Homeless in Canada/ A Success in Singapore …
Posted: November 23, 2011 Filed under: 2011, 2012, Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a commentI’ve been reading with interest your series on people who left North America for a better life elsewhere. I’m one of them.
In Canada, I graduated with a businessdegree from University of Toronto, saw guys who proudly wore their Masonic rings with only history degrees get jobs as bond analysts. Other guys who actually grappled with the math behind bond analysis were not even considered.
I knew the score when I saw the PhD candidate who used to mark my term papers putting prices on vitamin bottles at a health food store. He too was neither well connected, nor eligible for affirmative action.
After going through near homelessness two times in the first seven years after graduating, I started a new career as a writer and analyst, first in Taiwan, later Philippines, and finally Singapore, where I permanently settled.
Whereas before I got the ‘overqualified/underexperienced’ canard in Canada, suddenly my skills were in demand.
In Canada, I could send out 500 CVs without a response; in Asia, it rarely took more than a few weeks to aninterview. Sometimes, I was even cold called to come in. I heard even more examples of this from British, Danish, Australian and New Zealand friends of mine, some of whom actually endured homelessness before finding prosperity abroad.
Despite being a foreigner in Asia, I never endured the ironic oddity of being well educated, yet wondering how I would pay rent or the bills the way I did in Canada.
TAXATION AND SOCIAL SECURITY
My Ex-Pat friends from Britain, Australian, and New Zealand often talk about how we paid more taxes in a few months at home than we do in one of year of living here, yet Singapore somehow finds the money to constantly build new subways, new roads and pick up the garbage every day (in Toronto, they pick it up once a week).
This is also true throughout the region, not just Singapore. How we can pay so much more tax money to Canada and they can’t even afford to build a new subway line every 10 years or find money to keep the libraries open?
Like other expatriates in your articles, I accept that citizens born here get breaks in everything from subsidies to taxes and education costs not available to non-citizens. I do not consider this at all unfair; in fact, I don’t understand why Canada and the US find such a natural concept so hard to swallow.
In Singapore, so long as you work at any job, the system is set up so that everything from your mortgage to retirement funds to major health expenses can be financed out of your mandatory retirement savings, which equal approximately a third of your earnings.
This means that as long as you buy a home within your income band, the entire mortgage payment can be financed out of your retirement fund contribution – not your disposable income. Set it up right and after your mortgage payment, you will still have retirement fund cash to spare for your retirement and healthcare fund, should you get seriously ill.
It also means that if you lose your job tomorrow, provided, you’ve worked steadily, you can finance the monthly mortgage payments for years out of your accumulated retirement savings without ever having to open up your actual wallet.
The entire system is 100% self-financing and makes welfare and social support programs unnecessary. It is by no means a state secret so I have no idea why the west never touches this brilliant scheme, let alone speaks of it.
Crime exists but tends to be petty and low level. In Singapore, a foreigner is much more likely to be quoted an outrageous price for an apartment rental, electronic goods than to be mugged. Last year, a smart-ass, 30 year old Swiss punk was caught defacing a subway train with spray paint. He was given 4 and a half months in jail and caned four times.
And there are benefits to such strictness: When I was sick in Toronto, I would not let my girlfriend go out to the all-night drug store to get me medicine. Here, I’m really not worried about my wife walking out at night.
IMMIGRATION
Socially, my wife and I find ourselves part of a larger network of both locals and expatriates who have lived overseas.
That’s another thing about Singapore: Compared to Canada or the United States, it controls its immigration tightly. Now, here’s the strange part: Canada’s immigration form goes on for something like sixty pages, yet a lot of unskilled people get in, many illegally.
Singapore’s permanent residence application form is only four pages of double-sided paper, yet it is a lot stricter: You can’t even apply unless you are already working here (and therefore, an asset to the economy) have established a viable business here, or considerable wealth to contribute.
Singapore initially only gives you a work visa, not permanent residence. You only can apply for permanent residence after working here for a few years. Unless you are running your own business, the permanent residence application has to be signed by your employer and it is by no means guaranteed you will receive it.
Singapore is not perfect. In the last five years, they let in too many people too quickly, causing real estate prices to more than double in just seven years. Now the government is scrambling to build 3 transit lines and a new highway in ten years (though the traffic and immigration is well under control compared to say, Toronto). They are also making it harder to get permanent residency or a work visa, as they now understand that with its limited land space, Singapore can only hold so many people.
Singapore is not for everyone. If you’re here to be sleazy or have a decadent time on the cheap, you have better options in other parts of Asia. If you have an illegal drug habit, the customs form informs you that you could hang for it in this country, so you have been warned. Personally, I’m attracted to strong law and order but apparently, it is not for everyone.
Peoples’ manners are rougher than in the west. There are social tensions between educated and uneducated, rich and poor. If you tell an average Singaporean about the street beggars or unemployment in the west, he will not believe it: Many do not know how good they have it and still think that the streets are paved with gold in the West.
They have no idea that the average westerner in a condo of 1,000 square feet or less cannot afford to keep a maid the way Singaporeans typically do. But having said that, for us, the good has far outweighed the bad.
I thank my lucky stars for the day I left Canada. Everything from my income level to economic security, to the work opportunities I’ve enjoyed hinged on that fortunate decision to leave Canada.
The Coming European Superstate That Germany Plans To Cram Down The Throats Of The Rest Of Europe …
Posted: November 23, 2011 Filed under: 2012, Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a commentA lot of people were puzzled about what German Chancellor Angela Merkel meant when she recently stated that the ultimate solution to the financial crisis in the EU would “mean more Europe, not less Europe”. Well, now we are finding out. A leaked internal German government memo entitled “The Future of the EU: Required Integration Policy Improvements for the Creation of a Stability Union” actually proposes the creation of a “European Monetary Fund” which would be given the power to run the economies of troubled European nations. This “stability union” would be quickly followed by the creation of a full-fledged “political union”. Essentially, this leaked memo proposes the creation of a “European Superstate” which will be crammed down the throats of the rest of Europe whether they like it or not. National sovereignty would be a thing of the past and European bureaucrats would run everything. Of course this will never be accepted by the people of Europe until they feel the bitter pain of the coming financial collapse, but we are starting to see that there is already a clear plan for what the Germans wish to implement in the aftermath of the coming crisis.
A lot of people have just assumed that if there is a massive financial collapse in Europe and the euro crashes that it will mean that end of the euro and potentially the breakup of the EU. But that is not what the Germans have planned at all.
An article in the Telegraph has posted details about the leaked internal German government memo mentioned above. It really is startling to see that a full-fledged “political union” in Europe is being discussed at the highest levels of the German government….
The six-page memo, by the German foreign office, argues that Europe’s economic powerhouses should be able to intervene in how beleaguered eurozone countries are run.The confidential blueprint sets out Germany’s plan to tackle the eurozone debt crisis by creating a “stability union” that will be “immediately followed by moves “on the way towards a political union”.It will prompt fears that Germany’s euro crisis plans could result in a European super-state with spending and tax plans set in Brussels.
Can you imagine what Europe would look like under such a plan?
