CDZ Is US heading for a financial cliff?

[ralfy]

More like Reaganomics, as total debt started rising significantly during the early '80s. Every administration that followed relied on the same consumer spending economy coupled with military spending to keep the petrodollar propped up.

 

[auditor0007]

National debt is over $18 trillion. Couldn't pay off even a $1 trillion debt. And our own money is imaginary since it isn't actually based on anything of value. It's based on happy thoughts and fairy dust.

We're not heading for a cliff, we're already on the edge of it doing a remarkable balancing act.

No, it's not based on fairy dust and happy thoughts. It is based on the value of the products and services produced every year. Those all have value. You can remove money from the equation, and the value remains.

 

[ralfy]

National debt is over $18 trillion. Couldn't pay off even a $1 trillion debt. And our own money is imaginary since it isn't actually based on anything of value. It's based on happy thoughts and fairy dust.

We're not heading for a cliff, we're already on the edge of it doing a remarkable balancing act.

No, it's not based on fairy dust and happy thoughts. It is based on the value of the products and services produced every year. Those all have value. You can remove money from the equation, and the value remains.

From what I know, public debt is higher than GDP. That debt also does not include unfunded liabilities, etc.

 

[auditor0007]

National debt is over $18 trillion. Couldn't pay off even a $1 trillion debt. And our own money is imaginary since it isn't actually based on anything of value. It's based on happy thoughts and fairy dust.

We're not heading for a cliff, we're already on the edge of it doing a remarkable balancing act.

No, it's not based on fairy dust and happy thoughts. It is based on the value of the products and services produced every year. Those all have value. You can remove money from the equation, and the value remains.

From what I know, public debt is higher than GDP. That debt also does not include unfunded liabilities, etc.

Most homeowners have debt higher than their yearly income. The US is not in some dire situation about to go bankrupt. The thing that most everyone forgets is that the federal government has assets as well as liabilities. While current debt is around $18 trillion, current assets are worth approximately $130 trillion. The federal government also has the ability to raise taxes and increase revenue substantially if it ever became absolutely necessary.

 

[katsung47]

Greenspan warns: There will be a “significant market event… something big is going to happen”

US is heading for a cliff?

February 23, 2015

By Mac Slavo | SHTFPlan

With the Federal Reserve printing trillions upon trillions of dollars to keep the economic system afloat, many investors and financial pundits have surmised that the fundamental economic problems facing the United States during the crash of 2008 have been resolved. Stocks are, after all, at historic highs.
According to Lundin, the former Fed chairman made it clear that the central bank is facing a serious problem and one that will have significant ramifications in the future.
https://www.intellihub.com/federal-reserve-insider-alan-greenspan-warns-there-will-be-a-significant-market-event-something-big-is-going-to-happen/

I'm not going to worry too much about what Greenspan has to say. He was the most important player leading to the crash of 2008. He did more than anyone to create the real estate bubble and bust. As for his analysis, he is forgetting the fact that the dollar has been steadily gaining strength against all foreign currencies as is much stronger today than it was six years ago. His concerns would carry much more weight if the the rest of the global economy was in much better shape, but the fact is that the US economy is one of the strongest and the strongest of all the top economies in the world today.

 

[katsung47]

Media say US economy is good, is it just a lie?
U.S. Economy Appears To Be Headed For The Cliff
February 24, 2015

This is an excellent graphic portrayal of the current situation in the U.S. economy. “U.S. Macro” is an index compiled by Bloomberg which measures the difference between the economic data as reported vs. the consensus estimates for that data (click to enlarge):

By now I think almost everyone knows that the Fed has been pushing the stock market inexorably higher on a sea tide of printed money. I think everyone understands that history has shown that market interventions always fail. When the stock market intervention fails, it will trigger a collapse that will likely make the 1929 crash look tame…
http://investmentresearchdynamics.com/u-s-economy-appears-to-be-headed-for-the-cliff/

 

[Donald Polish]

System is to rot unfortunately.
This is not a financial problem. It is a criminal abuse and identity theft problem. The money issues are just a biproduct of something much larger.
Revise the whole structure, find defective element and get rid of it.

 

[Andylusion]

National debt is over $18 trillion. Couldn't pay off even a $1 trillion debt. And our own money is imaginary since it isn't actually based on anything of value. It's based on happy thoughts and fairy dust.

We're not heading for a cliff, we're already on the edge of it doing a remarkable balancing act.

