil Donahue on Capitalism, Socialism and greed:

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The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.” ~ Milton Friedman

Stephen Moore at the Wall Street Journal pays tribute to “The Man Who Saved Capitalism“:

It’s a tragedy that Milton Friedman—born 100 years ago on July 31—did not live long enough to combat the big-government ideas that have formed the core of Obamanomics. It’s perhaps more tragic that our current president, who attended the University of Chicago where Friedman taught for decades, never fell under the influence of the world’s greatest champion of the free market. Imagine how much better things would have turned out, for Mr. Obama and the country.

[…]  In the 1960s, Friedman famously explained that “there’s no such thing as a free lunch.” If the government spends a dollar, that dollar has to come from producers and workers in the private economy. There is no magical “multiplier effect” by taking from productive Peter and giving to unproductive Paul. As obvious as that insight seems, it keeps being put to the test. Obamanomics may be the most expensive failed experiment in free-lunch economics in American history.

Equally illogical is the superstition that government can create prosperity by having Federal Reserve Chairman Ben Bernanke print more dollars. In the very short term, Friedman proved, excess money fools people with an illusion of prosperity. But the market quickly catches on, and there is no boost in output, just higher prices.

Next to Ronald Reagan, in the second half of the 20th century there was no more influential voice for economic freedom world-wide than Milton Friedman. Small in stature but a giant intellect, he was the economist who saved capitalism by dismembering the ideas of central planning when most of academia was mesmerized by the creed of government as savior.

Friedman was awarded the Nobel Prize in economics for 1976—at a time when almost all the previous prizes had gone to socialists. This marked the first sign of the intellectual comeback of free-market economics since the 1930s, when John Maynard Keynes hijacked the profession. Friedman’s 1963 book “A Monetary History of the United States, 1867-1960,” written with Anna Schwartz (who died on June 21), was a masterpiece and changed the way we think about the role of money.

More influential than Friedman’s scholarly writings was his singular talent for communicating the virtues of the free market to a mass audience. His two best-selling books, “Capitalism and Freedom” (1962) and “Free to Choose: A Personal Statement” (1980), are still wildly popular. His videos on YouTube on issues like the morality of capitalism are brilliant and timeless.

Read more at the Wall Street Journal

Renown economist Thomas Sowell remembers his former teacher:

In being able to express himself at both the highest level of his profession and also at a level that the average person could readily understand, Milton Friedman was like the economist whose theories and persona were most different from his own — John Maynard Keynes.

Like many, if not most, people who became prominent as opponents of the left, Professor Friedman began on the left. Decades later, looking back at a statement of his own from his early years, he said: “The most striking feature of this statement is how thoroughly Keynesian it is.”

No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him.

As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman’s course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting.

I was still a Marxist after taking Professor Friedman’s class. Working as an economist in the government converted me.

[…]  Although Milton Friedman became someone regarded as a conservative icon, he considered himself a liberal in the original sense of the word — someone who believes in the liberty of the individual, free of government intrusions. Far from trying to conserve things as they are, he wrote a book titled “Tyranny of the Status Quo.”

Milton Friedman proposed radical changes in policies and institution ranging from the public schools to the Federal Reserve. It is liberals who want to conserve and expand the welfare state.

Read more at Real Clear Politics

Milton Friedman: Socialism is Force

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Happy 100th Birthday To Milton Friedman: A Century Of Freedom And Free Market

9 Unforgettable Quotes From Milton Friedman

Taxmageddon and Obamacare: What Would Milton Friedman Say?

Remembering Milton Friedman’s School Choice Legacy

Milton Friedman: Regulation In A Free Society

Milton Friedman Shows Us How Regulations Have Grown

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Clueless NYT Economist: A Billion Dollars Isn’t A Lot Of Money


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Yes, he really did say that.  Welcome to the elitist mindset.

When you are playing with other people’s money, NO amount seems like “a lot of money.”   But try taking $100 out of his wallet and throwing it to the wind, and suddenly it would seem like a whole lot to him!

Erica Ritz observes at The Blaze:

New York Times columnist Paul Krugman appeared as a guest on ABC’s This Week Sunday where he said, among other things, that Rep. Paul Ryan’s budget plan is a “fraud,” Scott Walker is trying to redistribute income upwards through tax cuts, and that it’s “terribly unfair” to hold Obama responsible for the shameful state of the United States economy.