National sovereignty would be a thing of the past.
Another article in the Telegraph says that the leaked memo proposes that immediately a “European Monetary Fund” should be set up that would have the power to take over and run the economies of European nations that get into too much debt. But according to the memo this would just be an intermediate step toward a full “political union”….
The six-page German foreign ministry paper sets out plans for the creation of a European Monetary Fund with a transfer of sovereignty away from member states.The fund will have the power to take ailing countries into receivership and run their economies. Even more controversially, the document, entitled The future of the EU: required integration policy improvements for the creation of a Stability Union, declares that the treaty changes are a first stage “in which the EU will develop into a political union”. “The debate on the way towards a political union must begin as soon as the course toward stability union is charted,” it concludes.
As the crisis in Europe has gotten worse, the Germans have become more aggressive about throwing their weight around. At this point, German Chancellor Angela Merkel is the most important politician in Europe and she has been taking the lead in responding to this financial crisis.
As I have written about previously, there have been persistent rumors that French President Nicolas Sarkozy and German Chancellor Angela Merkel have been “secretly plotting” to create a “new eurozone” that will fundamentally change the way that Europe is run.
For example, the following is from an article that recently came out in the Telegraph….
France is drawing up plans to create a breakaway organisation of eurozone countries with its own treaty, parliament and headquarters – a move that could significantly undermine the existing European Union.
That same article also talked about the goals that France and Germany are hoping to achieve through all of this….
France and Germany are understood to want to strengthen the union between eurozone countries with new taxes and legal measures to stop nations borrowing and spending too much in future.
Of course it is important to note that there is no way that the people of Europe are going to go for any of this right now.
But after feeling the pain of a massive financial collapse for a while will they change their minds?
What is clear is that the status quo is not going to last much longer. Something has got to change. Unfortunately, Germany and France seem determined to push the rest of Europe in the direction of creating a European Superstate.
If you want to get a really good idea of what is happening in Europe right now, just check out this video of a recent speech by Nigel Farage on the floor of the European Parliament on November 16th, 2011. Trust me, it is worth the couple of minutes that it takes to watch it.
But before fundamental structural changes take place in Europe, we are going to see an absolutely crippling financial collapse first. With each passing day, there are more signs that things are rapidly unraveling. The following are just a few of the noteworthy news items from Europe that have come out over the past week….
*In Italy there were violent clashes between protesters and police after Mario Monti unveiled his new austerityprogram. To get an idea of how crazy things are getting over in Italy, just check out this video.
*Just like what happened when austerity was implemented in Greece, it looks like Italy is now headed down the road toward a major recession. Industrial orders in Italy for the month of September declined by 8.5 percent. That is really, really bad news.
*The EFSF has already been forced to buy up huge numbers of its own bonds. That essentially means that the EFSF is already a bad joke.
*Dozens of big banks all over Europe have been downgraded in recent weeks. Even German banks are getting downgraded now. The other day, Moody’s downgraded the ratings of 10 major German banks.
An increasing number of people that work in the financial world are starting to get really freaked out about everything that is going on.
The following is what Mark Mobius, head of the emerging markets desk at Templeton Asset Management,had to say recently….
“There is definitely going to be another financial crisis around the corner, because we haven’t solved any of the things that caused the previous crisis.”
Willem Buiter, the chief economist of Citigroup, believes that if something is not done quickly, there will be a financial collapse in Europe in very short order….
“Time is running out fast. I think we have maybe a few months — it could be weeks, it could be days — before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophedragging the European banking system and North America with it. So they have to act now.”
Ann Barnhardt of Barnhardt Capital Management actually shut down her entire firm because she could no longer guarantee that the money her clients were putting into the futures and options markets would be safe. Posted below are extended excerpts from the open letter that she recently released to the public. Normally I would not post such extended excerpts, but in this case I believe that they are warranted. What Barnhardt has written should be a huge wake up call for all of us. It is refreshing (and a bit frightening) to get an honest assessment of the corruption in the financial world from someone that has made a good living in that world. The following is how she began her letter….
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not.And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
So how did the MF Global collapse wreck the system? Barnhardt went on to explain this….
The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
Even more frightening, Barnhardt says that the MF Global collapse is just the “tip of the iceberg” and that more collapses like this are about to happen….
I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.
So what does Barnhardt say that we should all do? She is actually recommending that everyone should completely abandon the futures and options markets….
And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.
Remember, a few weeks ago I warned you all that a massive derivatives crisis is coming. Anyone that plays around with derivatives at this point is playing with fire. Barnhardt says that she will never reopen her firm untilBarack Obama is removed from office and fundamental reforms to the financial system have been implemented….
Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.
We are on the verge of a financial crisis that could potentially be just as bad (or even worse) than the financial crisis of 2008.
Right now, 2012 is shaping up as a very, very bad year.
As I have written about previously, when European leaders proposed that private Greek bondholders should take a “50% haircut”, they massively undermined faith in the European financial system.
Now panic and fear are in the air and it is unlikely that financial markets will be calmed any time soon.
Already, there are early signs of the kind of massive credit crunch that almost brought about “the end of the world” in financial markets back in 2008.
For example, a CNBC article that was posted on Friday reported that the flow of credit in Europe is seriously drying up….
Fear over European banks’ exposure to risky government debt stalked markets and harried bank executives on Friday, as unsecured lending between banks evaporated and the cost of secured loans rose.
And as a recent article posted on Zero Hedge discussed, a similar thing is starting to happen in the United States….
The entire dollar funding market is now at levels not seen since the Lehman collapse and is effectively frozen. Only this time it is much, much worse as never before has the global central bank cadre been assumed and implied to be backstopping the global liquidity cascade. Ex-out the implied backstop by the monetary authorities, and liquidity is now locked up more than ever in the history of capital markets.
So what should we do about this?
We should take action and get prepared for what is coming.
Unfortunately, an increasing number of Americans seem to be “checking out” instead. According to a recent Gallup poll, alcohol consumption in the United States has hit a 25 year high. More than one out of every ten Americans over the age of 12 is on prescription antidepressants, and most American families spend endless hours staring at the television in an attempt to escape the pain and the frustration that they constantly feel.
Hopefully by working together we can help more Americans (and more Europeans as well) to wake up, to get off their couches, and to take action in a positive way.
Time is running out and the economic crisis is rapidly getting worse.
We don’t have any time to waste.
The next financial crisis will be hellish, and it’s on its way …
Posted: November 19, 2011 Filed under: 2012, Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a comment“There is definitely going to be anotherfinancial crisis around the corner,” says hedge fund legend Mark Mobius, “because we haven’t solved any of the things that caused the previous crisis.”
We’re raising our alert status for the nextfinancial crisis. We already raised it last week after spreads on U.S. credit default swaps started blowing out. We raised it again after seeing the remarks of Mr. Mobius, chief of the $50 billion emerging markets desk at Templeton Asset Management.
Speaking in Tokyo, he pointed to derivatives, the financial hairball of futures, options, and swaps in which nearly all the world’s major banks are tangled up.
Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius’ guess of 10 times the world’s annual GDP. “Are the derivatives regulated?” asks Mobius. “No. Are you still getting growth in derivatives? Yes.”
In other words, something along the lines of securitized mortgages is lurking out there, ready to trigger another crisis as in 2007-08.
What could it be? We’ll offer up a good guess, one the market is discounting.
Seldom does a stock index rise so much, for so little reason, as the Dow did on the open Tuesday morning: 115 Dow points on a rumor that Greece is going to get a second bailout.Let’s step back for a moment: The Greek crisis is first and foremost about the German and French banks that were foolish enough to lend money to Greece in the first place. What sort of derivative contracts tied to Greek debt are they sitting on? What worldwide mayhem would ensue if Greece didn’t pay back 100 centimes on the euro?
That’s a rhetorical question, since the balance sheets of European banks are even more opaque than American ones. Whatever the actual answer, it’s scary enough that the European Central Bankhas refused to entertain any talk about the holders of Greek sovereign debt taking a haircut, even in the form of Greece stretching out its payments.
That was the preferred solution amongGerman leaders. But it seems the ECB is about to get its way. Greece will likely get another bailout — 30 billion euros on top of the 110 billion euro bailout it got a year ago.
It will accomplish nothing. Going deeper into hock is never a good way to get out of debt. And at some point, this exercise in kicking the can has to stop. When it does, you get your next financial crisis.
And what of the derivatives sitting on the balance sheet of the Federal Reserve? Here’s another factor behind our heightened state of alert.
“Through quantitative easing efforts alone,” says Euro Pacific Capital’s Michael Pento, “Ben Bernanke has added $1.8 trillion of longer-term GSE debt and mortgage-backed securities (MBS).”
Think about that for a moment. The Fed’s entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets.
“As the size of the Fed’s balance sheet ballooned,” continues Mr. Pento, “the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet.
“Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30-to-1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51-to-1! If the value of their portfolio were to fall by just 2%, the Fed itself would be wiped out.”
Mr. Pento’s and Mr. Mobius’ views line up with our own, which we laid out during interviews on our trip to China this month.
The Entire System Has Been Utterly Destroyed By The MF Global Collapse …
Posted: November 19, 2011 Filed under: 2012, Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse 1 CommentPresenting The First MF Global Casualty
Presented without comment, merely to confirm that the market as we know it, no longer exists.
BCM Has Ceased Operations (source)
Posted by Ann Barnhardt – November 17, AD 2011 10:27 AM MST
Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.
The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europeinevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.
Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcytrustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.
And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.
Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.
Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.
To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.
Global Systemic Crisis: Decimation of the Western banks …
Posted: November 19, 2011 Filed under: Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a commentAs anticipated by LEAP/E2020, the second half of 2011 is seeing the world continuing its unstoppable descent into global geopolitical dislocationcharacterized by the convergence of monetary, financial, economic, social, political and strategic crises. After 2010 and early 2011 which has seen the myth of a recovery and exit from the crisis shattered, it’s now uncertainty that dominates the States’ decision-making processes just like businesses and individuals, inevitably generating increasing apprehension for the future. The context singularly lends itself: social explosions, political paralysis and / or instability, return to the global recession, fear over banks, currency war, the disappearance of more than ten trillion USD in ghost-assets in three months, widespread lasting and rising unemployment…
Besides, it’s this very unhealthy financial environment that will cause the “decimation (1) of Western banks” in the first half of 2012: with their profitability in freefall, balance sheets in disarray, with the disappearance of trillions of USD assets, with states increasingly pushing for strict regulation of their activities (2), even placing them under public supervision and increasingly hostile public opinion, now the scaffold has been erected and at least 10% of Western banks (3) will have to pass that way in the coming quarters.
However, in this environment, increasingly chaotic in appearance, trends emerge, the outlook sometimes appears positive… and most importantly, the uncertainty is much less than one might think, if only one analyzes the changes in the world within the framework of the world after the crisis rather than with the criteria of the world before the crisis.
In this GEAB issue, our team also presents its 2012-2016 “country risk” forecast for 40 States, demonstrating that one can depict the situations and identify strong trends through the current “fog of war” (4). In such a context, this decision-making tool is proving very useful for the individual investor as well as the economic or political decision-maker. Our team also presents the changes in the GEAB $ Index and its recommendations (gold-currencies-real estate), including of course the means to protect oneself from the consequences of the coming “decimation of Western banks”.
For this GEAB issue, our team has chosen to present an excerpt from the chapter on the decimation of Western banks in the first half of 2012.
First half of 2012: Decimation of Western banks
In fact, it will be a triple decimation (5) culminating in the disappearance of 10% to 20% of Western banks over the next year:
. a decimation of their staff
. a decimation of their profits
. and lastly, a decimation of the number of banks.
. a decimation of their staff
. a decimation of their profits
. and lastly, a decimation of the number of banks.
It will be accompanied, of course, by a drastic reduction in their role and importance in the global economyand directly affect banking institutions in other regions of the world and other financial operators (insurers, pension funds …).
An example of bank information at the time of a global systemic crisis Intesa SanPaulo’s stress test results compared to its European competitors (and compared to the first casualty: Dexia) (6)
Our team could address this issue like the Anglo-Saxon media, the president of the United States and his ministries (7), Washington and Wall Street experts and, on a wider basis, mainstream media (8), have done recently over all aspects of the global systemic crisis, that’s to say by saying, “It’s Greece and the Euro’s fault!” It would obviously be a virtue to reduce this part of the GEAB to just a few lines and suppress any hint of analysis of the possible causes in the US, the UK or Japan. But, coming as no surprise to our readers, it won’t be LEAP/E2020’s choice (9). As the only think tank to have anticipated the crisis and rather accurately foreseen its various phases, we’re not now going to give up an anticipation model that works well, benefitting from prejudice without any predictive power (Don’t let’s forget that the Euro is still alive and well (10) and that Euroland has just completed the small feat of, in six weeks, putting together the 17 parliamentary votes needed to strengthen its financial stabilization fund (11)). So, instead of echoing the propaganda or “readymade thought” let’s remain faithful to the method of anticipation and stick to a reality that we must uncover in order to understand it (12).
In this case, for ages, when one thinks of “banks” one thinks first of all of the City of London and Wall Street (13). And with good reason, London for over two centuries and New York for nearly a century have both been the two hearts of the international financial system and the lairs par excellence of the world’s major bankers. Any global banking crisis (as any major bank event), therefore, begins and ends in these two cities since the modern global financial system is a vast process of incessant wealth recycling (virtual or real) developed by and for these two cities (14).
The decimation of the Western banks that begins and will continue in the coming quarters, an event of historic proportions, cannot therefore be understood without first of all measuring and analyzing the role of Wall Street and London in this financial debacle. Greece and the Euro will undoubtedly play a role here as we have discussed in previous GEAB issues, but these are triggers: Greek debt is yesterday’s banking venality that is exploding in the public arena today; the Euro is the arrow of the future that is piercing the current financial balloon. These are the two fingers that highlight the problem, but they aren’t the problem. This is what the wise man knows and the fool doesn’t, to paraphrase the Chinese proverb (15).