No, it's not based on fairy dust and happy thoughts. It is based on the value of the products and services produced every year. Those all have value. You can remove money from the equation, and the value remains.

From what I know, public debt is higher than GDP. That debt also does not include unfunded liabilities, etc.

Most homeowners have debt higher than their yearly income. The US is not in some dire situation about to go bankrupt. The thing that most everyone forgets is that the federal government has assets as well as liabilities. While current debt is around $18 trillion, current assets are worth approximately $130 trillion. The federal government also has the ability to raise taxes and increase revenue substantially if it ever became absolutely necessary.

While all true, I'm more worried about the political will, and the societal acceptance, than the fundamental dollar amounts. The fact it required 40+ years to drill in ANWR, even after we knew the oil was there, suggests that government may not do what they need to do.

 

[katsung47]

The only bright spot for US economy was the shale oil industry, but since the oil price plunge,

Oil layoffs hit 100,000 and counting
By Dan MolinskiApril 15, 2015 9:34 AM
http://finance.yahoo.com/news/oil-layoffs-hit-100-000-235500810.html

 

[katsung47]

Major U.S. Retailers Are Closing More Than 6,000 Stores
By Michael Snyder, on May 1st, 2015

If the U.S. economy really is improving, then why are big U.S. retailers permanently shutting down thousands of stores? The “retail apocalypse” that I have written about so frequently appears to be accelerating. As you will see below, major U.S. retailers have announced that they are closing more than 6,000 locations, but economic conditions in this country are still fairly stable. So if this is happening already, what are things going to look like once the next recession strikes? For a long time, I have been pointing to 2015 as a major “turning point” for the U.S. economy, and I still feel that way.

Major U.S. Retailers Are Closing More Than 6 000 Stores

 

[Josf]

"So if this is happening already, what are things going to look like once the next recession strikes? For a long time, I have been pointing to 2015 as a major “turning point” for the U.S. economy, and I still feel that way."

When the so called collapse (or slow burn) of the criminal banking cartel follows through to the inevitable conclusion there are possible extremes that may happen that are either good for most people on one extreme and bad for most people on the other extreme.

If that range from good for most people to bad for most people can be illustrated somehow, so as to see the boundaries of the future possibilities, then the future will be, at least, viewable, rather than hidden from view.

How about the worst case scenario on one end, and then work on the best case scenario on the other end, and then it might be possible to begin communicating a more likely scenario somewhere in between the two extremes.

Hyperinflation, followed by world war, followed by the former Word Reserve Currency removed from power while a new, worse, power replaces the former. That can include any form of War Debt Collection process that is not unfamiliar in human history.

A new age of competition in money markets, whereby the consumers are offered a choice of many high, higher, and as far as each individual consumer is concerned highest quality money, for the least cost to the consumer, which then drives those who offer competitive money supplies to the world money market to increase quality and lower cost to the consumer or failing to do so that competitor will lose market share to those who are able to increase quality and lower cost to the consumers.

If corporate monopoly (or criminally financed or "subsidized") "businesses" are failing, closing stores, then either their products are no longer economically viable or some other explanation explains why their power plug is being pulled. If their products are economically viable then there is opportunity for those in command of the capacity to produce those economically viable products.

Example ideas along these lines is here:
Benjamin Tucker - State Socialism and Anarchism

