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Economic Tsunami
We Have Until July at Latest -- Even a Caveman Can See It
"What did you do during the Great Economic Shakeout Grandpa?" I can hear the question already...
"Oh gosh, grandchild, I helped major corporations whove senseless debt loads onto people and outsourced everything I could to India and the Philippines to increase corporate profits so boards of directors
could get paid huge blocks of options offshore to avoid their honest share of taxes...
and in return, I got dog biscuits and screwed like every other minion...which is why we're having dumpster for dinner again tonight..."
The dollar collapse will be the single largest event in human history. This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth,our work,our food,our government,even our relationships are affected by money. No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to. This collapse will be global and it will bring down not only the dollar but all other fiat currencies,as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide.
Rest assured this dollar collapse is coming. It is a mathematical inevitability. We will not be as fortunate to muddle through this collapse like we did in 2008 when it was a corporate problem. This time around,it is a national and global problem. The global Ponzi scheme has run out of gas as the demographics decline,as cheap abundant oil declines,as hegemonic power declines. This comes at a time when we reach the exponential or collapse phase of our money. That crisis is coming very soon at the end of this summer or fall. The money and emergency measures are worn out.
Right now, we are witnessing a truly historic collapse of the economy, and yet most Americans do not understand what is going on. One of the biggest reasons why the American people do not understand what is happening to the economy is because our politicians and the mainstream media are not telling the truth. Barack Obama and Federal Reserve Chairman Ben Bernanke keep repeating the phrase “economic recovery” over and over, and this is really confusing for most Americans because things sure don’t seem to be getting much better where they live. There are millions upon millions of Americans that are sitting at home on their couches right now wondering why they lost their jobs and why nobody will hire them. Millions of others are wondering why the only jobs they can get are jobs that a high school student could do. Families all across America are wondering why it seems like their wages never go up but the price of food and the price of gas continue to skyrocket.
The Midwest floods will seriously impact food and gas prices over the next year. It is suspected that the lost farmland is behind the price spike to $7.55 a bushel for corn–twice last year's price. The corn shortage will have far-reaching consequences: Corn is a key ingredient in ethanol gasoline, feeds America's livestock and is found in many food products including soft drinks and cereal. Prices will undoubtedly increase steadily at the grocery store, gas pump and butcher shop throughout the summer as Midwest flooding continues along the Missouri River basin. Not only are farmers losing their homes, land and fields–ultimately their bank accounts will also suffer this season.” And let's not forget all that genetically modified seed washing south to contaminate natural fields.
LONDON, June 5, 11(Reuters) – The world’s top 14 derivatives dealers may need extra cash to handle a surge in transaction clearing, especially in choppy markets, the Bank for International Settlements (BIS) said. Clearing is being favored by regulators because it is backed by a default fund that ensures a trade is completed even if one side goes bust, as with the collapse of Lehman Brothers during the financial crisis. World leaders have agreed that chunks of the $600 trillion off-exchange derivatives market must be standardized and cleared by the end of 2012 to broaden transparency and curb risk. Researchers at the BIS, a global forum for central bankers, looked at whether the "Group of 14" dealers (G14) that dominate derivatives trading would have enough capital to handle the anticipated surge in trades that will have to be cleared. The real number is over one quadrillion in OTC derivatives, not 600 trillion. The G14 dealers comprise Bank of America-Merrill Lynch, Barclays Capital, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, RBS, Societe Generale, UBS and Wells Fargo Bank.
The homeownership rate in April 2010 was significantly lower than previously thought. The age-adjusted homeownership rate was lower in April 2010 than in April 1990! We are facing some very serious long-term economic problems in this country, and we need to educate the American people about why the collapse of the economy is happening. If the American people don’t understand why they are losing their jobs, why they are losing their homes and why they are drowning in debt then they are going to keep on doing all of the same things that they have been doing. They will also keep sending the same idiot politicians back to Washington to represent us. There are some fundamental things about the economy that every American should know. The American people need to be shocked out of their entertainment-induced stupor long enough to understand what is really going on and what needs to be done to solve our nightmarish economic problems. If we do not wake up enough Americans in time, the economic collapse that is coming could tear this nation to shreds.