In fact, one only needs to look at London and Wall Street to anticipate the future of Western banks, since it’s quite simply there that the banking flock gathers together to come and drink its dollar dose every evening. And the condition of the Western banking system can be measured through changes in bank staff numbers, their profitability and their shareholders. From these three factors one can directly deduce their ability to survive or disappear.
The decimation of bank staff numbers
Let’s begin with the numbers then! Here the picture is bleak for banking sector employees (and now even for the “banking system stars”): since mid-2011 Wall Street and London have continuously announced mass layoffs, spread by the secondary financial centers such as Switzerland and Euroland and Japanese banks. A total of several hundreds of thousands of banking jobs that have disappeared in two waves: first of all in 2008-2009, then since the late spring of this year. And this second wave is gradually gaining momentum as the months go by. With the global recession now under way, the drying up of capital flows to the United States and the United Kingdom as a result of the geopolitical and economic changes under way (16), the huge financial losses in recent months, and all kinds of regulations which gradually “break” the super-profitable banking and financial model of the 2000s, the heads of major Western banks have no choice: they must, at any price, cut their costs as quickly as possible and deeply. Therefore, the simplest solution (after that of overcharging clients) is to lay off tens of thousands of employees. And that’s what is happening. But far from being a controlled process, we see that every six months or so Western bank leaders find that they had underestimated the extent of the problems and are therefore obliged to announce further mass layoffs. With the political and financial “perfect storm” looming in the U.S. for next November and December (17), LEAP/E2020 anticipates a new series of announcements of this kind from early 2012. The “cost-killers” in the banking sector have some good quarters in front of them when we see that Goldman Sachs, which is also directly affected by this situation, reduced to limiting the number of green plants in its offices to save money (18). Although, after eradicating the green plants, it’s usually the “pink slips” (19) that flower.
The decimation of the number of banks
In a way, the Western banking system looks increasingly resembles the Western steel industry of the 1970s. Thus the “ironmasters; thought they were the masters of the world (incidentally actively contributing to the outbreak of World Wars); just like our “major merchant bankers” thought they were God (like Goldman SachsCEO) or at least masters of the universe. And the steel industry was the “spearhead”, the “absolute economic example” of power for decades. Power was counted in tens of millions of tons of steel just like the power of billions in bonuses for merchant bank executives and traders in recent decades. And then, in two decades for the steel industry, in two / three years for the banks (20), the environment has changed: increased competition, collapsing profits, massive layoffs, loss of political influence, the end of massive subsidies and ultimately nationalization and / or restructuring giving birth to a tiny sector compared to what it was at its heyday (21). In a sense, therefore, the analogy applies to what awaits the Western banking sector in 2012/2013.
Share price changes (and, therefore, losses) for the British taxpayer following the partial government takeover of RBS and Lloyds – Source: Guardian, 10/2011
Already on Wall Street in 2008, Goldman Sachs, Morgan Stanley and JP Morgan had to suddenly turn themselves into “bank holding companies” to be saved. In the City, the British government had to nationalize a whole swathe of the country’s banking system and to this day the British taxpayer continues to bear the cost because the banks’ share prices have collapsed again in 2011 (22). This is also one of the Western banking system’s characteristics as a whole: these private financial players (or market listed) are worth practically nothing. Their market capitalization has gone up in smoke. Of course this creates an opportunity for nationalization at low cost to the taxpayer from 2012 because it’s the choice that will be imposed on States, in the United States as in Europe or Japan. Whether it be, for example, Bank of America (23), CitiGroup or Morgan Stanley (24) in the United States, RBS (25) or Lloyds in the United Kingdom (26), Société Générale in France, Deutsche Bank (27) in Germany, or UBS (28) in Switzerland (29), some very large institutions “too big to fail” will fail. They will be accompanied by a whole swathe of medium or small banks such as Max Bank which has just filed for bankruptcy in Denmark (30).
Faced with this “decimation”, States’ resources will be quickly overrun, especially in these times of austerity, low tax revenues and the political unpopularity of the bank bailout (31). Political leaders will, therefore, have to focus on protecting the interests of savers (32) and employees (two areas full of electoral promise) instead of safeguarding the interests of bank executives and shareholders (two areas full of electoral pitfalls, whose precedent in 2008 demonstrated its economic futility (33)). This will result in a new collapse in financial stock prices (including insurance, considered very “close” the banking situation) and increase hedge funds, pension funds (34) and other players’ turmoil traditionally closely intertwined with the Western banking sector. No doubt this will only strengthen the general recessionary environment by limiting loans to the economy just as much (35).
Global public debt (1990-2010) (as a % of GDP, constant 2010 exchange rates) – Sources: BRI / McKinsey, 08/2011
To simplify the view of this development, one can say that the Western banking market, significantly reducing its scope and the number of players in this market, has to downsize proportionally. In some countries, especially those where the very large banks account for 70% or more of the banking market, it will inevitably lead to the disappearance of one or another of these very large players … whatever their leaders, stress tests or rating agencies say (36). If you are a shareholder (37) or customer of a bank that may collapse in the first half of 2012 there are, of course, precautions to take. We offer a number in the recommendations in this issue. If one is an officer or employee of such an institution, things are more complicated because we now think it’s too late to avoid serial bankruptcies; and the banking job market is saturated because of massive layoffs. However, here is a piece of advice from our team if you are an employee in any of these institutions, if you are made an interesting offer of voluntary redundancy, take it as the next few months, the redundancies won’t be voluntary and will be under much less favorable conditions.
Notes:
(1) Decimation was a Roman military punishment by death of one legionnaire in ten when the army had shown cowardice in battle, disobedience or inappropriate behavior. The Roman system of decimation worked by drawing lots.
(2) Regulations that severely excise the banks’ most profitable activities. Source: The Independent, 12/10/2011
(3) Our team believes the percentage to be somewhere between 10% and 20%.
(4) Fog of war to which the mainstream media incidentally contribute to a great extent instead of trying to clarify the situation.
(5) Considering decimation in its widest sense, that’s to say a sharp decrease can be much more than the Roman era’s 10%.
(6) As far as LEAP/E2020 is concerned, this type of classification presages nothing since the current shock is much higher in intensity and duration than the assumptions of the stress tests. And this equally applies to the US banks of course.
