We Are Already In Depression (If Borrowing Money Is Not Income)

The data and chart comes from the Federal Reserve Economic Data base (FRED.) It is Gross domestic Product minus Treasury Debt. If you download them to a spread sheet GDP is expressed in billions so 1,000,000,000 is expressed as 1, while Federal Debt is expressed in millions so 1,000,000,000 is expressed as 1,000. That is why the chart is (Gross Domestic Product * 1000.)

 

Do you consider debt as income? Before you answer that, let’s perform a thought experiment. Imagine that you had taken a long cruise last fall and charged $10,000 to an American Express card. When you did your taxes this year, would have told the IRS that you had $10,000 income from American Express? Of course you wouldn’t. Suppose a major oil company issues $800 million worth of bonds to develop a new old field. Would the company report that as income to the stockholders or the IRS? Of course they wouldn’t. I am sure those sound like silly questions as the answer is a self evident “NO!” We do not consider borrowed money as income. It is a liability that must be paid back. Then why do we count Federal Government debt when measuring national income? I will leave speculation as to the “why” to the readers and focus on the fact that we do count new Treasury Debt as income. Continue reading

“Financial Crisis” Coming By End Of 2018 – Prepare Urgently

Source: Financial Times

 

“Financial Crisis Of Historic Proportions” Is “Bearing Down On Us”

John Mauldin of Mauldin Economics latest research note, Prepare for Turbulence, is excellent and a must read warning about the coming financial crisis. Mind refreshed from what sounds like a wonderful honeymoon and having had the time to read some books outside his “comfort zone” he has come to the conclusion that we are on the verge of  a “major financial crisis, if not later this year, then by the end of 2018 at the latest.” Continue reading

Russia and China Move to Dump the Dollar, Threatening the New World Order

 

As long predicted, the dollar’s dominance on the world’s economic stage is wavering and likely to completely collapse soon given the move away from the dollar by Russia, Iran, and China. 

Many have been predicting it. This writer spoke of it as early as 2004. The elite have dreaded it. It’s finally happened. The dollar is soon to be removed as the trading currency for oil and other commodities among Russia, Iran, and China. The effect on the U.S. economy will be catastrophic. However, in the long run it will serve to force the U.S. into a regional, rather than a global role. Continue reading

The Real Unemployment Number: 102 Million Working Age Americans Do Not Have A Job

 

Did you know that the number of working age Americans that do not have a job right now is far higher than it was during the worst moments of the last recession?  For example, in January 2009 92.6 million working age Americans did not have a job, but we just found out that in May the number of working age Americans without a job increased to just a shade under 102 million.  We’ll go over those numbers in more detail in a moment, but first I want to talk a bit about the difference between perception and reality.  According to the bureaucrats in the federal government, the “unemployment rate” in May was the lowest that we have seen in 16 years.  At just “4.3 percent”, we are essentially at “full employment”, and so according to them anyone that really wants a job should be able to find one pretty easily. Continue reading

The world economy can’t handle even one US rate hike, strategist Sri-Kumar says

Please see the source for the video.

 

Even one small interest rate increase by the Fed could have a sweeping impact on U.S. and world economies, Komal Sri-Kumar told CNBC on Monday.

“I think they are going to hike” on March 15, Sri-Kumar said on “Squawk Box,” echoing a theory shared by many analysts. “But that is going to prompt capital outflows from the euro zone, especially with the political risk. It is going to increase the capital outflow from China, and the U.S. economy will feel the impact.”

These moves would strengthen the dollar against other currencies, putting downward pressure on the euro, said Sri-Kumar, president of Sri-Kumar Global Strategies. Continue reading

China has cost US 3.4 million jobs, says think tank

A Chinese worker tests circuit boards at a factory in Sichuan province. Photo: AFP

 

Economic Policy Institute says the US-China trade relationship needs fundamental change to stop ‘unfair trade and illegal currency manipulation’

A lengthy report released last week by the Economic Policy Institute, a US think tank, lays bare the loss of American jobs to China, particularly in tech manufacturing. Continue reading

Iran Just Officially Ditched the Dollar in Major Blow to US: Here’s Why It Matters

It’s not oil that is America’s Achilles Heel, it’s the U.S. Dollar. It’s the global reserve currency and was given that status by trading the world’s lifeblood of economies: oil. Take away the Dollar in trading of oil and you can take down the entire house of cards, in this case the U.S. The last couple of times this move was made, Ghadafi and Saddam Hussein were killed.

