Submitted by Bob P.
Why are people around the world unable to withdraw money from their banks? Are we in for a “bail-in,” meaning banks “borrow” from citizens to bail themselves out? It is not unprecedented. It has happened in more than 11 countries in recent years and very well could be coming in the U.S. and Europe.
Via Mercola
In this video, I interview Edward Dowd, a hedge fund “guru”1 and former equity portfolio manager for BlackRock, one of the two largest asset managers in the world, Vanguard being the other. Over the past two years, Dowd has courageously come forward to awaken people to the collateral damage of the COVID pandemic.
Continue reading “Finance ‘Guru’ Reveals Financial Collapse and COVID Jab Data”
While many still refuse to believe it, financial experts and insiders have long warned that a collapse of the U.S. currency is a mathematical inevitability.1,2 The most surprising thing, really, is that it has lasted this long. The same can be said for the financial system of the world as a whole.
Continue reading “Preparing for the Reality of Financial Collapse”
Guest Post by John W. Whitehead
“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” ― Frédéric Bastiat, French economist
Let’s talk numbers, shall we?
The national debt (the amount the federal government has borrowed over the years and must pay back) is $23 trillion and growing.
The amount this country owes is now greater than its gross national product (all the products and services produced in one year by labor and property supplied by the citizens). We’re paying more than $270 billion just in interest on that public debt annually. And the top two foreign countries who “own” our debt are China and Japan.
The national deficit (the difference between what the government spends and the revenue it takes in) is projected to surpass $1 trillion every year for the next 10 years.
Continue reading “The Looming Financial Nightmare: So Much for Living the American Dream”
Guest Post by Jeff Thomas
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
– Ludwig von Mises
The Federal Reserve chart above only goes back to 1970, but its message is clear, nevertheless. The velocity of money has dropped below that which was necessary to maintain a productive economy in 2009 and has never recovered.
The velocity of money can be defined as, “the rate at which money circulates or is exchanged in an economy in a given period.” It’s generally measured as a ratio of gross national product (GNP) to a country’s total money supply.
No money turnover… no economy.
But, if that’s so – if the chart is correct and the money turnover is by far the lowest since 1970 – why did the economy recover after 2010 and why are we in a bull market? Surely, the quantitative easing programme initiated by the Fed corrected the problem and happy days are here again.
Authored by Nick Giambruno, chief analyst, The Casey Report,
There wasn’t a group of people more wrong about the 2008 financial crisis than those at the Federal Reserve.
Mere months before the disaster hit in earnest, the nation’s highest economic and financial officials were vocal that there was nothing to worry about.
Most memorable of these are perhaps two comments from former Fed Chairman Ben Bernanke…
In January 2008, he said, “The Federal Reserve is not currently forecasting a recession.”
And later that year, in July, he said Fannie Mae and Freddie Mac – the two government-sponsored enterprises that kicked off the credit crisis a few months later – were “in no danger of failing.”
And it wasn’t just Bernanke. The same delusional sentiment was echoed by almost all the top Fed and Treasury officials… as well as those in the mainstream financial media and academia.
Of course, we all know how things played out…
Submitted by Tuomas Malinen of GNSEconomics
2019 has started more calmly after a very volatile year-end in the markets. Focus has been on the trade deal between China and the US and the words of the central bankers, most notably those of Jay Powell. However, this is all just a distraction, a side-show. The market volatility was only the first sign of an approaching global economic crisis, as we warned in December 2017.
As the recent PMI figures across the globe show, a global downturn has started and the world is utterly unprepared for it. The global imbalances that have been growing for years cannot lead to anything else than a global crisis . However, there are different paths the crisis could take.
Here, we present three scenarios that the global economy is likely to follow, when the global downturn morphs into something much more sinister.
We’ll start with the most likely scenario: Global Depression.
Continue reading ““Something Biblical Is Approaching” – Here Are The Scenarios Of The Collapse”
“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe
The paragraph above captures everything that has happened, is happening, and will happen during this Fourth Turning. It was written over two decades ago, but no one can deny its accuracy regarding our present situation. The spark was a financial crash. The response to the financial crash by the financial and governmental entities, along with their Deep State co-conspirators who created the financial collapse due to their greed and malfeasance, led to the incomprehensible election of Donald Trump, as the deplorables in flyover country evoked revenge upon the corrupt establishment.