(7) Taking everything into account regarding Barack Obama, in difficult position for the next presidential elections because of his disastrous economic record and the deep disappointment of most of those who voted for him in 2007 because of his many broken promises, he must at all costs try to blame anyone or anything for the disastrous state of the economy and American society. So why not Greece and the Euro? When that doesn’t work anymore (in a couple of months), it will be necessary to find something else, but short-sighted management is an Obama administration specialty; no doubt his Treasury Secretary Timothy Geithner, the faithful Wall Street link, will find another explanation. In any case, it’s not Wall Street’s fault, we can at least be certain of that. Otherwise, the Obama administration will always bring out the “specter of Iran” to try and divert attention from the United States internal problems. Incidentally, this seems to be the current situation with the cock-and-bull story of the attempted assassination of the Saudi ambassador to Washington by Mexican drug traffickers paid by Iranian intelligence. Even Hollywood would balk at the improbability of such a scenario, but to save the “Wall Street” soldier and try to be re-elected, isn’t it worth a try? Sources: Huffington Post, 26/07/2011; NBC, 13/10/2011
(8) This mainstream media (financial or general) have, in fact, a brilliant history in anticipating the crisis. You certainly remember their 2006 headlines warning you against the 2007subprime crisis, announcing the Wall Street “implosion” of 2008 and, of course, in early 2011 telling you of a major return of the crisis in summer 2011! No, you don’t remember? Don’t worry, your memory is good … because they never made the headlines, they never warned you of these major events and their causes. So, if you continue to think that, as they repeat every day, the current problems are caused by “Greece and the euro”, it’s that you think they have suddenly all become honest, intelligent and insightful … and you must therefore also believe in Father Christmas in the same sense. It’s beguiling, but not very effective for facing the real world.
(9) For a long time, our team has been underlining the European difficulties, anticipating rather correctly the evolution of the crisis on the « Old Continent ». But we try not to fall victim of the syndrom of the European tree that hides the forest of major US and UK problems.
(10) A bit of education: those who bet on a Euro collapse a month ago have lost money again. To the rhythm of “the end of the Euro crisis” roughly every 4 months, they won’t have much left by 2012. Whilst the United States for example have not been able to demonstrate their ability to overcome the opposition between Republicans and Democrats on the control of their deficits.
(11) Whilst the United States, for example, have not been able to demonstrate their ability to overcome Republican and Democrat opposition on the control of their deficits.
(12) It’s appalling to see the G20’s preoccupation with the Euro whilst the central issue of the future is the Dollar. Obviously, the huge media manipulation operation launched by Washington and London will have succeeded once again in deferring, for a time, the inevitable questioning of the US currency’s central status. As anticipated by our team, one can expect nothing from the G20 until the end of 2012. It will continue to talk, pretend to act and to actually ignore the key issues; those are the hardest to put on the table. The recent announcements of an increase in resources for the IMF are a part of these empty words that will not be acted upon because the BRICS (the only ones able to augment IMF funds) will not finance an institution in which they continue to only have marginal influence. Meanwhile, these announcements make believe that there is still a shared commitment to international action. The alarm will be all the more painful in the months to come.
(13) If you think of Greece it’s because you are Greek or that you are a manager of shareholder of a bank which has lent too much to the country over the last ten years
(14) And in a way also for the two States involved. But this is already a moot point, and widely discussed for that matter, to know if such financial markets are a blessing or a curse for the States and people that host them.
(15) “When a finger is pointing at the moon, the fool looks at the finger”
(16) Between Euroland’s increasing integration which deprives the City of lucrative markets and closer economic, financial and monetary ties with the BRICS, bypassing Wall Street and the City, they are growing shares of the global financial market escaping London and New York banks.
(17) See GEAB N°57
(18) Source: Telegraph, 19/08/2011
(19) In the United States the « pink slip » is a pink form indicating layoff. Source: Wikipedia
(20) It takes more time to relocate heavy industry than a trader’s desk.
(21) This is, more or less, the procedure followed in the United States and Europe.
(22) See chart above.
(23) Bank of America is definitely at the confluence of major and growing problems: a lawsuit against it claiming $50 billion for concealing losses on the acquisition of Merrill Lynch in late 2008, a massive grassroots rejection by customers following its decision to impose a $5 per month cost for cash cards, a long and unexplained crash of its website; series of trials over subprime involving individual owners and local authorities, and a threat to place Countrywide in bankruptcy, another of its acquisitions in 2008, to limit its losses. According to LEAP/E2020, it embodies the ideal US bank for a crash scenario between November 2011 and June 2012. Sources: New York Times, 27/09/2011; ABC, 30/09/2011; Figaro, 29/06/2011; CNBC, 30/09/2011; Bloomberg, 16/09/2011
(24) The US bank which, in 2008, received the largest slice of public financial support and which, once again, is panicking the markets. Sources: Bloomberg, 30/09/2011; Zerohedge, 04/10/2011
(25) One of the most vulnerable banks in Europe. Source: Telegraph, 14/10/2011
(26) Which itself is also seeing the hour of the cut in its credit rating approach. Source: Telegraph, 12/10/2011
(27) The leading German bank, which is already exposed to a cut in its credit rating. Source: Spiegel, 14/10/2011
(28) UBS is also on the road to a cut in its credit rating. Source: Tribune de Genève, 15/10/2011
(29) Société Générale, Deutsche Bank and UBS have a point in common of particular concern: all three rushed to the US “El Dorado” during the last decade, investing like drunken sailors in the US financial bubble (Deutsche Bank in subprimes, as Société Générale in CDS and UBS in tax evasion). Today, they don’t know how to exit this maelstrom that increasingly drives them to the bottom each day. In passing, we recall that in 2006, we recommended that European financial institutions free themselves from US markets as soon as possible, which appeared very dangerous to us.
(30) Source: Copenhagen Post, 10/10/2011
(31) Even the BBC, certainly marked by the UK riots in summer 2011, asks itself a question, “unthinkable” just a year ago for this type of media: can the United States expect social unrest? To ask the question is to answer it. And in Europe, a country like Hungary, with Social-Nationalist government, directly accused the banks, especially foreign ones, of being responsible for the crisis facing the country. Source: BBC, 20/09/2011; New York Times, 29/10/2011
(32) Of which an increasing number have begin to rebel against banking system practices, especially in the United States where Wall Street rejection is growing exponentially, weakening major US banks on a daily basis. Sources: CNNMoney, 11/10/2011; MSNBC, 10/11/2011
(33) And it’s even worse than economic futility since a recent study had shown that banks that received public financing were subsequently shown to be the most prone to make risky investments.Source: Huffington Post, 16/09/2011
(34) US public pension funds are now facing a financial chasm estimated at between one and three trillion USD. Will the US public authorities choose to save the banks or their retirees? Because they will soon have to choose. Source: MSNBC, 23/09/2011
(35) Source: Telegraph, 02/10/2011
(36) None of these banks are able to withstand the global recession and the implosive melding of financial assets that will prevail in the coming months.
(37) We could have also developed the point that we are witnessing a process of “bank shareholder decimation”.
GEAB is a frequent contributor to Global Research. Global Research Articles by GEAB
Harry Dent : The Great Crash Ahead …
Posted: November 17, 2011 Filed under: 2012, Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a commentHarry Dent is an American economist who predicted the Global Financial Crisis presents his new book “The Great Crash Ahead” (co-authored with HS Dent President Rodney Johnson) .He is the Founder and Presidentof the H. S. Dent Foundation, whose mission is “Helping People Understand Change”. Using exciting new research developed from years of hands-onbusiness experience, Mr. Dent offers a refreshingly positive and understandable view of the future.
Harry S. Dent Jr. is one of the smartest, savviest economic researchers around, and his track record for being RIGHT when conventional wisdom has been wrong cannot be ignored.Harry Dent shares his view on which asset classes you should invest in and which you should avoid. If you want to make sure you have all your financial bases covered in the months and years ahead, you owe it to yourself to hear what he has to say.
