Half of Americans Live in a Household Where Someone is Getting Something from the Government

Unemployment, Foreclosures, Rising Debts and Despair: America’s Social Crisis

February 12, 2012

International Forecaster - 2012 is going to be a difficult year, but not as dreadful as anticipated. The neutralization process, as usual, we covered over by the availability of money and credit. We have already seen that via Fed $1 trillion loans to the ECB and the admission by the Fed that QE 3 is on the way. In Europe banks have borrowed $3.2 trillion and they find they will need $1 trillion more. These borrowings are more than troubling and indicate that there are 523 banks in Europe in serious trouble.

We have predicted a reversal of our GDP estimates of early December. In late December we knew the game had changed dramatically with the introduction of the Fed’s loan to the ECB. Thus, the minus 1-1/2% to 2% negative growth to gains of 1-1/2% to 2%. We see part of the European bank funds moving into US Treasuries to provide collateralization for more ECB loans and the introduction of QE 3, which we believe will aggregate about $800 billion. If you put that together with a possible $300 billion from European banks you have $1.1 trillion. That should carry the US market far into next year.

World elitists have chosen their path that is jam money and credit into the system until it won’t take it anymore and hyperinflation explodes. This is well borne out by scores of trillion dollar loans created out of thin air and now QE 3 and how many QE’s beyond that. You ask how long the Fed can buy 80% Treasuries? The answer is almost indefinitely until, of course, the bottom falls out.

Using current policy there cannot be a real recovery, only an up and down sideways movement, which allows the financial sector to get richer and the economy to go nowhere. The latter is part of the enslavement process. You lose your job, home, vehicles and have to hunt for food and shelter. At some point government will pick these people up and put them in internment camps.

Nothing has been fixed at the jobs level and in fact the situation is worsening. Even those who can get jobs are paid $10 to $15 an hour, not the $15 to $30 they were previously paid, as jobs still leave the country under free trade, globalization, offshoring and outsourcing.

The worker is being deliberately being trampled in the process and being subjected to higher and higher inflation, as too big to fail banks get bigger and bigger. If you can believe this there is now talk about too big to fail executives. Yes, individuals that would operate above the law with immunity. We just saw a sample of this in Europe for financial ministers who would act in the new ESM. They would be immunized. You are going to see lots more of this.

The latest report on the use of credit cards is near recent peaks. Even if individuals do not have the funds to spend they are spending via debt accumulation. The lessons of 2008 are long forgotten. Consumption is far beyond production and debt never got paid down. Consumers haven’t changed – they just continually accumulate debt. The big winners have been the bankers, the big bankers. Due to credit card usage the too big to fail banks have increased in size by almost 40%. These same banks are still leveraged 13 to 1, whereas 9 to 1 is normal.

It should also be kept in mind that over that four-year period the short-term national debt rose from $10 trillion to more than $15 trillion, a debt the American people are incapable of servicing. We see states that have to pay back loans to the federal government for extended unemployment. Obvious to what is going on these states floated bonds to pay off the federal government debt, only pushing the responsibility further off into the future.

This is today’s American mentality. The public doesn’t understand the debt problems and either doesn’t want to know or could care less. They do not understand that $1 trillion in foreign profits leave America to create jobs everywhere except in America. The best companies in America are being bought up by foreigners and with them go American jobs. We have lost 450,000 companies that moved offshore over the past 12 years along with 12 million good paying American jobs. Our country and our culture are being dismantled. New jobs and almost 10 million jobs are part-time jobs working about 34 hours a week, usually at a lower wage. What does it take to make people realize that something is seriously wrong?

We believe the increase in household borrowing will continue at between 3 and 10 percent monthly. The public believes the government propaganda of recovery. We do not, so debt will continue to pile up. At play as well is something more sinister and that is people are desperately buying perhaps believing that they may not have another opportunity. Another very disturbing factor is the large increase in borrowing from retirement plans, as seniors reach for a life preserver, their saving having been decimated by inflation and almost non-existent interest rates.

As you know QE 3 is upon us to clear bank balance sheets of toxic waste and to have $800 billion or more on hand to meet the Fed’s wishes. We predicted this and the method months ago. The Fed is pumping trillions of dollars into banks in Europe as well as the US to try to save the financial system. All those old mortgages are going to belong to the American public. The concept gives them help in rolling over almost $3 trillion in Treasury debt this year.

Everything that is being done this year in the financial field is being done to assure the reelection of the current president. The other probable Republican candidate, Mr. Romney, has 93% of his contributions coming from banking, Wall Street and transnational conglomerates. That doesn’t give Americans much choice.

During the tenure of the current president direct government payments have increased by more than 1/3rd – almost half of Americans live in a household where someone is getting something from the government. Two-thirds of all federal spending will be individuals. A veritable welfare state accompanied by a $1.2 trillion deficit.

The Republican candidate you would think would have a strong case for election, but we don’t believe that is so, because Americans like welfare and will take all they can get, especially the elderly, which is understandable. Citizens want the welfare to go on forever. Real unemployment hasn’t changed over the past year. The official U3 rate is laughable. U6 is 15.1% and real unemployment is 22.5%. Wages don’t rise much at all, but inflation does. Last year half of US workers earned $26,000.

The powers behind government are trying their best to get Mr. Obama reelected. If unsuccessful they’ll own the Republican candidate as well, as they own most of Congress. Both bonds and stocks are selling at highs, which have to aid Mr. Obama’s chances. This has been accomplished by the massive creation of money and credit. As a result Mr. Obama is probably going to carry more than 55% of the vote. Half or more of Americans do not want the welfare to stop.

No matter how ridiculous the unemployment figures look at 8-3/8% for U3, you may well see that figure at 7% to 7-3/8% by November. That has to help reelection chances. Few will ask how the figures got there. They’ll just believe the bogus results.

There are 4.8 million workers no longer looking for work. We can assure you they are collecting every government benefit they can. There are 24 million Americans unemployed doing the same thing. U6 relates to 16.7% unemployment and if you strip out the birth/death ratio you find unemployment at 22.5%. Wages are up a paltry 2% or less, official inflation is 2.8% and real inflation is 11.5%. This starkly shows you the tremendous loss in purchasing power for the average American. While this transpires corporate America records record layoffs and record profits, as the gap between the rich and the poor widens.

The president can expect more help from the Fed between now and November. Anything that can be done to embellish his chances will be done. This is the kind of world we live in; where the insiders can do anything they please. If Ron Paul is not elected then you can expect more of the same until all you liberty and freedom are gone. What a sad commentary for a once great nation. You can still turn this around. It is up to you to stop these elitists.