"First in the importance of its evil influence they considered the money monopoly, which consists of the privilege given by the government to certain individuals, or to individuals holding certain kinds of property, of issuing the circulating medium, a privilege which is now enforced in this country by a national tax of ten per cent., upon all other persons who attempt to furnish a circulating medium, and by State laws making it a criminal offense to issue notes as currency. It is claimed that the holders of this privilege control the rate of interest, the rate of rent of houses and buildings, and the prices of goods, – the first directly, and the second and third indirectly. For, say Proudhon and Warren, if the business of banking were made free to all, more and more persons would enter into it until the competition should become sharp enough to reduce the price of lending money to the labor cost, which statistics show to be less than three-fourths of once per cent. In that case the thousands of people who are now deterred from going into business by the ruinously high rates which they must pay for capital with which to start and carry on business will find their difficulties removed. If they have property which they do not desire to convert into money by sale, a bank will take it as collateral for a loan of a certain proportion of its market value at less than one per cent. discount. If they have no property, but are industrious, honest, and capable, they will generally be able to get their individual notes endorsed by a sufficient number of known and solvent parties; and on such business paper they will be able to get a loan at a bank on similarly favorable terms. Thus interest will fall at a blow. The banks will really not be lending capital at all, but will be doing business on the capital of their customers, the business consisting in an exchange of the known and widely available credits of the banks for the unknown and unavailable, but equality good, credits of the customers and a charge therefor of less than one per cent., not as interest for the use of capital, but as pay for the labor of running the banks. This facility of acquiring capital will give an unheard of impetus to business, and consequently create an unprecedented demand for labor, – a demand which will always be in excess of the supply, directly to the contrary of the present condition of the labor market. Then will be seen an exemplification of the words of Richard Cobden that, when two laborers are after one employer, wages fall, but when two employers are after one laborer, wages rise. Labor will then be in a position to dictate its wages, and will thus secure its natural wage, its entire product. Thus the same blow that strikes interest down will send wages up. But this is not all. Down will go profits also. For merchants, instead of buying at high prices on credit, will borrow money of the banks at less than one per cent., buy at low prices for cash, and correspondingly reduce the prices of their goods to their customers. And with the rest will go house-rent. For no one who can borrow capital at one per cent. with which to build a house of his own will consent to pay rent to a landlord at a higher rate than that. Such is the vast claim made by Proudhon and Warren as to the results of the simple abolition of the money monopoly."

And here:
The W rgl Experiment Austria 1932-1933 Currency Solutions for a Wiser World

"Wörgl’s demonstration was so successful that it was replicated, first in the neighboring city of Kirchbichl in January of 1933. In June of that year, Unterguggenberger addressed a meeting with representatives of 170 other towns and villages. Soon afterwards 200 townships in Austria wanted to copy it. It was at that point that the central bank panicked and decided to assert its monopoly rights. The people sued the central bank, but lost the case in November 1933. The case went to the Austrian Supreme Court, but was lost again. After that it became a criminal offence in Austria to issue “emergency currency.”"

Another source of information along these lines comes from an individual named Catherin Austin Fitts who explains something called The Breakaway Civilization.

 

[Andylusion]

Major U.S. Retailers Are Closing More Than 6,000 Stores
By Michael Snyder, on May 1st, 2015

If the U.S. economy really is improving, then why are big U.S. retailers permanently shutting down thousands of stores? The “retail apocalypse” that I have written about so frequently appears to be accelerating. As you will see below, major U.S. retailers have announced that they are closing more than 6,000 locations, but economic conditions in this country are still fairly stable. So if this is happening already, what are things going to look like once the next recession strikes? For a long time, I have been pointing to 2015 as a major “turning point” for the U.S. economy, and I still feel that way.

Major U.S. Retailers Are Closing More Than 6 000 Stores

Well for one thing, we increased the minimum wage. Retail stores make extremely low margins. Last I checked, Walmart had a 3% profit margin. That means they only earn 3¢ for every dollar of goods you buy.

With such a low profit margin, and with labor costs being jacked up by health insurance mandates, and other government regulations and controls....... Not to mention people screaming about you in the press...

Yeah, it doesn't surprise me that many retailers are pulling the plug. All those minimum wage workers, ending up with an income of zero.... yeah. Good job minimum wage and Obama Care advocates. Well done.

In addition, there is a fundamental shift in the economy. Short of buying a $10 keyboard from walmart, I have not purchased replacement computer parts from a retail store for over 10 years. If I want something, I get it from NewEgg. I'm sure most of my generation will routinely buy from online stores instead of retail stores.

Which of course, the minimum wage massively benefits online stores over retail stores, since they don't have to foot that bill.

 

[ScienceRocks]

If we cut, slash and burn..I'd say certainly.

We need to build up the economy.

 

[Judicial review]

If we cut, slash and burn..I'd say certainly.

We need to build up the economy.

Then Pray John Kasich wins the Presidency. He will also be all for funding space btw..

 

[usfan]

I think the signs of collapse are there, if we open our eyes.
1. Massive QEs. Fiat currency is bad enough, but with the massive QEs, all it does is dilute the real wealth of the nation.
2. Dwindling production. Not the phony gdp numbers that are based on ponzi parameters, but real production.. manufacturing, farming, building. Money shuffling does not increase wealth in the nation.
3. Trade deficit. Since the 70s, the us has been negative & growing in our trade deficit. More dollars flow out than are coming in. This is a recipe for a crash. It is exporting our wealth. Even if masked with QEs & other money shuffling smoke & mirrors, the reality of what a trade deficit does to a nation, over decades, is historically clear.
4. Massive public debt. This bubble is huge. it is beyond what we can pay back, except through hyper inflation.
5. Pretending that fiscal solvency is unimportant. This is the biggest lie by pseudo economists. History always punishes those who think they can fool with the currency & pretend that numbers don't matter.