It’s The End Of The Eurozone As We Know It …
Posted: November 14, 2011 Filed under: Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a commentStick a fork in it, the eurozone as we know it is done. That’s the message we’re hearing from every media outlet and talking head this morning. But whether the EU survives in its current incarnation or takes on a new form, the agenda remains the same, the evisceration of all national sovereignty and the centralization of power into a dictatorial federal superstate.
Words like “depression,” “collapse,” and “apocalypse,” are not normally uttered by people in positions of power, but such terms have become the staple of this week’s news diet, as the deepening of the euro crisis begins to make headlines about Greece look like they should be consigned to the “and finally” segment.
– President of the European Commission and Bilderberg luminary José Manuel Barroso last night warnedthat any break up of the eurozone would cause a continent-wide “depression,” shave 50 per cent off GDP and cost a million jobs in Germany alone.
– The UK Treasury and the Bank of England are making contingency plans for “economic armageddon”should the eurozone collapse. Business secretary Vince Cable said that Britain was was preparing for “all eventualities,” including the breakup of the euro.
– The Secretary-General of the Ibero-American Secretariat Enrique Iglesias warns that the crisis will “definitely” impact countries in Asia and Latin America, calling for preventive measures to protect against the “chain reaction” of a eurozone collapse.
– France and Germany are secretly plotting to cut their losses and create an entirely new eurozone absent problem countries in a last ditch effort to save the European project.
Whether such apocalyptic rhetoric is a ruse designed to concentrate more power into the hands of the EU as part of the drive towards a federal superstate remains to be seen. The fact that the euro currency itself has actually risen over the past 48 hours suggests that the collapse is by no means imminent.
We know that the agenda is to create a centralized European economicgovernment that would dictate decisions to all member states. Whether that takes the form of a newly stripped-down eurozone or whether it will come into being as a result of Brussels exploiting the current crisis to pose as saviors matters little – the goal remains the same.
Eurocrats are keen on exploiting the debt crisis in a bid to create a “United States of Europe” led by European Council presidentHerman van Rompuy, a move thatfrighteningly parallels plans by top Nazis, may of whom went on to found the EU, and their mission to build a continent-wide economic government.
For months, EU leaders have been fearmongering over the consequences of member states abandoning the single currency, warning that a euro collapse would lead to martial law and even civil war.
Their “solution” is to hand themselves even more power to create a common economic policy that all member states would be forced to follow at the expense of their national sovereignty, a de facto financial government for the whole of Europe.
Whatever the outcome, the fact remains that the euro single currency has been a miserable failure. Currency unions are only ever as strong as their weakest member. This completely undermines the case for a global currency, an idea that has been promoted frequently by globalists.
Back in June, top elitist and Harvard Professor Kenneth Rogoff wrote in the Financial Times that the collapse of the euro would put an end to the dream of multi-regional currencies like the Amero.
“The euro experiment has also brought us to a crossroads in the whole international monetary system,” warned Rogoff. “Will our grandchildren inherit a world with a huge number of national currencies, or a very small number of multi-country currencies?”
Since the single currency and the eurozone in general have exacerbated the threat posed by “too big to fail” countries like Greece and Italy, in turn menacing economic stability worldwide, we can only hope that the experiment of multi-regional power blocs and currencies, which we were told would provide security yet have ended up giving us the exact opposite, is consigned to the slag heap of history along with the failed euro.
Extreme Poverty Is Now At Record Levels …
Posted: November 13, 2011 Filed under: Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, Chapter 9, China, currency war Leave a commentAccording to the U.S. Census Bureau, a higher percentage of Americans is living in extreme povertythan they have ever measured before. In 2010, we were told that the economy was recovering, but the truth is that the number of the “very poor” soared to heights never seen previously. Back in 1993 and back in 2009, the rate of extreme poverty was just over 6 percent, and that represented the worst numbers on record. But in 2010, the rate of extreme poverty hit a whopping 6.7 percent. That means that one out of every 15 Americans is now considered to be “very poor”. For many people, this is all very confusing because their guts are telling them that things are getting worse and yet the mainstream media keeps telling them that everything is just fine. Hopefully this article will help people realize that the plight of the poorest of the poor continues to deteriorate all across the United States. In addition, hopefully this article will inspire many of you to lend a hand to those that are truly in need.
Tonight, there are more than 20 million Americans that are living in extreme poverty. This number increases a little bit more every single day. The following statistics that were mentioned in an article in The Daily Mail should be very sobering for all of us….
About 20.5 million Americans, or 6.7 percent of the U.S. population, make up the poorest poor, defined as those at 50 per cent or less of the official poverty level.Those living in deep poverty represent nearly half of the 46.2 million people scraping by below the poverty line. In 2010, the poorest poor meant an income of $5,570 or less for an individual and $11,157 for a family of four.That 6.7 percent share is the highest in the 35 years that the Census Bureau has maintained such records, surpassing previous highs in 2009 and 1993 of just over 6 percent.
Sadly, the wealthy and the poor are being increasingly segregated all over the nation. In some areas of the U.S. you would never even know that the economy was having trouble, and other areas resemble third world hellholes. In most U.S. cities today, there are the “good neighborhoods” and there are the “bad neighborhoods”.
According to a recent Bloomberg article, the “very poor” are increasingly being pushed into these “bad neighborhoods”….
At least 2.2 million more Americans, a 33 percent jump since 2000, live in neighborhoods where the poverty rate is 40 percent or higher, according to a study released today by the Washington-based Brookings Institution.
Of course they don’t have much of a choice. They can’t afford to live where most of the rest of us do.
Today, there are many Americans that openly look down on the poor, but that should never be the case. We should love the poor and want to see them lifted up to a better place. The truth is that with a few bad breaks any of us could end up in the ranks of the poor. Compassion is a virtue that all of us should seek to develop.
Not only that, but the less poor people and the less unemployed people we have, the better it is for our economy. When as many people as possible in a nation are working and doing something economically productive, that maximizes the level of true wealth that a nation is creating.
But today we are losing out on a massive amount of wealth. We have tens of millions of people that are sitting at home on their couches. Instead of creating something of economic value, the rest of us have to support them financially. That is not what any of us should want.
It is absolutely imperative that we get as many Americans back to work as possible. The more people that are doing something economically productive, the more wealth there will be for all of us.
That is why it is so alarming that the ranks of the “very poor” are increasing so dramatically. When the number of poor people goes up, the entire society suffers.
So just how bad are things right now?
The following are 19 statistics about the poor that will absolutely astound you….
#1 According to the U.S. Census Bureau, the percentage of “very poor” rose in 300 out of the 360 largest metropolitan areas during 2010.
#2 Last year, 2.6 million more Americans descended into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
#3 It isn’t just the ranks of the “very poor” that are rising. The number of those just considered to be “poor” is rapidly increasing as well. Back in the year 2000, 11.3% of all Americans were living in poverty. Today, 15.1% of all Americans are living in poverty.
#4 The poverty rate for children living in the United States increased to 22% in 2010.