In Part 1 of this article I detailed the damage done by the Deep State and the inevitability of another financial crisis destined to propel this Fourth Turning into its next most violent stage. Now I will examine whether Jordan Peterson’s rules for life can alleviate some of the pain headed our way.
Peterson’s reality-based assessment of our broken societal system has infuriated the social justice warriors and media propagandists whose narratives are based upon lies, misinformation, fake news, and a pliable dumbed down populace distracted by their techno-gadgets. The machinations of the Deep State (Wall Street cabal, Fed, captured politicians, shadowy billionaires, military industrial complex, surveillance agencies, corporate media) are dependent upon the masses believing their big lies and unquestioningly trusting their provably false narratives.
Telling the truth and demolishing these false narratives with facts is the only way to fight those who have chosen the side of evil. Remaining silent in the face of their lies allows tyranny to expand inexorably and fill the vacuum left by the dearth of courageous truth tellers.
On this day in 2008, Bear Stearns, the 85-year-old investment bank, narrowly avoids bankruptcy by its sale to J.P. Morgan Chase and Co. at the shockingly low price of $2 per share.
With a stock market capitalization of $20 billion in early 2007, Bear Stearns seemed to be riding high. But its increasing involvement in the hedge-fund business, particularly with risky mortgage-backed securities, paved the way for it to become one of the earliest casualties of the subprime mortgage crisis that led to the Great Recession.
Continue reading “THIS DAY IN HISTORY – Bear Stearns collapses, sold to J.P. Morgan Chase – 2008”
Last week, we shared with readers a fascinating presentation that Bridgewater’s Ray Dalio made to NY Fed staffers at the 40th Annual Central Banking Seminar held on Wednesday, October 5, 2016. In it, Dalio pointed out that thoughts which dared to question the economic orthodoxy, and which were once relegated to the fringe blogs, have become the norm, pointing out that it is no longer controversial to say that:
He further notes that the debt bubble which was not eliminated during the financial crisis of 2008, has since grown to staggering proportions, and notes that “the biggest issue is that there is only so much one can squeeze out of a debt cycle and most countries are approaching those limits.”
Continue reading “Ray Dalio Warns A 1% Rise In Yields Would Lead To Trillions In Losses”
Submitted by Pam Martens and Russ Martens via WallStreetOnParade.com,
Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system.
A rational observer of Wall Street’s serial hubris might have expected some key segments of this letter to make it into the business press. A mere eight years ago the United States experienced a complete meltdown of its financial system, leading to the worst economic collapse since the Great Depression. President Obama and regulators have been assuring us over these intervening eight years that things are under control as a result of the Dodd-Frank financial reform legislation. But according to the letter the Fed and FDIC issued on April 12 to JPMorgan Chase, the country’s largest bank with over $2 trillion in assets and $51 trillion in notional amounts of derivatives, things are decidedly not under control.
Continue reading “The Fed Sends A Frightening Letter To JPMorgan, Corporate Media Yawns”
Guest Post by Dmitry Orlov
Scanning the headlines in the western mainstream press, and then peering behind the one-way mirror to compare that to the actual goings-on, one can’t but get the impression that America’s propagandists, and all those who follow in their wake, are struggling with all their might to concoct rationales for military action of one sort or another, be it supplying weapons to the largely defunct Ukrainian military, or staging parades of US military hardware and troops in the almost completely Russian town of Narva, in Estonia, a few hundred meters away from the Russian border, or putting US “advisers” in harm’s way in parts of Iraq mostly controlled by Islamic militants.
The strenuous efforts to whip up Cold War-like hysteria in the face of an otherwise preoccupied and essentially passive Russia seems out of all proportion to the actual military threat Russia poses. (Yes, volunteers and ammo do filter into Ukraine across the Russian border, but that’s about it.) Further south, the efforts to topple the government of Syria by aiding and arming Islamist radicals seem to be backfiring nicely. But that’s the pattern, isn’t it? What US military involvement in recent memory hasn’t resulted in a fiasco? Maybe failure is not just an option, but more of a requirement?