Economic Tsunami
Economic Tsunami is a term used to describe a set of economic forces that are propelled by a single triggering event and which creates significant financial distress and destruction. As with a natural tsunami, in an economic tsunami the resulting effects can be felt far and wide, across numerous geographic regions and/or industrial sectors. For example, in 2008 the subprime mortgage meltdown in the U.S. created an economic tsunami that effectively froze world credit markets. The resulting impact was devastating and included the government takeover of the secondary mortgage market giants Fannie Mae and Freddie Mac, the collapse of investment bank titans Bear Stearns and Lehman Brothers, the bailout of insurance giant AIG and near-bankruptcy of the country of Iceland.
When the world's third largest economy suffers a natural disaster of the magnitude of the earthquake, tsunami, and multiple nuclear meltdowns in Japan, it is inevitable that its economic impacts will permeate through the world's economies. The full extent of the economic impact of the Japan earthquake and tsunami is becoming apparent, with hundreds of factories shut across Japan, warnings of rolling blackouts and predictions from economists that the disaster would push the country into recession. Japan's economy is export-led. Japan is the one of the world's largest importers of oil but demand is likely to drop as industrial activity falters. So with such an inordinately large budget deficit, it will be imperative to get those factories open again. Japan is the third largest consumer of oil in the world, behind the United States and China, and the second-largest net importer of crude oil, according to the Department of Energy.
The Bank of Japan is preparing to pump billions of yen into the economy when it announces an emergency "quake budget" to prevent the disaster derailing the country's fragile economic recovery. Toyota and Nissan said they were halting production at all of their 20 factories. Toyota, the world's largest carmaker, evacuated workers from two plants in the worst affected regions and has not been able to reach the sites to inspect the damage. The plants make up to 420,000 small cars each year, mostly for export. Two of Honda's three plants remain closed.
Other manufacturers have also reported major damage to their factories, with Kirin Holdings, Fuji Heavy Industries, GlaxoSmithKline and Nestlé among those to halt operations. Sony, the electronics group, has suspended production at eight plants. At one plant, 1,000 workers had to take refuge on the second floor after the tsunami hit. Tire company Bridgestone, camera maker Canon and Citigroup Holdings Japan reportedly have not faced major damage to their facilities in the region. All ports have been closed amid warnings of aftershocks to come. Post-disaster disruptions to Japan's supply chain may cause a more widespread and damaging ripple effect on American industry than has previously been recognized. Based on economic data rather than anecdotes, there is much more widespread U.S. industrial dependence on imports from Japan than post-earthquake accounts have typically indicated. U.S. auto and electronics companies aren't the only vulnerable sectors.
Based on import penetration data, many of the highest rates of dependence on Japan are found in non-electronics capital goods sectors — industrial machinery and components vital to high-value production throughout the domestic U.S. manufacturing base.
The overriding view in the marketplace is that the Japanese investors may have to sell U.S. government securities to pay for rebuilding of the economy and their infrastructure. The U.S. has an overly high dependence on Japanese and other foreign suppliers, especially considering these are sectors where you would think the U.S. maintains a competitive advantage, as they are not labor intensive and represent large capital investments. That dependence on Japanese-made goods could greatly slow America's already-sluggish economic depression, as these industries generate an outsized share of the country's best-paying jobs and technological innovation.
Japan's import penetration rate for motor vehicle transmission and power train more than doubled to 11% since 1997 and rose by nearly one-third in 2010 alone. Japanese-made capacitors held 33% of the U.S. market in 2009, up from 15% 12 years earlier, while its share of semiconductor production equipment increased from 13% to 16%. Nearly 21% of metal-cutting machine tools purchased by U.S. companies came from Japan, down from 29% in 1994, but the report noted that imports of those products rose by almost half last year.