If that’s not enough, the columnist remarked of Solyndra: “We’re talking as if a billion dollars was a lot of money…,” particularly in comparison to the size of the U.S. debt and the economy.  While this is true, the economist seemingly lacks any awareness that it is precisely this mindset thatleads to a $15 trillion dollar debt.

Read more at The Blaze

Paul Krugman: ‘It’s Terribly Unfair Obama’s Being Judged on the Failure of the Economy’

CBO: Obama stimulus may have cost as much as $4.1 million a job

The Krugman Fix

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10 Things That We Can Learn About Shortages And Preparation From The Economic Collapse In Greece

Economic Collapse for Dummies

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As unsustainable welfare states begin collapsing across the globe, the inevitable consequences are heartbreaking.   In Greece, it has gotten so bad that desperate parents are abandoning their children in record numbers.   It’s time to take warning and prepare to take care of our families should we be faced with similar circumstances.

Michael Snyder writes at Hawaii News Daily:

When the economy of a nation collapses, almost everything changes.  Unfortunately, most people have never been through anything like that, so it can be difficult to know how to prepare.  For those that are busy preparing for the coming global financial collapse, there is a lot to be learned from the economic depression that is happening right now in Greece.  Essentially, what Greece is experiencing is a low level economic collapse.  Unemployment is absolutely rampant and poverty is rapidly spreading, but the good news for Greece is that the global financial system is still operating somewhat normally and they are getting some financial assistance from the outside.  Things in Greece could be a whole lot worse, and they will probably get a whole lot worse before it is all said and done.  But already things have gotten bad enough in Greece that it gives us an idea of what a full-blown economic collapse in the 21st century may look like.  There are reports of food and medicine shortages in Greece, crime and suicides are on the rise and people have been rapidly pulling their money out of the banks.  Hopefully this article will give you some ideas that you can use as you prepare for the economic chaos that will soon be unfolding all over the globe.

The following are 10 things that we can learn about shortages and preparation from the economic collapse in Greece….

#1 Food Shortages Can Actually Happen

Most people assume that they will always be able to run out to their local supermarket or to Wal-Mart and get all of the supplies they need.

Unfortunately, that is a false assumption.  The truth is that our food distribution system is extremely vulnerable.

In Greece, many people are starting to totally run out of food.  Even some government institutions (such as prisons) are now reporting food shortages.  The following was originally from a Greek news source….

The financing for many prisons has decreased to a minimum for some months now, resulting in hundreds of detainees being malnourished and surviving on the charity of local communities.

The latest example is the prison in Corinth where after the supply stoppage from the nearby military camp, the prisoners are at the mercy of God because, as reported by prison staff, not even one grain of rice has been left in their warehouses. When a few days earlier the commander of the camp announced to the prison management the transportation stoppage, citing lack of food supplies even for the soldiers, he shut down the last source of supply for 84 prisoners. The response of some Corinth citizens was immediate as they took it upon themselves to support the prisoners, since all protests to the Justice ministry were fruitless.

#2 Medicine Is One Of The First Things That Becomes Scarce During An Economic Collapse

If you are dependent on medicine in order to survive, you might want to figure out how you are going to get by if your supply of medicine is totally cut off someday.

In Greece, medicine shortages have become a massive problem.  The following is from a recent Bloomberg article….

Mina Mavrou, who runs a pharmacy in a middle-class Athens suburb, spends hours each day pleading with drugmakers, wholesalers and colleagues to hunt down medicines for clients. Life-saving drugs such as Sanofi (SAN)’s blood-thinner Clexane and GlaxoSmithKline Plc (GSK)’s asthma inhaler Flixotide often appear as lines of crimson data on pharmacists’ computer screens, meaning the products aren’t in stock or that pharmacists can’t order as many units as they need.

“When we see red, we want to cry,” Mavrou said. “The situation is worsening day by day.”

The 12,000 pharmacies that dot almost every street corner in Greek cities are the damaged capillaries of a complex system for getting treatment to patients. The Panhellenic Association of Pharmacists reports shortages of almost half the country’s 500 most-used medicines. Even when drugs are available, pharmacists often must foot the bill up front, or patients simply do without.

#3 When An Economy Collapses, So Might The Power Grid

Try this some time – turn off all power to your home for 24 hours and try to live normally.

Sadly, most people simply do not understand just how dependent we are on the power grid.  Without power, all of our lives would change dramatically.

In Greece, authorities are warning of an impending “collapse” of the power grid.  If it goes down for an extended period of time in Greece, the consequences would be catastrophic….