Let’s review. Afghanistan, after the longest military campaign in US history, is being handed back to the Taliban. Iraq no longer exists as a sovereign nation, but has fractured into three pieces, one of them controlled by radical Islamists. Egypt has been democratically reformed into a military dictatorship. Libya is a defunct state in the middle of a civil war. The Ukraine will soon be in a similar state; it has been reduced to pauper status in record time—less than a year. A recent government overthrow has caused Yemen to stop being US-friendly. Closer to home, things are going so well in the US-dominated Central American countries of Guatemala, Honduras and El Salvador that they have produced a flood of refugees, all trying to get into the US in the hopes of finding any sort of sanctuary.
“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning
“In the need to develop a capacity to know what potential enemies are doing, the United States government has perfected a technological capability that enables us to monitor the messages that go through the air. Now, that is necessary and important to the United States as we look abroad at enemies or potential enemies. We must know, at the same time, that capability at any time could be turned around on the American people, and no American would have any privacy left such is the capability to monitor everything—telephone conversations, telegrams, it doesn’t matter. There would be no place to hide.
If this government ever became a tyrant, if a dictator ever took charge in this country, the technological capacity that the intelligence community has given the government could enable it to impose total tyranny, and there would be no way to fight back because the most careful effort to combine together in resistance to the government, no matter how privately it was done, is within the reach of the government to know. Such is the capability of this technology.
I don’t want to see this country ever go across the bridge. I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision so that we never cross over that abyss. That is the abyss from which there is no return.” – Frank Church on Meet the Press regarding the NSA – 1975
Ever since Edward Snowden burst onto the worldwide stage in June 2013, I’ve been wondering how he fits into the fabric of this ongoing Fourth Turning. This period of Crisis that arrives like clockwork, 60 to 70 years after the end of the previous Fourth Turning (Civil War – 66 years after American Revolution, Great Depression/World War II – 64 years after Civil War, Global Financial Crisis – 62 years after World War II), arrived in September 2008 with the Federal Reserve created collapse of the global financial system. We are now five and a half years into this Fourth Turning, with its climax not likely until the late-2020’s. At this point in previous Fourth Turnings a regeneracy had unified sides in their cause and a grey champion or champions (Ben Franklin/Samuel Adams, Lincoln/Davis, FDR) had stepped forward to lead. Thus far, no one from the Prophet generation has been able to unify the nation and create a sense of common civic purpose. Societal trust continues to implode, as faith in political, financial, corporate, and religious institutions spirals downward. There is no sign of a unifying regeneracy on the horizon.
The core elements of this Fourth Turning continue to propel this Crisis: debt, civic decay, global disorder. Central bankers, politicians, and government bureaucrats have been able to fashion the illusion of recovery and return to normalcy, but their “solutions” are nothing more than smoke and mirrors exacerbating the next bloodier violent stage of this Fourth Turning. The emergencies will become increasingly dire, triggering unforeseen reactions and unintended consequences. The civic fabric of our society will be torn asunder.
In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe
Debt
The core crisis element of debt is far worse than it was at the outset of this Crisis in September 2008. The National Debt has risen from $9.7 trillion to $17.5 trillion, an 80% increase in five and half years. It took 215 years for the country to accumulate as much debt as it has accumulated since the start of this Crisis. We continue to add $2.8 billion a day to the National debt, and the president declares it is time for this austerity to end. The total unfunded liabilities of the Federal government for Social Security, Medicare, Medicaid, government pensions and now Obamacare exceeds $200 trillion and is mathematically impossible to honor. Corporate debt stands at an all-time high. Margin debt is at record levels, as faith in the Federal Reserve’s ability to levitate the stock market borders on delusional. Consumer debt has reached new heights, as the government doles out subprime auto loans to deadbeats and subprime student loans to future University of Phoenix Einsteins. Global debt has surged by 40% since 2008 to over $100 trillion, as central bankers have attempted to cure a disease caused by debt with more debt.