 

[Josf]

1. Massive QEs

The First Bank of the Counterfeit United States of America was the first example of fraudulent banking on a fraudulent (color of law) national scale. Calling fraud any name other than fraud is giving credit to the criminals who invent such lies.

2. Dwindling production

As explained very well by Benjamin Tucker, and many others, the fraudulent natural banking cartel dwindles production as a rule enforced criminally. The direct result of dwindling production is something euphemistically (fraud) called "minimum wage," which entails another euphemism (fraud) called "government subsidy," as the productive capacity that would increase opportunities to then balance the demand for opportunities to be in-line with the supply, creating two opportunities for everyone demanding one opportunity, which is euphemistically called "leverage," as the so called "laborer" would be in a freed market where each so called "employer" would be bidding higher bids to win the competition to connect to the scarce supply of so called "laborers." Call in the union of free market money competitors intending these specific consequences honestly in the open market of ideas, or call it anything you want.

3. Trade deficit.

This is a very interesting topic as it was one of the pivotal topics for discussion at the time the criminals took over American in 1787 through to 1789 and onward. The concept of import tax versus export tax, which can harm everyone in two separate areas where said taxes can be enforced is relatively less harmful for one set of people at the expense of another set of people, giving rise to the idea, and practice, called trade war. Those against the criminal take-over of America were against affording a Federal level power of government the power to tax exports, while they were in favor of taxing imports, such as the importing of people as if people were slaves. The modern definition of trade deficit is complicated on purpose, so as to create those in the know, and those kept in the dark, so as to ensure that those in the know keep their power, leverage, knowledge advantage, power advantage, over everyone not privileged within the inner sanctified circle of movers and shakers, an example can be shown easily with the continued attempts to audit the so called Federal Reserve accounts.

4. Massive Fraudulent Debt

The ubiquitous use of two words Public and Private ought to be understood before giving any credit to the concept known as National Debt.

5. Pretending that fiscal solvency is unimportant.

Pretending that the criminals who took over rule of law (in 1787) were lawful, and pretending that the current batch of criminals who have taken over rule of law are lawful, is the first step in pretending that those same criminals have any intention of allowing the victims to know precisely what is on their criminal ledgers.

 

[HR Pufnstuf]

Greenspan warns: There will be a “significant market event… something big is going to happen”

US is heading for a cliff?

February 23, 2015

By Mac Slavo | SHTFPlan

With the Federal Reserve printing trillions upon trillions of dollars to keep the economic system afloat, many investors and financial pundits have surmised that the fundamental economic problems facing the United States during the crash of 2008 have been resolved. Stocks are, after all, at historic highs.
According to Lundin, the former Fed chairman made it clear that the central bank is facing a serious problem and one that will have significant ramifications in the future.
https://www.intellihub.com/federal-reserve-insider-alan-greenspan-warns-there-will-be-a-significant-market-event-something-big-is-going-to-happen/

You can expect more inflation, a stock crash near year end, and something worse by 2017 when the dollar stops being the default reserve currency.

Ah ... the sky is falling. I've been hearing the doom and gloom predictions for 5 years. I take it you missed the 150% market gains since 2009. Too bad for you.

The stock market performance is not necessarily indicative of the nation's overall economic performance. To truly see how well the economy is doing one must look at variables such as national debt vs. GDP. Factory orders for long-term hard goods. Inventory levels and trade imbalances. One must consider actual employment including the long time and chronically unemployed. Further one needs to consider dollar devaluation because of how much currency is being pumped into the economy and the inflation of prices that this is causing. Equally important is the amount of unsecured debt held by each American because as this increases at acts as additional currency further exacerbating dollar devaluation and inflation. Finally one must consider the median age of the average worker because as our population continues to age and birthrates of probable workers decline there are far fewer workers available. Without population growth within the working demographics there can be no economic growth.

 

[SAYIT]

Greenspan warns: There will be a “significant market event… something big is going to happen”

US is heading for a cliff?

