Charlie McGrath of Wide Awake News gives us the real deal on where our economy was at the height of the bubble in 2006 compared to today:
I want to bring you some statistics that are negative by nature. It’s not because I’m negative or I want to say bad things about my country. It’s that I want people to be, at least if nothing else, mentally prepared for what’s coming our way.
The following are some highlight stats provided by Charlie:
860 (unofficially 2000)
US Sovereign Debt
It’s clear that we are nowhere near a recovery and that, in fact, things have gotten worse.
The U.S. is now in a Catch 22, with no easy way out. All options lead to more misery.
If the Fed continues to print money to monetize debt, the eventual (and most likely) outcome will be severe inflation, if not all out hyperinflation. The government can continue to spend billions upon trillions, but it is not going to cause our economy to miraculously return to prosperity. The exact opposite effect will occur.
The flip side of the coin is something we mentioned in Here Comes the Sledgehammer. If the government were to implement austerity measures and stop spending money on stimulus, bailouts, unemployment assistance, medical care and cut other social programs, then the little guy on the street will feel it almost immediately.
Yesterday we pointed out that nearly 2 million people across the nation have lost their emergency unemployment benefits. That’s 2 million already struggling to pay the bills and put food on the table with a weekly assistance check. That check is now gone. In addition, we have over 30 million more Americans currently receiving unemployment assistance – but within 99 weeks of today, their benefits will run out too. And because of necessary budget and spending cuts, it is likely they are not going to get any extensions, meaning that by December of 2012, all of those 30 million people currently on unemployment are going to be without any sort of income whatsoever.
Remember, also, that job losses going forward will not be limited to just the private sector. Analyst Meredith Whitney estimates that at least two million jobs will be eliminated by state and local governments.
The negative feedback loop is in full effect. Job losses lead to less spending, which leads to more job losses. As we shed jobs and wages drop, more people stop paying mortgages, leading to further declines in real estate and other asset classes (in REAL dollar terms). This leads (probably) to even more stimulus spending from our government, leading to even more money printing, which further devalues our dollar, raising the price of all goods relative to incomes.
The end result really is unpredictable, but based on the continuing cycle of economic destruction, we can take an educated guess.
Higher crime rates as people have to rob, steal and pillage to put food on the table. Protests and potentially violent riots as many go hungry. On the government level, we may see meaningful spending cuts, we may not, but the way things are going, we’re looking at even more sovereign debt and long-term liabilities. This, in turn, may lead to foreign creditors pulling out of US Treasuries, leading to a complete collapse of the US dollar, and subsequently, our entire economic system.
The final outcome, as to whether we go into a controlled collapse or a complete, all-out economic Armageddon, will be determined sometime in the next decade.
Prepare yourself mentally, financially, physically and spiritually.
We are entering an economic, social and political climate unlike anything we have ever seen in our lifetimes.
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Read by 1,962 people Date: December 1st, 2010 Website:www.SHTFplan.com
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