All of this debt accumulation is compliments of Bernanke/Yellen and the Federal Reserve, who have produced this new debt bubble with their zero interest rate policy and quantitative easing that has driven their balance sheet from $935 billion of mostly Treasury bonds in September 2008 to $4.2 trillion of toxic mortgage garbage acquired from their owners – the insolvent Too Big To Trust Wall Street banks. This entire house of cards is reliant upon permanently low interest rates, the faith of foreigners in our lies, and trust in Ivy League educated economists captured by Wall Street. This debt laden house of cards sits atop hundreds of trillions of derivatives of mass destruction used by the Wall Street casinos to generate “riskless” profits. When, not if, a trigger ignites this explosive concoction of debt, the collapse will be epic and the violent phase of this Fourth Turning will commence.
Civic Decay
The core crisis element of civic decay is evident everywhere you turn. Our failed public educational system is responsible for much of the civic decay, as a highly educated critical thinking populace is our only defense against a small cabal of bankers and billionaires acquiring unwarranted influence and control over our country. Our children have been taught how to feel and to believe government propaganda. The atrocious educational system is not a mistake. It has been designed and manipulated by your owners to produce the results they desire, as explained bluntly by George Carlin.
“There’s a reason that education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions. They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest.”
The urban ghettos become more dangerous and uninhabitable by the day. The inner cities are crumbling under the weight of welfare spending and declining tax revenues. The very welfare policies begun fifty years ago to alleviate poverty have hopelessly enslaved the poor and ignorant in permanent squalor and destitution. The four decade old drug war has done nothing to reduce the use of drugs. It has benefited the corporate prison industry, as millions have been thrown into prison for minor drug offenses. Meanwhile, millions more have been legally addicted to drugs peddled by the corporate healthcare complex. The culture warriors and advocates of new rights for every special interest group continue their never ending battles which receive an inordinate amount of publicity from the corporate media. Class warfare is simmering and being inflamed by politicians pushing their particular agendas. Violence provoked by race and religion is growing by the day. The fault lines are visible and the imminent financial earthquake will push distress levels beyond the breaking point. Once the EBT cards stop working, all hell will break loose. Three days of panic will empty grocery store shelves and the National Guard will be called out to try and restore control.
Global Disorder
The core crisis element of global disorder is evident everywhere you turn. The false flag revolution in the Ukraine, initiated by the U.S. and EU in order to blunt Russia’s control of natural gas to Europe, has the potential to erupt into a full blown shooting war at any moment. The attempt by Saudi Arabia, Israel and the U.S. to overthrow the Syrian dictator in order to run a natural gas pipeline across their land into Europe was blunted by Russia. Iraq is roiled in a civil war, after the U.S. invaded, occupied and destabilized the country. After 12 years of occupation, Afghanistan is more dysfunctional and dangerous than it was before the U.S. saved them from the evil Taliban. Unrest, violent protests, and brutal measures by rulers continue in Egypt, Turkey, Thailand, Venezuela, Bahrain, Brazil, and throughout Africa. American predator drones roam the skies of the world murdering suspected terrorists. The European Union is insolvent, with Greece, Spain, Italy and Portugal propped up with newly created debt. Austerity for the people and prosperity for the bankers is creating tremendous distress and tension across the continent. A global volcanic eruption is in the offing.
It is clear to me the American Empire is in terminal decline. Hubris, delusion, corruption, foolish disregard for future generations and endless foreign follies have set in motion a chain of events that will lead to a cascading sequence of debt defaults, mass poverty, collapsing financial markets, and hyperinflation or deflation, depending on the actions of feckless bankers and politicians. There is no avoiding the tragic outcome brought on by decades of bad choices and a century of allowing private banking interests to control our currency. The “emergency” QE and ZIRP responses by the Federal Reserve to the Federal Reserve created 2008 financial collapse continue, even though the propaganda peddled by the Deep State tries to convince the public we have fully recovered. This grand fraud cannot go on forever. Ponzi schemes no longer work once you run out of dupes. With societal trust levels approaching all-time lows and foreign countries beginning to understand they are the dupes, another global financial crisis is a lock.