While imports of Japanese-made power turbines and turbine generator sets fell by 47%, that was largely due to a pause in the construction of new energy-generation systems. However, Japan's share of the market soared from 0.7% to 15%.
The data underscores the many crucial economic and security benefits of achieving greater national self-reliance in these sectors while substituting domestically-made products for imports from Japan and elsewhere would greatly strengthen the recovery.
The United States is rapidly becoming the very first "post-industrial" nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution. It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II.
But now we are witnessing the deindustrialization of America. Tens of thousands of factories have left the United States in the past decade alone. Millions upon millions of manufacturing jobs have been lost in the same time period. The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today? Waste-paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled and our economy is now just a shadow of what it once was. Once upon a time America could literally out-produce the rest of the world combined. Today that is no longer true, but Americans consume more than anyone else in the world. If the deindustrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children?
Any great nation throughout history has been great at making things. So if the United States continues to allow its manufacturing base to erode at a staggering pace how in the world can the U.S. continue to consider itself to be a great nation? We have created the biggest debt bubble in the history of the world in an effort to maintain a very high standard of living, but the current state of affairs is not anywhere close to sustainable. Every single month America goes into more debt and every single month America gets poorer.
The U.S. government is expected to hit the $14.294 trillion debt ceiling, setting in motion an uncertain, 11-week political scramble to avoid a default. The Treasury Department is announcing that it will stop issuing and reinvesting government securities in certain government pension plans, part of a series of steps designed to delay a default until Aug. 2. The Treasury’s moves buy time for the White House and congressional leaders to reach a deficit-reduction agreement that could clear the way for enough lawmakers to vote to raise the amount of money Congress allows the nation to borrow.
So what happens when the debt bubble pops?
The deindustrialization of the United States should be a top concern for every man, woman and child in the country. But sadly, most Americans do not have any idea what is going on around them. When the economy collapses, as it must, the money people have invested almost anywhere except under their mattresses will be gone. We are now at the crossroads. The economic collapse IS coming. The radiation IS coming.
The following are 19 facts about the deindustrialization of America that will blow your mind....
#1 The United States has lost approximately 42,400 factories since 2001. About 75 percent of those factories employed over 500 people when they were still in operation.
#2 Dell Inc., one of America ?s largest manufacturers of computers, has announced plans to dramatically expand its operations in China with an investment of over $100 billion over the next decade.
#3 Dell has announced that it will be closing its last large U.S. manufacturing facility in Winston-Salem , North Carolina in November. Approximately 900 jobs will be lost.
#4 In 2008, 1.2 billion cell phones were sold worldwide. So how many of them were manufactured inside the United States ? Zero.
#5 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.
#6 As of the end of July, the U..S. trade deficit with China had risen 18 percent compared to the same time period a year ago.
#7 The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.
#8 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.
#9 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.
#10 Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul , Minnesota . Approximately 750 good paying middle class jobs are going to be lost because making Ford Rangers in Minnesota does not fit in with Ford's new "global" manufacturing strategy.
#11 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
#12 In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services.
#13 The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000.
#14 In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.
#15 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
#16 Printed circuit boards are used in tens of thousands of different products. Asia now produces 84 percent of them worldwide.
#17 The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.
#18 One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
#19 The U.S. Census Bureau says that 43.6 million Americans are now living in poverty; and according to them, that is the highest number of poor Americans in the 51 years that records have been kept.
So how many tens of thousands more factories do we need to lose before we do something about it?
How many millions more Americans are going to become unemployed before we all admit that we have a very, very serious problem on our hands?
How many more trillions of dollars are going to leave the country before we realize that we are losing wealth at a pace that is killing our economy?
How many once great manufacturing cities are going to become rotting war zones like Detroit before we understand that we are committing national economic suicide?
The deindustrialization of America is a national crisis. It needs to be treated like one. A deindustrialized America hasn’t any viable economic future. Foreign governments already own a good portion of American Real Estate and businesses. What's it going to be like in 10 yrs?
America is in deep, deep trouble folks. It is time to wake up.