February 23, 2015

By Mac Slavo | SHTFPlan

With the Federal Reserve printing trillions upon trillions of dollars to keep the economic system afloat, many investors and financial pundits have surmised that the fundamental economic problems facing the United States during the crash of 2008 have been resolved. Stocks are, after all, at historic highs.
According to Lundin, the former Fed chairman made it clear that the central bank is facing a serious problem and one that will have significant ramifications in the future.
https://www.intellihub.com/federal-reserve-insider-alan-greenspan-warns-there-will-be-a-significant-market-event-something-big-is-going-to-happen/

You can expect more inflation, a stock crash near year end, and something worse by 2017 when the dollar stops being the default reserve currency.

Ah ... the sky is falling. I've been hearing the doom and gloom predictions for 5 years. I take it you missed the 150% market gains since 2009. Too bad for you.

The stock market performance is not necessarily indicative of the nation's overall economic performance. To truly see how well the economy is doing one must look at variables such as national debt vs. GDP. Factory orders for long-term hard goods. Inventory levels and trade imbalances. One must consider actual employment including the long time and chronically unemployed. Further one needs to consider dollar devaluation because of how much currency is being pumped into the economy and the inflation of prices that this is causing. Equally important is the amount of unsecured debt held by each American because as this increases at acts as additional currency further exacerbating dollar devaluation and inflation. Finally one must consider the median age of the average worker because as our population continues to age and birthrates of probable workers decline there are far fewer workers available. Without population growth within the working demographics there can be no economic growth.

And those who see the glass as half full have been putting their money where their mouths are, running up the indices by buying stocks. True, some of that is late baby-boomer retirement saving but lots of smart money has been betting on America's future.
Did you miss out on the historic 6 year long bull market? Dow Jones average up 11,564 points from 6627 to 18191. Nice!

 

[HR Pufnstuf]

It is not about seeing the glass as half full or half empty, it is about seeing the whole glass. You keep talking about how the Dow closed up by 6627 but of the 30 companies that comprise the Dow Index only 17 turned a profit and most of those in single digit percentages. However several heavy hitter stocks such as American Express, Intel and Proctor and Gamble, which are also in the Dow 30, lost more 10% of their value today. Moreover the Dow is only up 1.33% year to date which does not even match the rate of inflation. As a long term investor I see the market highly overvalued and expect a major correction to happen this year. The issue with that is many publicly traded companies lack the cash reserves to withstand a major downward correction and the post correction lull. Further, the FED is under incredible pressure to begin raising interest rates. Any upward movement in the interest rate will bring to an end this anemic and flat "recovery". Couple that with China's worsening economy, our growing national debt and high unemployment rates and the question goes from will there be a market correction to when will there be a market correction. I hope this helps you to realize that stock exchange averages were never meant to be read like baseball scores. Also, realize that while the glass is half full there is always a huge hole at the top for it all to pour out of.

Dow 30 Companies - CNNMoney

 

[SAYIT]

It is not about seeing the glass as half full or half empty, it is about seeing the whole glass. You keep talking about how the Dow closed up by 6627 but of the 30 companies that comprise the Dow Index only 17 turned a profit and most of those in single digit percentages. However several heavy hitter stocks such as American Express, Intel and Proctor and Gamble, which are also in the Dow 30, lost more 10% of their value today. Moreover the Dow is only up 1.33% year to date which does not even match the rate of inflation. As a long term investor I see the market highly overvalued and expect a major correction to happen this year. The issue with that is many publicly traded companies lack the cash reserves to withstand a major downward correction and the post correction lull. Further, the FED is under incredible pressure to begin raising interest rates. Any upward movement in the interest rate will bring to an end this anemic and flat "recovery". Couple that with China's worsening economy, our growing national debt and high unemployment rates and the question goes from will there be a market correction to when will there be a market correction. I hope this helps you to realize that stock exchange averages were never meant to be read like baseball scores. Also, realize that while the glass is half full there is always a huge hole at the top for it all to pour out of.

Dow 30 Companies - CNNMoney

The Dow is not up 6627 points in this now 6 year long bull market but rather 11,564 points from 6627 to 18191 and while that is not an indicator of future movement, it does represent an increase of 175% for those who have ridden it out. You may be right that a correction is due but cherry-picking a few laggards does not mean the increase is not broadly based.
The S&P 500, for instance, rose from 683 in 2009 to its current 2117 ... a rise of 1434 points or - drum roll, please - just over 200%.
Just so you know, I began selling off 10% of my stock holdings each month as I too see little chance of the advance continuing and I as a retired guy (2012) I'm in need of some security.