#5 There are 314 counties in the United States where at least 30% of the children are facing food insecurity.
#6 In Washington D.C., the “child food insecurity rate” is 32.3%.
#7 More than 20 million U.S. children rely on school meal programs to keep from going hungry.
#8 One out of every six elderly Americans now lives below the federal poverty line.
#9 Today, there are over 45 million Americans on food stamps.
#11 In 2010, 42 percent of all single mothers in the United States were on food stamps.
#12 The number of Americans on food stamps has increased 74% since 2007.
#13 We are told that the economy is recovering, but the number of Americans on food stamps has grown by another 8 percent over the past year.
#14 Right now, one out of every four American children is on food stamps.
#15 It is being projected that approximately 50 percent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18.
#16 More than 50 million Americans are now on Medicaid. Back in 1965, only one out of every 50 Americans was on Medicaid. Today, approximately one out of every 6 Americans is on Medicaid.
#17 One out of every six Americans is now enrolled in at least one government anti-poverty program.
#18 The number of Americans that are going to food pantries and soup kitchens has increased by 46%since 2006.
#19 It is estimated that up to half a million children may currently be homeless in the United States.
Sadly, we don’t hear much about this on the nightly news, do we?
This is because the mainstream media is very tightly controlled.
I came across a beautiful illustration of this recently. If you do not believe that the news in America is scripted, just watch this video starting at the 1:15 mark. Conan O’Brien does a beautiful job of demonstrating how news anchors all over the United States are often repeating the exact same words.
So don’t rely on the mainstream media to tell you everything.
In this day and age, it is absolutely imperative that we all think for ourselves.
It is also absolutely imperative that we have compassion on our brothers and sisters.
Winter is coming up, and if you see someone that does not have a coat, don’t be afraid to offer to give them one.
All over the United States (and all around the world), there are orphans that are desperately hurting. As you celebrate the good things that you have during this time of the year, don’t forget to remember them.
We should not expect that “the government” will take care of everyone that is hurting.
The reality is that millions of people fall through the “safety net”.
Being generous and being compassionate are qualities that all of us should have.
Yes, times are going to get harder and an economic collapse is coming.
That just means that we should be more generous and more compassionate than we have ever been before.
We Are Now Looking Straight Into The Face Of A Great Depression …
Posted: November 10, 2011 Filed under: 2012, Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a commentSimon Johnson, former chief economist at the International Monetary Fund, said that “we are now looking straight into the face of a great depression”.
Greece faces the threat of bankruptcy within weeks after the EU said Wednesday night it would not provide any more funding to the beleaguered country unless it agreed to support the euro bail-out.
The Greek government is expected to be unable to pay wages for state workers and pensions next month without a planned injection of pounds 8?billion of EU cash.
George Papandreou, the Greek prime minister, met his French and German counterparts ahead of today’s G20 summit of world leaders.
Mr Papandreou has called a referendum on whether the Greek public supports the bail-out. The decision has plunged the rescue into turmoil.
David Cameron said that the world was facing a “financial storm” as Greece may now be forced out of the single currency.
Simon Johnson, former chief economist at the International Monetary Fund, said that “we are now looking straight into the face of a great depression”. Source (1) The Telegraph
Well, imagine that. There’s a recession and nobody knew aside from the unemployed, the newly unemployed, the world stock markets, the major jump in everything from soup to gold with more jumps on the way.
Everyone is announcing increases to something, somewhere but it has nothing to do with blue collar workers or their wages. Does anyone stop and consider that these increases and idiotic spending sprees have to come to an end as the Great Wall of Non Sustainability is fast approaching. This isn’t a guess, it’s coming a lot faster than our political boy wonders have assumed but yet they continue to throw money around without so much as a care as to who is going to pay the bill when it comes due. Interest rates are held ridiculously low; want to know why ?
The American, Canadian and most any other country you want to look at couldn’t afford a normal interest rate of 8 percent. Everyone wants everything but the credit cards are maxed out and it’s time to figure out how to get our financial houses in order before the house of cards folds in on us.
Why do analysts always talk about our economy like we’re just a bunch of pin-balls in a game with absolutely no control over which way we bounce?
Maybe it’s all just an illusion. Read this quote from the 1928 book Propaganda.
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible governmentwhich is the true ruling power of our country.” ~ Edward Bernays
I think our economic recovery will hinge on one of two things. Either the financial news starts instilling a bit of confidence in our economy, or people “take to the streets” and corporate America starts thinking for themselves.
The “better than expected” jobs and sales reports coming in lately, despite all the fear and pessimism being propagated in the markets, seem to indicate a lead to the the later.
We’re now into contraction of our world economy – however you want to define it with economist approved terms – due to resource scarcity. Most likely scenario predicted is extreme volatility resulting in short periods of growth followed by contraction, but resulting in net contraction. To extend the use the recent terminology: multiple dip recessions followed by depression.
The US economy is dead in the water for at least 10 if not 15 years.The rest of the world will wean itself away from dependence on their economy.There will be some pain globally but not as much as the pendingrevolution and possible splitting up of the US OF A
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15 Trillion Dollars In Debt, 45 Million Americans On Food Stamps And Zero Solutions On The Horizon …
Posted: November 10, 2011 Filed under: Ahmed Sajjad Hashemy, America, American imperialism, banking crisis, bankruptcy, banks, Barack Obama, Brawl, California, chaos, China, currency war, dollar collapse Leave a commentHow does a country end up 15 trillion dollars in debt? 30 years ago, we were just a little over a trillion dollars in debt. How in the world do supposedly rational people living in “the greatest nation on earth” allow themselves to commit national financial suicide by allowing government debt to explode like that? It almost seems like there should be some sort of official ceremony in Washington D.C. to commemorate this achievement. It really takes something special to be able to roll up 15 trillion dollars of debt. To get to this level, we really had to indulge in some wild spending. For example, did you know that the U.S. national debt grows by more than 2 million dollars every single minute? All of this debt has fueled an unprecedented boom of prosperity for the last 30 years, but now that prosperity is drying up. Today, there are over 45 million Americans that are on food stamps. America is being deindustrialized at a blinding pace and there are not nearly enough jobs for everyone. Poverty is exploding all over the nation, and millions of families have lost their homes to foreclosure. Unfortunately, there are zero solutions on the horizon. The leaders of both major political parties seem even more clueless right now than in past years. We really could use some hope, but hope is in very short supply.
When evaluating the health of America’s economy, it is important not to look at the short-term numbers. Rather, the key is to look at the long-term trends and the balance sheet numbers.
For example, if a mother and a father gave their teenage kids a bunch of credit cards and told them to go out and buy whatever they wanted, that would create a lot of “economic activity”, but it would also send that family to the poorhouse really quickly.
Well, we have basically done the same thing as a nation. We are drowning in debt, and all of this debt is going to destroy us financially.
Unfortunately, the federal government continues to spend money as if there was no tomorrow. Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.
When you are running up a credit card, it can be a lot of fun and it can seem like there aren’t any consequences.
But when it comes to debt, there are always consequences. The following is what former Republican Senator Alan Simpson (of the Simpson-Bowles Commission) recently had to say about the horrific debt crisis we are currently facing….