People politicized and speculated it was over oil, but missed the mark. America has all the oil it could ever need in its own backyard but not always the support it needs to sustain its lifestyle via waning Dollar hegemony when nations are banding together.

 

 

(ANTIMEDIA) Following President Donald Trump’s ban on travelers from seven predominantly Muslim countries, the Iranian government announced it would stop using the U.S. dollar “as its currency of choice in its financial and foreign exchange reports,” the local Financial Tribune reported.

Iran governor Valiollah Seif’s central bank announced the decision in a television interview on January 29. The change will take effect on March 21, and it will impact all official financial and foreign exchange reports. Continue reading

IMF Boosts Growth Forecast for US, Cites Trump Impact

Please see the source for the video.

 

WASHINGTON (AP) — The International Monetary Fund on Monday raised its forecast for the U.S. economy over the next two years, saying President-elect Donald Trump’s policies should boost economic growth, particularly in 2018. But officials warned that if Trump’s protectionist trade proposals set off a trade war, that could be “quite destructive” for the global economy.

The IMF also increased 2017 growth projections for a number of other countries including China, Germany, Japan and Britain, but warned that the global economy faced a number of downside risks from rising protectionism to a jump in interest rates. Continue reading

China eyes ‘The Art of War’ as Trump signals battle on trade

There’s a Chinese saying that stems from the philosophy in Sun Tzu’s ancient text “The Art of War”: You can kill 1,000 enemies, but you would also lose 800 soldiers.

Centuries later, the proverb is suddenly apt again, being mentioned frequently in discussions around Beijing. Now, it highlights the potential damage U.S. President-elect Donald Trump could inflict if he makes good on his threat to start a trade war with China, the world’s second-biggest economy.

Having backed off some other campaign pledges, it’s unclear if Trump will end up slapping punitive tariffs on China — and Beijing has signaled some optimism he will be more pragmatic in office. Still, the message from China is that any move to tax Chinese imports would bring retaliation: The U.S. economy would take a hit and America would damage its long-standing ties with Asia. Continue reading

CREDIT CRUNCH TWO? Fears for US economy grow as credit card lending reaches 9-year high

The US economy grew far less than expected in the second quarter of 2016 taking the annualised rate to just 1.2 per cent – below expectations of 2.5 per cent.

At the same time, credit card and overdraft lending has soared to its highest level since 2007. Continue reading

IMF downgrades outlook for US economy

The International Monetary Fund is downgrading its forecast for the U.S. economy this year and says America should raise the minimum wage to help the poor and offer paid maternity leave to encourage more women to work.

Continue reading

Yellen Says Interest Rates Will Go Higher

Janet Yellen’s remarks today confused the people who think the world turns on the Jobs numbers since they remain clueless with respect to the changing trend in employment. They do not take into consideration the technology shift, so they are still trying to trade from 20th-century concepts. Yellen gave an outlook of the U.S. economy and said that interest rate hikes are coming. Higher rates are needed for pension funds, and the decision will cause the stock market to take off which will appear like asset inflation. Continue reading

47 Percent Of Americans Cannot Even Come Up With $400 To Cover An Emergency Room Visit

If you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere?  Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now.  And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something.  Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country.  If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth.  Unfortunately, about half of us are currently in that situation. Continue reading

Trump predicts ‘massive recession’

Republican presidential front-runner Donald Trump predicted that the United States is on course for a “very massive recession,” warning that a combination of high unemployment and an overvalued stock market had set the stage for another economic slump.

“I think we’re sitting on an economic bubble. A financial bubble,” the billionaire businessman said in an interview with The Washington Post published on Saturday.

Continue reading

China acquiring USA one company at a time

https://i0.wp.com/www.wnd.com/files/2016/03/whirlpool_logo.jpg

 

What’s the best way for a country like China to exert its influence over the U.S. economy? Acquire American-owned companies like Chinese-owned Haier just did when they purchased General Electric’s (GE) appliance business for $5.4 billion.

So much for American independence and authentic Independence Day celebrations on July 4th.

America can no longer claim to be an independent nation when our manufacturing base is under foreign ownership or foreign control. After all, ownership equals control, and control equals sovereignty. We lose our sovereignty as a nation when foreign companies buy our land, factories, and companies.

Continue reading