The Snowden Factor
With ten to fifteen years likely remaining in this Fourth Turning Crisis, people familiar with generational turnings can’t help but ponder what will happen next. Linear thinkers, who constitute the majority, mistakenly believe things will magically return to normal and we’ll continue our never ending forward human progress. Their ignorance of history and generational turnings that recur like the four seasons will bite them in the ass. We are being flung forward across the vast chaos of time and our existing social order will be transformed beyond recognition into something far better or far worse. The actual events over the coming decade are unknowable in advance, but the mood and reactions of the generational archetypes to these events are predictable. The actions of individuals will matter during this Fourth Turning. The majority are trapped in their propaganda induced, techno distracted stupor of willful ignorance. It will take a minority of liberty minded individuals, who honor the principles of the U.S. Constitution and are willing to sacrifice their lives, to prevail in the coming struggle.
Despite fog engulfing the path of future events, we know they will be propelled by debt, civic decay, and global disorder. Finding a unifying grey champion figure seems unlikely at this point. I believe the revelations by Edward Snowden have set the course for future events during this Fourth Turning. The choices of private citizens, like Snowden, Assange, and Manning, have made a difference. The choices we all make over the next ten years will make a difference. A battle for the soul of this country is underway. The Deep State is firmly ingrained, controlling the financial, political and educational systems, while using their vast wealth to perpetuate endless war, and domination of the media to manipulate the masses with propaganda and triviality. They are powerful and malevolent. They will not relinquish their supremacy and wealth willingly.
Snowden has revealed the evil intent of the ruling class and their willingness to trash the Constitution in their psychopathic pursuit of mammon. The mass surveillance of the entire population, locking down of an entire city in pursuit of two teenagers, military training exercises in major metropolitan areas, militarization of local police forces by DHS, crushing peaceful demonstrations with brute force, attempting to restrict and confiscate guns, molesting innocent airline passengers, executive orders utilized on a regular basis by the president, and treating all citizens like suspects has set the stage for the coming conflict. Strauss & Howe warned that history has shown armed conflict is always a major ingredient during a Fourth Turning.
“History offers even more sobering warnings: Armed confrontation usually occurs around the climax of Crisis. If there is confrontation, it is likely to lead to war. This could be any kind of war – class war, sectional war, war against global anarchists or terrorists, or superpower war. If there is war, it is likely to culminate in total war, fought until the losing side has been rendered nil – its will broken, territory taken, and leaders captured.” – The Fourth Turning – Strauss & Howe -1997
It appears to me the Deep State is preparing for armed conflict with the people. Why else would they be utilizing Big Brother methods of surveillance, militarization of police forces and Gestapo like tactics of intimidation to control the masses? This doesn’t happen in a democratic republic where private individuals are supposed to know everything done by public government servants, not vice versa. They know the cheap, easy to access energy resources are essentially depleted. They know the system they have built upon a foundation of cheap energy and cheap debt is unsustainable and will crash in the near future. They know their fiat currency scheme is failing.They know it is going to come crashing down.
They know America and the world will plunge into an era of depression, violence, and war. They also know they want to retain their wealth, power and control. There is no possibility the existing establishment can be purged through the ballot box. It’s a one party Big Brother system that provides the illusion of choice to the Proles. Like it or not, the only way this country can cast off the shackles of the banking, corporate, fascist elites, and the government surveillance state is through an armed revolution. The alternative is to allow an authoritarian regime, on par with Hitler, Stalin and Mao, to rise from the ashes of our financial collapse. This is a distinct possibility, given the ignorance and helplessness of most Americans after decades of government education and propaganda.
The average mentally asleep American cannot conceive of armed conflict within the borders of the U.S. War, violence and dead bodies are something they see on their 52 inch HDTVs while gobbling chicken wings and cheetos in their Barcalounger. We’ve allowed a banking cartel and their central bank puppets to warp and deform our financial system into a hideous façade, sold to the masses as free market capitalism. We’ve allowed corporate interests to capture our political system through bribery and corruption.
We’ve allowed the rise of a surveillance state that has stripped us of our privacy, freedom, liberty and individuality in a futile pursuit of safety and security. We’ve allowed a military industrial complex to exercise undue influence in Washington DC, leading to endless undeclared wars designed to enrich the arms makers. We’ve allowed the corporate media and the government education complex to use propaganda, misinformation and social engineering techniques to dumb down the masses and make them compliant consumers. These delusions will be shattered when our financial and economic system no longer functions. The end is approaching rapidly and very few see it coming.
Glory or Ruin?
