As Americans Rack Up Billions More On Their Credit Cards The U.S. Economy Is Coming Apart Like A 20 Dollar Suit
Published: Nov. 27, 2009 -The End of the World
As Americans run out today like chickens with their heads cut off and run up billions more on their credit cards, the vast majority of them have no concept of how bad things really are for the U.S. economy. The truth is that the very foundations of the United States financial system are coming apart like a 20 dollar suit. While the U.S. government and most of the mainstream media continue to wallow in denial, the numbers that you will read in this article simply do not lie. The United States has engaged in an orgy of debt for decades and now the day of reckoning has arrived.
But what else should we expect from a nation that is the third fattest in the world? The truth is that America has become a nation of gluttons who think that the good times will continue to roll. But the cold reality is that all of us are about to face the end of the financial world as we know it.
The American consumer is tapped out. The total number of bankruptcies filed in the third quarter in the United States surged 33%. The seemingly endless ability of the American consumer to spend and spend powered the global economic engine for years, but now the party is over.
Why doesn’t the American consumer have anything to spend? Well, one factor is certainly that American consumers have gone so far into debt that there is just not much more room for more.
But also, the truth is that the United States is experiencing a massive epidemic of unemployment. In fact, CNBC is reporting that the real jobless rate in the United States is 17.5 percent.
That is nearly one out of every five workers.
They can’t find work. The work simply is not there. For years and years U.S. corporations shipped jobs overseas while the U.S. government encouraged it. Those jobs are not going to come back. Those who still do have jobs are finding their incomes increasingly stretched as their dollars buy less than they did before.
Some U.S. citizens are now so desperate for work that they are heading over to street corners and home improvement store parking lots to find day-labor work usually done by illegal immigrants.
If you do not understand just how explosive the growth in unemployment has been over the past two years, we would encourage you to view this startling animated map which shows the stunning growth of unemployment in the United States.
So will things pick up soon?
Well, the FDIC is reporting the biggest drop in business loans on record. That is really bad news for job seekers. You see, most companies in the U.S. are extremely dependent on debt to fund their operations. It will be extremely difficult for the vast majority of U.S. businesses to expand their businesses and hire more workers if they can’t borrow money.
Meanwhile, mortgage lenders are also decreasing the flow of credit. Fannie Mae has announced plans to raise minimum credit score requirements and limit the amount of overall debt that borrowers can carry relative to their incomes.
Do you understand what that means?
That means that less people will qualify for home loans.
That means less buyers for residential real estate.
If there are less buyers for homes that means that housing prices will go down.
In fact, they could go down a lot.
The Standard & Poor’s/Case-Shiller home price index has risen 5% from the April low, but the index is still predicting a massive 45% fall in home prices from today’s values.
A 45 percent decrease.
How will you feel if the value of your home goes down 45 percent?
Already, almost one out of every four U.S. homeowners owe more on their mortgages than the properties are worth.
Are you starting to get the picture?
So who is going to come to the rescue?
The U.S. government?
Well, House Speaker Nancy Pelosi is openly saying that Americans will be willing to ”absorb” higher deficits in exchange for more jobs.
Indeed, as we speak Congress is reportedly scrambling to write “Economic Jobs Stimulus 3.0″.
Just what we need, eh?
Another stimulus bill?
After all, since the U.S. government has already put our children and grandchildren trillions of dollars into debt, what are a few trillion more?
How much money can the U.S. government possibly spend anyway?
Well, the U.S. federal government spent 3.5 trillion dollars during Barack Obama’s first year in the White House. That far exceeds the spending for any other first-year president.
So is this money being spent wisely?
Of course not.
For example, the Pentagon has just awarded a $5,760,000 contract for men’s undershirts.
Also, the U.S. government is reportedly spending 2.6 million U.S. tax dollars to train Chinese prostitutes to drink responsibly on the job.
This is our money that is being spent.
The truth is that the debt of the U.S. government is spiraling out of control as the following chart reveals…..
All of this debt and borrowing is going to destroy the value of the American dollar. By pumping billions upon billions of new dollars into the U.S. economy, the value of all existing dollars will be devastated.
The next chart shows the growth of the U.S. money supply. In particular, pay attention to the very end of the chart where it shows how the growth of our money supply is absolutely exploding in 2009…..
So what will all of this money do? It will destroy the value of all current dollars. Inflation is going to go absolutely wild. In fact, gold prices hit record highs above $1,190 an ounce last week as the dollar sharply declined.
But that is just the beginning.
What we are facing is the end of the world as we know it as far as the U.S. financial system is concerned.
The good days are over.
A financial apocalypse of unprecedented magnitude is on the way, but most Americans remain blissfully ignorant of this reality. They will be caught totally unprepared by what is coming.
Don’t let that happen to you.