Greece’s power regulator RAE told Reuters on Friday it was calling an emergency meeting next week to avert a collapse of the debt-stricken country’s electricity and natural gas system.

“RAE is taking crisis initiatives throughout next week to avert the collapse of the natural gas and electricity system,” the regulator’s chief Nikos Vasilakos told Reuters.

RAE took the decision after receiving a letter from Greece’s natural gas company DEPA, which threatened to cut supplies to electricity producers if they failed to settle their arrears with the company.

#4 During An Economic Collapse You Cannot Even Take Water For Granted

If the power grid goes down, you will soon no longer have clean water coming out of your faucets.  That is one of the reasons why it is absolutely imperative that the power grid stay operable in Greece.

Sadly, most people don’t understand just how vulnerable our water system is.  In a previous article, I quoted from a report that discussed how rapidly our water supply would be in jeopardy in the event of a major transportation disruption….

According to the American Water Works Association, Americans drink more than one billion glasses of tap water per day. For safety and security reasons, most water supply plants maintain a larger inventory of supplies than the typical business. However, the amount of chemical storage varies significantly and is site specific. According to the Chlorine Institute, most water treatment facilities receive chlorine in cylinders (150 pounds and one ton cylinders) that are delivered by motor carriers. On average, trucks deliver purification chemicals to water supply plants every seven to 14 days. Without these chemicals, water cannot be purified and made safe for drinking. Without truck deliveries of purification chemicals, water supply plants will run out of drinkable water in 14 to 28 days. Once the water supply is drained, water will be deemed safe for drinking only when boiled. Lack of clean drinking water will lead to increased gastrointestinal and other illnesses, further taxing an already weakened healthcare system.

What will you do when clean water stops coming out of your faucets?

You might want to start thinking about that.

#5 During An Economic Crisis Your Credit Cards And Debit Cards May Stop Working

Most people have become very accustomed to using either debit cards or credit cards for almost everything.

But what would happen if the financial system locked up for a period of time and you were not able to use them?

This is something that the citizens of Greece are potentially facing in the coming months, and this is something that all of us need to start thinking about.

Read more at Hawaii News Daily

‘Real News From The Blaze:’ Global Economic Meltdown on the Horizon?

America’s Road To Financial Collapse

Economic Alert: If You’re Not Worried Yet…You Should Be

America On Board for ‘Financial Train Wreck’, Economist Warns

Peter Schiff Warns of the Coming Collapse of the Dollar: “We’re not even near the bottom yet”

Cramer: We‘re ’Two Stages From a Financial Collapse So Huge It‘s Hard to Get Your Mind Around’

‘Rich Dad, Poor Dad’ Author: I’m Preparing For Economic Collapse, Stocking Up on Food & Guns

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Reality Check: The Fiat Dollar is the real reason for high gas prices

This is what happens when the Fed prints fiat money out of thin air and steals the value of the currency in our pockets. The gas pump is only the first casualty of out-of-control inflation. Thanks alot, Bernanke.


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In this video, Nobel Prize winning economist and author Milton Friedman gives a brief explanation of the causes of inflation:

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Here he offers the cure.  But it isn’t easy or painless.  Are we finally willing to make the tough choices and stop this destruction cycle?

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Here is the in one-hour documentary version.  Well worth the time to understand a crucial issue that has the power to usher in the possible collapse of our economy and threaten our nation’s very survival, as it has done to many nations before us.  If you’re a parent, this is a MUST SEE for your high school or college student.  Most economics classes barely either barely touch it, or teach it from the failed Keynesian perspective:

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Gas Prices Skyrocket, Hyperinflation Looms As Oblamea Denies His Policies Are Responsible

Inflation: It’s Getting Crazy

American Thinker: The inflation disaster is near

The Immorality of Government Inflation

Politicians steal your money through inflation

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US Gov’t Is Bankrupt, System of Republican Constitutional Gov’t Is At Stake

The U.S. is following the path of Europe, which paved the way for social unrest and totalitarian dictatorships with their irresponsible spending and bankruptcies.  This is going to be a VERY bumpy ride – one which Americans are unaccustomed to and largely unprepared for.

Doug Casey has put together a thoroughly researched and sobering report on how dire America’s unsustainable financial situation is, and what were are likely to face when we finally are forced to face the music.