The scenario I envision is a collapse of our debt saturated financial system, with a domino effect of corporate, personal, and governmental defaults, exacerbated by the trillions of currency, interest rate, and stock derivatives. Global stock markets will crash. Trillions in paper wealth will evaporate into thin air. The Greater Depression will gain a choke-hold around the world. Mass bankruptcies, unemployment and poverty will sweep across the land. The social safety net will tear under the weight of un-payable entitlements. Riots and unrest will breakout in urban areas. Armed citizens in rural areas will begin to assemble in small units. The police and National Guard will be unable to regain control. The military will be called on to suppress any and all resistance to the Federal government. This act of war will spur further resistance from liberty minded armed patriots. The new American Revolution will have begun. Leaders will arise in the name of freedom. Regional and local bands of fighters will use guerilla tactics to defeat a slow top heavy military dependent upon technology and vast quantities of oil. A dictatorial regime may assume power on a Federal level. A breakup of the nation into regional states is a distinct possibility.
With the American Empire crumbling from within, our international influence will wane. With China also in the midst of a Fourth Turning, their debt bubble will burst and social unrest will explode into civil war. Global disorder, wars, terrorism, and financial collapse will lead to a dramatic decrease in oil production, further sinking the world into depression. The tensions caused by worldwide recession will lead to the rise of authoritarian regimes and global warfare. With “advances” in technological warfare and the proliferation of nuclear warheads, this scenario has the potential to end life on earth as we know it. The modern world could be set back into the stone-age with the push of a button. There are no guarantees of a happy ending for humanity.
The outcome of this Fourth Turning is dependent upon the actions of a minority of critical thinking Americans who decide to act. No one can avoid the trials and tribulations that lie ahead. We will be faced with immense challenges. Courage and sacrifice will be required in large doses. Elders will need to lead and millennials will need to carry a heavy load, doing most of the dying. The very survival of our society hangs in the balance. Edward Snowden has provided an example of the sacrifice required during this Fourth Turning. How we respond and the choices we make over the next decade will determine whether this Fourth Turning will result in glory or ruin for our nation.
“Eventually, all of America’s lesser problems will combine into one giant problem. The very survival of the society will feel at stake, as leaders lead and people follow. The emergent society may be something better, a nation that sustains its Framers’ visions with a robust new pride. Or it may be something unspeakably worse. The Fourth Turning will be a time of glory or ruin.” – Strauss & Howe – The Fourth Turning
Click these links to read the first two parts of this three part series:
Do No Evil Google – Censor & Snitch for the State
Google, China, the NSA and the Fourth Turning
“Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.” – Charles Ferguson – Predator Nation
The Federal Reserve released its Survey of Consumer Finances last week. It’s a fact filled 80 page report they issue every three years to provide a financial snapshot of American households. As you can see from the chart above, the impact of the worldwide financial collapse has been catastrophic to most of the households in the U.S. A 39% decline in median net worth over a three year time frame is almost incomprehensible. Even worse, the decline has surely continued for the average American household through 2012 as home prices have continued to fall. Median family income plunged by 7.7% over a three year time frame and has not recovered since the collection of this data 18 months ago. Even more shocking is the fact that median household income was $48,900 in 2001. Families are making 6.3% less today than they were a decade ago. These figures are adjusted for inflation using the BLS massaged CPI figures. Anyone not under the influence of psychotic drugs or engaged as a paid shill for the financial oligarchy knows that inflation is purposely under reported in order to keep the masses sedated and pacified. The real decline in median household income is in excess of 20% since 2001.
The destruction of the blue collar jobs has been underway since the early 1970s. And the relentless decline in real blue collar wages has followed a bumpy downward path for decades. Sadly, the average person doesn’t understand the insidious destruction caused to their lives by the Federal Reserve generated inflation, as they actually believe their wages today are higher than they were in 1973. The reality is the oligarchy has used foreign wage differentials and the perceived benefits of globalization to ship manufacturing and now service jobs to Asia while using their captured mainstream media to convince the average American that this has been beneficial to their lives. Using one of their 15 credit cards to buy cheap foreign goods made by people who took their jobs was never so easy. I wonder if the benefits of being able to buy cheap Chinese electronics, toxic dog food, and slave labor produced igadgets outweighed the $2.3 trillion increase in consumer debt, 27% decline in real wages, 7 million manufacturing jobs lost since the mid-1970s, 46 million people on food stamps, $15 trillion increase in the National Debt since 1978, and a gutted decaying industrial base.
