Posted on 06/28/2013 7:26:10 PM PDT by Kartographer
Look around and you can’t miss it.
The world is on the brink… politically, economically, financially, monetarily, and militarily.
Events are accelerating. Over the last decade trend forecaster Gerald Celente has been blaring the alarms.
If you’ve been paying attention, then you’ve heard them. You know we’re going under.
And this time they’re not going to be able to stop it.
(Excerpt) Read more at shtfplan.com ...
The difference between then and now is debt. Household debt today is 3x what it was in 1946 - the last and the only date in which conditions were at all similar.
Not only is the federal government in as much debt as they were in 1946 and 1947 - so are state governments and local governments. Total debt is up about 50 percent from 1946-7.
The response of the Truman government was to cut back the size of the debt and spending by around 50 percent, slashing the heavy war debt and getting the government on the right footing.
The other problem is this - look at the demographics. We are not only seeing the destruction of the current workforce (especially among those under the age of 50), we are seeing historic lows for the overall employment for this sector.
We haven’t even seen yet when the Boomers start to retire (as they have been for the last 2,3 years. The youngest Boomers are now hitting their peak earning years.
Basically, if you aren’t a boomer, this economy is going to **** you over.
Entitlement growth alone, is projected to consume 100 percent of total US revenues by 2030. This doesn’t include any spending on national defense whatsoever. Entitlements already cover 2/3rds of the entire American expenditures, and rising very rapidly.
This would, unless we see serious cutbacks around 30 percent deficits at this point. At present, under the O regime, we are looking at deficits of around 1.5 trillion dollars off revenues of about 4 trillion dollars. That’s close to almost 30 percent overspending now.
This - bluntly - cannot continue without interest rates on US T-Bills increasing.
We have seen the first move towards a higher t-bill regime with interest rates climbing from 1.5 percent to 2.5 percent. Now this might not seem like much, but this is just the beginning.
When the demographic effects start to bite (and they haven’t yet done so), what then? We are right on the cusp of this.
Who’s going to earn the money needed to pay for boomer pensions when the ratio is 1:1 or even worse, given the terrible employment numbers?
Yeah I do. I have no debt either.
http://www.zerohedge.com/news/2013-04-26/total-us-debt-gdp-105
What do you make of this?
This is after the 5 percent ‘adjustment’ that they did to cook the books, btw. It marks the highest Debt to GDP since 1945.
The war got as high as 129 percent in 1946, which is the current all-time record.
Greece has interest rates of 10+ percent.
Does this mean that the Greek economy is doing much better than the US economy?
Yes, and it’s not just that money had to go somewhere. It’s the devaluation of the dollar. The stock price goes up because of the devaluation.
Just like peanut butter used to cost $1.00, and now costs $2.00. So it takes more dollars to buy the same amount of stock.
It seems from what I read that the activity you see as signs of a recovering economy is for the most part built on the Fed’s Quantitative Easing, Stimulus or whatever they are currently calling the funny money being created out of thin air by Bernanke.
Just the mention that the Fed might someday slow down its creation of fiat currency caused a huge panic in the stock market recently.
Of course home prices are up. All of the really low end bargains have been snatched up. If home prices are up 12% that is only after they dropped 50% to 60% or more.
In my area, one of the hardest hit, most of the homes being bought are still from the foreclosure backlog. Most are being bought by large investors and converted to rentals or just being held as investments. This information is from a recent newspaper article analyzing the local housing market.
The sad truth is that the economy is still being proped up by the infusion of money from the Fed and would collapse overnight if the Fed just stopped.
And one way or another, it will have to stop someday.
“it will have to stop someday.”
Debt to GDP is now 105 percent. Highest it’s been since 1945.
Obama has jumped it from 65 to 105 in just 4 years. Projecting the end of the Obama years would put the US at 145 percent debt, the highest level ever.
So the ride will stop - but it doesn’t have to stop during Obama’s term. Default won’t likely happen in the next 3 years, but may by 2020.
On what planet does Fed Money have the first thing to do with oilfield fracking?!
Then you aren't grasping the modern era.
No one in the oilpatch is deciding to drill or frack a new well based on whether or not the U.S. is in a federal budget Sequester or not.
Unemployed slackers do not determine economic growth.
I explained that fact in post #24. PAY ATTENTION!
Here's the remedial recap: women entered the workforce en masse back in the 1970's.
The two-earner family was an anomaly.
The current trend is reversing that. You will see *both* economic growth and rising unemployment as that anomaly is corrected.
Key Point: 1-earner family units in the future. This might not be male-dominated, either. Single moms working and stay at home, yet married dads.
Debt may have been higher than that at the end of the Civil War. By the 1870's you had railroad "Robber Barons" and an economic boom.
How did the economy do likewise after WW2?
No, you’re not grasping the modern era.
“In 1960, U.S. government transfers to individuals totaled about $24 billion in current dollars, according to the Bureau of Economic Analysis. By 2010 that total was almost 100 times as large. Even after adjusting for inflation and population growth, entitlement transfers to individuals have grown 727% over the past half-century, rising at an average rate of about 4% a year.”
In 1960, the US population was 180 million people. With 24 billion dollars in government transfers, this means that the average person received 133 dollars a year. About the price of a dryer for every man woman and child in America.
Today, that amount would be the equivalent of 1000 dollars then, or in today’s dollars, the equivalent would be 7,869 dollars.
That’s not just per household. That’s per person.
That’s the equivalent of 38 weeks of work at minimum wage working 30 hours a week.
America has a serious entitlement problem, when benefits allocated per person approach part-time wages for an entire year. It works out to about 50 percent of fulltime minimum wages.
“How did the economy do likewise after WW2?”
Truman cut government spending by 50 percent in 1947, and the ratio returned to normal by the 50s.
Do you expect Obama to do the same thing Truman did? I don’t.
Goodness, with all of the “crushing” debt, we must be less prosperous today than say, 1940, right?!
“The two-earner family was an anomaly.
The current trend is reversing that. You will see *both* economic growth and rising unemployment as that anomaly is corrected.
Key Point: 1-earner family units in the future. This might not be male-dominated, either. Single moms working and stay at home, yet married dads.”
40 percent of all American children are born out of wedlock today. This compares with 5 percent in 1965, and about 2 percent back in the 50s.
If you, as a single mother, can make 15k a year, every year, without fail, why marry? That’s the exact same amount as a minimum wage single earner family will earn working minimum wage full time for the entire year.
It’s very, very doubtful that you’ll see this arrangment. Maybe in 5 percent of the cases. What you will see in 95 percent of these examples unmarried men, and women, and single women with children.
We’re not passed the 50 percent mark yet, but give it another few years and you will.
Real wages for men are the same today as they were in 1957.
My Grandfather made more money than I ever have.
The men make a little bit more money today then they did in 1947, yes. But by 1958, the men made more back then than they do today.
How do wages for women and minorities compare today to 1957?
...you know, that whole “modern era” thing...
I'm unconvinced that hints at a "Great Depression" looming!
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