“It’s very simple. If you spend more than you earn, you lose your butt”
In the United States, we love to have the government spend money on all sorts of things, but we never want to pay for it.
So the debt just keeps piling up higher and higher.
A lot of Republicans say that spending on social programs has gotten out of control. A lot of Democrats say that spending on the military has gotten out of control.
They are both right. As I have written about previously, the U.S. military accounts for close to half of all the military spending in the world. In fact, U.S. military spending is greater than the military spending of the next 15 countries combined.
Yes, we will always need a very powerful military, but we can have one without going broke in the process.
But an even larger problem is our rampant spending on social programs.
The following comes from a recent article by Janet Tavakoli….
In 1950 spending for social programs was only one percent of the total Federal Budget. As the economy grew, social programs expanded to include Social Security, Medicare, Medicaid, Food Stamps,Unemployment Compensation, Supplemental Security for the Disabled, and educational programs. In 1983 as the United States pulled out of an ugly recession and brought inflation under control, social programs consumed 26% of the budget. In fiscal year 2012, they’ll eat up an estimated 57% of the budget.
Tens of millions of Americans have become absolutely addicted to government money. Nobody ever wants “their government benefits” to be cut, but nobody ever seems to want to have their taxes raised to pay for them.
To get a really good idea of how government transfer payments have absolutely skyrocketed over the years, just check out this chart.
Obviously, the course that we are on is not anywhere close to sustainable.
To say that the “war on poverty” was a failure would be a huge understatement.
The more money we seem to spend on social programs, the more that poverty seems to grow.
Right now, there are over 45 million Americans on food stamps. The economy is supposed to be “recovering”, but the number of Americans on food stamps has grown by over 8 percent in just the past year.
Food stamps are the modern equivalent of the old-fashioned bread lines. The federal government is now feeding an almost unbelievable number of Americans.
According to the Wall Street Journal, nearly 15 percent of all Americans are now on food stamps. That means that approximately one out of every seven Americans is dependent on the federal government for food.
That is not just a crisis – that is a total nightmare.
So what can be done?
Well, we certainly shouldn’t let our people starve in the streets.
But handouts should only be a temporary solution.
What these people really need are good jobs. Unfortunately, our “leaders” have created a business environment in this country that is incredibly toxic, and they have stood by as millions upon millions of good jobs have been shipped out of the country. That is one of the reasons why I write about the insane trade policies of the globalists over and over and over. The American people need to understand that globalizationis going to mean a continuing loss of jobs for this country and it is going to result in the destruction of themiddle class.
If we are not going to provide good jobs for American workers, then we are going to have to pay higher taxes in order to feed them and take care of them.
But what happens when the “safety net” breaks?
Even now, a lot of state and local governments all over the country are flat broke and they are cutting back on assistance for the poor.
The following is a brief excerpt from a recent article about this issue that was posted on the Fiscal Times….
For years, hundreds of thousands of people in dire straits – mentally or physically disabled, homeless and unemployed, ineligible for federal welfare, disability, or food subsidies – could generally count on state or local government largesse for modest handouts of cash to help scrape by. Under the rubric of “General Assistance,” these down-and-out Americans received modest payments – often no more than a few hundred dollars a month – to help defray the cost of necessities including rent, food, clothing, toilet paper, aspirin, phone cards, and bus tickets.
But in the midst of the worst recession of modern times and changing attitudes about the poor, many states have been gradually chipping away at general assistance programs or eliminating them altogether. Only 30 of 50 states currently offer any form of general assistance – down from 38 in 1989. And just this week, Washington State formally ended its “Disability Lifeline” program for an estimated 18,000 to 22,000 economically desperate residents.
Sadly, even more of us may be joining the ranks of the poor soon. The layoffs just keep on coming.
Normally, most major store closings do not happen until after the holiday season. You see, the reality is that most troubled retailers tend to want to bring in one more year of holiday sales before they finally shut the doors. If you announce store closings before the holidays, that is going to make holiday shoppers less likely to shop at those stores.
So that is why some of the recent store closing announcements have been so troubling.
For example, it just came out that all 46 Syms and Filene’s Basement stores are closing.
Also, Gap recently announced plans to close 189 stores in the United States.
So if this is what we are already seeing now, what is going to happen after the holidays?
That is a very good question.
So many jobs are being lost all around the nation. These days, there is massive competition for just about any job that is available.
People are getting desperate. They just want to be able to pay the bills and take care of their families.
The other day, thousands upon thousands of people lined up to apply for casino jobs in south Florida. Scenes like this are going to become even more frequent in the years ahead.
So do our politicians have any solutions?
Of course not.
The worst of the Republican candidates are actually at the top of the polls. The cold, hard truth is thatRomney, Cain and Perry are all clueless when it comes to the economy.
Of course you might as well call Barack Obama “Captain Clueless” when it comes to the economy. Obama keeps giving great speeches about jobs while at the same time signing more “free trade” agreements that will send thousands more businesses and millions more jobs out of the country. Even the CEOs onObama’s jobs creation panel are shipping huge numbers of jobs out of the United States.
Obama gave a speech in Washington D.C. today that exemplified his clueless approach to the economy. During the speech, Obama made the following statement….
“If Congress tells you they don’t have time, they got time to do it. We’ve been in the House of Representatives, what have you guys been debating? John, you’ve been debating a commemorative coin for baseball? You have legislation reaffirming that In God We Trust is our motto. That’s not putting people back to work. I trust in God, but God wants to see us help ourselves by putting people back to work”
First of all, Obama is not putting people back to work. He has been helping big corporations ship jobs out of the country at a record pace.
Secondly, how does he know what God wants?
A lot of people actually think that the phrase “God helps those who help themselves” is in the Bible.
But it isn’t.
A while after the Obama speech, White House Press Secretary Jay Carney made matters worse when he told reporters the following….
“I believe the phrase from the Bible is ‘The Lord helps those who help themselves”
But once again, there is no such verse in the Bible.
Okay, so quoting a “mystery verse” from the Bible is not that big of a thing at the end of the day, but this is yet another example of how the Obama administration just can’t seem to get anything right.
Look, everyone makes mistakes once in a while. I know that I certainly do.
But when you are wrong about almost everything almost all of the time, that is a major problem.
Especially when you are the president of the United States.
But both political parties are to blame for the mess that we are in. Budget deficits exploded during Republican administrations just like they have under the Democrats.
Both political parties are responsible for us being 15 trillion dollars in debt.
Both political parties are responsible for 45 million Americans being on food stamps.
Both political parties are responsible for the fact that there are not nearly enough good jobs.
If Barack Obama, Mitt Romney or Rick Perry is elected in 2012, we are just going to have more of the same.
America is running out of time. If we are going to change course, we need to do it immediately.
The borrower is the servant of the lender. We are enslaving ourselves and we are enslaving future American generations by going into so much debt.
Shame on the politicians that have rolled up so much debt in our name and shame on us for continuing to send those same politicians back to Washington D.C. time after time after time.
It is so sad to watch what is happening to America.
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