Not only have the oligarchs gutted our industrial base, resulting in enormous job losses among middle aged industrial workers, but they are now in the process of impoverishing the youth of this country by sucking them into crushing college debt with the false promise of decent paying jobs when they graduate with a degree in feminist studies from the University of Phoenix. The fabricated mantra that a college education guarantees a good paying job and a better future is not borne out by the facts. There are over 4,800 institutions of higher learning in this country, with only about 50 considered elite. There are another few hundred top notch institutions, with a few thousand mediocre schools and hundreds of for profit on-line diploma mills exploiting the easy Federal government debt to lure millions into their profit scheme of bilking unemployed naïve middle aged dupes and eventually the American taxpayer. The average student loan debt per student is $29,000. Student loan debt outstanding has risen from $200 billion in 2000 to over $1 trillion today. The Federal Government is blowing another bubble. They are the issuer, regulator and guarantor of these loans. They are making the loans with teaser rates to the ultimate in subprime borrowers – students without jobs going for worthless degrees at mediocre schools. The taxpayer is on the hook for the billions in loses that will surely follow. The payoff for this quadrupling of debt has been an 8% real decline in wages for college graduates since 2000. The monetary policies of the Federal Reserve and bipartisan fiscal policies of our government have led to this dreadful job market for the middle class.
The mainstream media dutifully reported a few key highlights from the Federal Reserve report and moved onto more important issues like Snooki’s pregnancy and the octomom’s new porno gig. We certainly couldn’t expect business journalists at Bloomberg, CNBC, NYT, or CNN to actually analyze the data, produce an intelligent dialogue of the causes, and reach a conclusion that the affluent and influential on Wall Street and in Washington DC caused the average family in this country to endure tremendous hardship while the oligarchy plundered and pillaged the countryside, stuffing their pockets with ill-gotten gains. Each of the ideological camps within the oligarchy trot out the usual suspects to blame the other ideological camp, while doing nothing to change the existing paradigm. Krugman and Carville are assigned the task of blaming Republican policies and dogma for the demise of the middle class. Obama and his minions already had their press release prepared, blaming George Bush and claiming the median family has made tremendous strides since he assumed command in2009. Mitt Romney (worth $250 million), whose pocket change exceeds the annual median household income of $45,800, feels the pain of the average American family and proposes a tax decrease for billionaires and less overbearing regulation on the honorable Wall Street banks in order to help the average family. It’s nothing but Kabuki Theater as the characters play their assigned parts in this elaborate display. Gary Wills cuts right to the chase:
“Yet while the rest of the populace was suffering, the rich just got richer. In 2009 and 2010, years in which millions were unable to find work, the top one percent reaped 93% of the ‘recovery’ income, and corporations are making more than they ever did. And the Republicans can still propose even further cuts in the taxes of ‘job creators’ whose only job creation has been for their own lawyers and lobbyists.”
What you will not receive from the corporate mouthpieces in the mainstream media is an explanation of where the money went, who stole it and why it happened. The theme from the media is the loss in net worth and decade long decline in household income was unavoidable and due to circumstances beyond anyone’s control. This is a false storyline perpetrated by those who have stolen your money. It’s been a bipartisan screw job and it was initiated by Clinton, Rubin, Gramm and Leach, who deregulated the banking system in 1999 by repealing the Glass-Steagall Act, but made it clear the Greenspan Put would always be in place to protect the banks from their own recklessness, greed and hubris. As a result, Wall Street could go ahead and take irresponsible financial system destroying risks in pursuit of vast riches, knowing they could count on the unlimited checkbook of Uncle Sam if things went south, and that’s exactly what happened. Heads they won, tails you lost. It’s good to own the politicians, regulators, and media.