I’m only quoting a few of the key paragraphs here, but I encourage you to take the time to read the whole thing because it will open your eyes to the reality we face.  Casey specifically breaks down each area of federal spending and why it’s unsustainable, including Justice, Defense, Social Security, Medicare, Transportation, Education, Social Services, and several others. Ironically, most of these aren’t included among the enumerated powers granted in the constitution, but it’s unlikely that any politician will have the courage to scale back the budget to only constitutionally mandated expenditures, even though the survival of our republic is at stake.

From Casey Research:

To sum up the situation, given its financial condition and the political forces working to worsen it, the US government is facing a completely impossible and irremediable situation. I’m going to try to illustrate that here. But because I’m a perpetual optimist, not a gloom-and-doomer, I’m also going to give you solutions to the purely financial problems – albeit with some good news and some bad news. The good news is, there actually are solutions. The bad news is that there is zero chance that any of them will be put into effect.

The problems are one hundred percent caused by the US government, not by bankers, brokers or the real estate industry – although they have been complicit. Recall what government is: an organization with a monopoly of force within a certain geographical area. Its purpose is, ostensibly, to protect the inhabitants of its bailiwick from the initiation of force. That implies three functions: an army to protect against aggressors coming from outside of its borders; police to protect citizens from aggressors inside its borders; and a court system to allow citizens to adjudicate disputes without resorting to force. Assuming you’re going to have a government, it’s important to limit it strictly, lest it get completely out of control – it’s got a monopoly of force, after all – and overwhelm the society it’s supposed to protect.

Here I want you to distinguish government from society. They are not only two totally different things, but are potentially antithetical to each other. This is because the essence of government is force, not voluntary cooperation. Everything that people think the government provides (beyond some forms of protection) is really provided by society or with resources the government has taken from society. It’s critical to understand this, or you won’t see the slippery slope the US is now sliding on.  […]

Let’s divide people into three classes – rich, poor and middle class. Rich people are going to be okay. They can bribe the politicians to change the laws, hire the lawyers to interpret the laws, the accountants to limit their liabilities, advisors to help them profit from distortions and travel agents to get them out of Dodge. They may get eaten later, but for the moment, don’t worry about them.

The poor don’t have much to lose, and the government is going to keep throwing benefits at them to keep them happy. That’s a shame because it cements them to the bottom as poor people – but that’s a topic for another day.

The real danger is to the middle class, and it’s a serious matter because the US is a middle-class society. These are people who try to produce more than they consume and save the difference in order to grow wealthier. That formula has worked well up to now – but almost everybody saves dollars. What happens, however, if the dollars are destroyed? It means that most of what they saved disappears, and most of the middle class will disappear with it, at least for that generation. They’ll be very unhappy, and they’ll be up for some serious changes.

[…]

My point is to make it very apparent that there really is no conventional solution to the US government’s financial crisis. It’s reached a stage where the government will have to start defaulting on some of its obligations. You decide which. The only questions are political; the economics are quite clear. Nothing will be done, as the Super Committee showed. I believe they would have done something if they thought it possible and knew how. […]

So, the US government will go bankrupt. That’s not the end of the world. Lots of governments have gone bankrupt, some of them numerous times – like almost all of them here in South America, where I am at the moment.

In fact, there’s a temptation to look forward to it eagerly. After all, the state is the enemy of any decent human. One might hope that when they bankrupt themselves, maybe we will get to live in a libertarian paradise. But that’s not likely the way things will come down; rather, just the opposite. Not all state bankruptcies are just temporary upsets. Most of the great revolutions in history have financial roots. Great revolutions are more than just unpleasant and inconvenient; they’re extremely dangerous.

The French Revolution of 1789 was brought on by the financial collapse of the French government. It was a good thing to depose Louis XVI, but things didn’t get better – they got much, much worse with Robespierre and then Napoleon. In Germany, the destruction of the German mark in 1923 set the stage for the Nazis – and then the Depression ushered them in. The collapse of the Czar’s regime in Russia in 1917 seemed to be good news at first – but then things got worse, and they stayed worse for a long time.

The fact is that when a government collapses, especially when the government is providing all the things the US government does today, people want somebody to fix it; they want their goodies back. It’s well known that over 50% of the US population are net recipients of state largess. And the degree of state support and involvement in the US is far, far greater than it was in France, Russia or Germany. After a period of chaos, it’s always the people who are most political, who have the most rabid statist ideas who get the public’s attention and rise to the top.

It seems highly likely that the US will get a savior, someone full of bravado, who assures the booboisie that he can straighten things out – if he is given sufficient power.

Read more at Casey Research

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