“Sometime around the year 2010, Xers will hit a hangover mood like that of the Lost in the early 1930s and the Liberty in the late 1760s: a feeling of personal exhaustion mixed with a new public seriousness. The members of this forty- and fiftyish generation will fan out across an unusually wide distribution of personal outcomes, reminiscent of a night at the bingo table. A few will be wildly successful, others totally ruined, and the largest number will have lost a little ground since the days of Boomer midlife.” – Strauss & Howe – Generations – 1991
Neil Howe and Bill Strauss wrote their first generational theory book six years prior to their epic Fourth Turning prophecy. It appears they nailed it. Generation X households saw their net worth crushed, with a 54% loss in three years. The Baby Boomer households also took a beating in this banker engineered financial collapse. The Silent generation has survived this downturn relatively unscathed. Most of the Silents traded down from their primary residence at or near the top of the housing boom. As Neil Howe points out:
“Most sold or annuitized their financial assets at a much better moment in the history of the Dow. Even if they didn’t, they are more likely than Boomers or Xers to be getting retirement checks from defined-benefit corporate or government plans that are unaffected by the market.”
The Millenials and late Xers did not lose much because they didn’t have much to lose. Most did not own a house or stocks. As the economy continues to deteriorate the generational tension builds. The Silents and Boomers, who vote in large numbers, have not and will not vote for anyone who attempts to reform our entitlement system and make it economically viable over the long-term for young people just entering the job market.
The false storyline about the 2007 through 2010 being an aberration in the long term path to prosperity for the average American family is refuted by the following chart.
This chart paints a long-term picture of generational inequality that has been going on over the last three decades. Over three decades the Silent generation has seen their median real net worth increase by 133%, while GenX has seen their median real net worth decrease by 55% compared to the same age cohort in 1983. Only those 55 and over have seen a real improvement in their net worth over the last 27 years. Considering this period encompassed a seventeen year bull market and the GDP grew from $3.5 trillion to $15.7 trillion, a 450% increase, a few bucks should have trickled down to the average household. Even on an inflation adjusted basis, GDP has risen 125% since 1983. Evidently the economic policies supported by both parties across decades have not floated all boats – just the yachts. Age is only part of the equation. Class is the other piece. There is a class war being waged and the Buffett, Dimon, Blankfein, Romney, Clinton, Koch and the rest of the ultra-wealthy oligarchs are winning. We are now in the midst of a Fourth Turning and the corrupt, dysfunctional, amoral social order will be swept away before the climax of this Crisis.
“Through the Third Turning and into the initial stages of the Fourth, the Silent will prosper, Boomers will cope with declining expectations, and Gen-Xers will get hammered. Throughout history, we have argued, inequality both by class and by age reaches its apogee entering the Crisis era. Indeed, part of the historical purpose of the Crisis is to tear down dysfunctional institutions, vacate positions of entitlement and privilege, rectify the inequality, and create a tabula rasa on which the rising generation can build something new.” – Neil Howe
The reason for the epic collapse of middle class net worth is quite simple when viewed from a 10,000 foot elevation. The great descent in net worth was primarily due to the bursting of the Federal Reserve created real estate bubble. The Case Shiller Home Price Index plunged 28% between 2007 and 2010. The wealth destruction was concentrated among the working middle class because their homes accounted for the vast majority of their household net worth. For the wealthy, housing is a fraction of their vast net worth, while for the lowly poor; homeownership is now only a dream. Of course, between 2000 and 2007 anyone that could fog a mirror was encouraged by George Bush, Barney Frank, the National Association of Realtors, Alan Greenspan, and Wall Street shills to “own” a home. With home prices having fallen an additional 7% since 2010, the middle class has seen a further decline in their net worth. Meanwhile, Ben Bernanke’s ZIRP, QE1, QE2, Operation Twist, and the upcoming “Operation Screw the Middle Class Again” have succeeded in expanding the net worth of millionaires, billionaires and the bonuses of Wall Street bankers, while destroying the fragile finances of little old ladies and middle class risk adverse savers.
Once you dig into the details beneath the thin veneer of Bernaysian obfuscation, you realize the corporate mainstream media storyline of middle class decline has a veiled storyline of a powerful, connected 1%, enriched at the expense of the middle class.
In Part 2 of this three part series I will examine who stole your net worth and in Part 3 why they stole your net worth. Part 4 will require pitchforks, torches and a guillotine.
