Signs of Economic Trouble
By James Bailey
Z3News.com
When people hear warnings of economic trouble coming they often say things like, “Yeah, yeah, I have been hearing that for decades and it never happens.”
I even hear a lot of skepticism from Christians regarding prophetic warnings about trouble ahead. But regardless of what anyone believes about the future we should at least be able to agree on the past. That is the focus of this post.
I have identified seven disturbing facts about our current economic conditions that all point to trouble ahead. These seven events have already happened so anyone can look up the data for themselves. Yet hardly anyone is talking about these things. The mainstream news media refuses to go there and for the most part the church does too. As a result many Americans are unaware and unconcerned. Americans are suffering from a giant disconnect between the reality of what has already happened and the fantasy that nothing bad is going to happen.
What makes these seven events so disturbing is that they are all unprecedented. We are in uncharted territory. The combination of these seven things coming together at the same time should be alarming to anyone.
1. The U.S. Housing Market Has Already Collapsed
The housing market in the United States collapsed in 2008 due to our government requiring banks to approve home mortgage loans for people who could not afford to make the payments. That is not the narrative told in the mainstream news media, but that is what happened. The U.S. Justice Department even prosecuted banks that failed to meet their minimum thresholds for the percentage of loans to low-income clients. Bankers don’t need the government to tell them how to make loans, but facing the threat of prosecution they complied. Predictably these loans went into default, causing huge losses for financial institutions as the bad loans were written off.
As the losses mounted our entire financial system nearly collapsed. Lehman Brothers, the fourth largest investment bank in the United States, suffered a crash in their stock price and a devaluation of their assets forcing them to declare bankruptcy. Others would have followed if not for a massive bail out from the U.S. federal government, with the backing of the Federal Reserve Bank. Because the United States is the world’s largest economy, the collapse caused enormous damage throughout the world. The damage was so great it left us with a zombie financial system; still stumbling around not realizing it has already died. Of course, our political leaders and the complicit news media quickly shifted the blame to those greedy bankers acting irresponsibly just to make more profits. The obvious solution, according to them, was to clamp down on them with even more government regulations. That is exactly what happened next.
2. Too-Big-to-Fail Financial Institutions are Now Bigger than Ever
Two obvious conclusions from the 2008 collapse should have been that the government must stop requiring banks to make bad loans and must prevent financial institutions from becoming so big that the failure of one firm could cause the entire system to melt down. But there were big problems with both of those conclusions because the first would have required an admission from our government leaders that it was their policies that caused the crash and the second would have required them to stand up to the bankers telling them they can’t continue to operate as investment banks and commercial banks under the same roof.
That would have required honesty, humility, integrity, courage, and a commitment to represent the interests of average American citizens. So it didn’t happen.
So new legislation was put in place in 2010, called the Dodd-Frank Wall Street Reform and Consumer Protection Act, which dramatically increased regulations, which dramatically increased compliance costs, which made it much harder for smaller firms to make a profit, which caused many of them to either fail or be gobbled up by bigger banks, which caused the too-big-to-fail banks to get even bigger, which caused a far greater concentration of wealth in the hands of the top financial institutions than ever before, which put our financial system in even greater danger today than it was in 2008. The failure of any one of these large firms could quickly cause the whole system to fail.
3. Sovereign Debt Levels are Now Higher than Ever
The mainstream news media loves to talk about our “economic recovery” and even debates who should get credit for it, but the big elephant in the room that no one wants to talk about is the huge increase in sovereign debt levels for every major industrialized nation. Since 2008 debt levels have skyrocketed, increasing every year with no end in sight. The alarms should be sounding that we are on an unsustainable path, but instead we are celebrating. The United States’ debt level has doubled since 2008. Yet instead of cutting spending, our government continues to spend faster than ever before. In 2008 our financial institutions were in danger of default, but today the danger is far greater because the sovereign governments are in danger of default. They were our last line of defense and now they are in terrible shape. When they default there will be no one big enough to bail them out.
4. Central Banks are Now More Powerful than Ever
Since 2008 central banks have replaced free markets as the primary drivers of the stock market, bond market, currency market, and real estate market. Investors today are more interested in predicting the actions of the central bank than predicting the actions of the markets. This is not only true in the United States, but the rest of the world has followed our example. Throughout the world central banks now have far greater control over investors than ever before. Never before in world history has there been such a great concentration of power in the hands of so few people. The power of the bankers has become so great that even the sovereign governments now take their orders from them. This is not a good thing because the bankers primary concern is not the welfare of the people, but their own profits. To that end they have already proven their willingness to manipulate, lie, conceal, bribe, threaten, and re-write the laws of the land for their own benefit. Actually, I am being too kind because the truth is they are guilty of far worse crimes than these.
5. Investors Are Now in Greater Danger than Ever
Since the 2008 collapse the Fed has maintained artificially low interest rates with short-term rates staying essentially at zero, which has caused many investors to pull out of the bond market seeking greener pastures. Even investors who have historically avoided higher risks associated with the equity market have now loaded up their portfolios with risky assets. The bigger returns from the stock markets have been irresistible. This transfer of wealth into equities has given the Fed even greater control over the wealth of our nation.
With greater control over the markets, the Fed is now in a position to coral investors wherever they want them to go. If the Fed were a benevolent organization looking out for the interests of American citizens there would be nothing to worry about. However, that is not the case. They only represent their own interests, which means today’s investors should be worried because their investments are in greater danger than ever before. Once all the sheep are corralled into the barn the Fed can then steal hundreds of billions of dollars through an orchestrated, planned sudden turn of events. Vast amounts of wealth that was once out of their reach in the bond market is now ripe for the taking in the stock market. A sudden drop in the stock market accompanied by a temporary shut down in trading could quickly wipe out the life savings of millions of Americans as their wealth is transferred into the accounts of those who orchestrated the events.
There is no longer anything stopping the Fed from doing whatever they want. There is no longer anyone standing in their way. Our elected officials who were supposed to be looking out for us have long since betrayed us. The stage has been set for a slaughter and the bankers are already licking their chops.
6. U.S. Money Supply is Now Bigger than Ever
The massive bailouts of financial institutions following the 2008 collapse required unprecedented increases in the U.S. money supply by the Federal Reserve. Prior to 2008 the money supply (M0) had increased steadily and slowly to about $900 billion. Since 2008 the money supply has increased dramatically, up 344% to over $4 trillion in 2014. If any other country increased their money supply by 344% it would cause hyperinflation. However, the dollar is unique because it is the reserve currency for the world so our excess dollars were absorbed by the rest of the world. So far the money printing has not caused inflation problems for us, but it has caused inflation in some other countries and forced some central banks to buy U.S. dollars in foreign exchange markets to mitigate the impact of excess dollars on their economy.
So the unique role of the U.S. dollar has allowed the Fed to temporarily get away with dramatically increasing the money supply and artificially suppressing interest rates. As a result, they have successfully kicked the can down the road and created an illusion that all is well in America and there is nothing to worry about. However, by kicking the can down the road the Fed is ultimately creating a much bigger problem because the excess liquidity combined with the artificially low interest rates have made it possible for Americans to continue borrowing more and more money, going deeper into debt without feeling much pain. This is a very dangerous game that only works as long as the rest of the world is willing to go along with it. The problem is other countries have already had enough of our nonsense because they realize America does not have the capacity to repay its debt. BRICS nations, including Brazil, Russia, India, China, and South Africa, have already formed a new currency alliance and are now very close to completing the formation of a new financial system with plans to replace the dollar as the world’s reserve currency. Time is running out for America’s high-stakes debt game.
7. Labor Force Participation Rate is Now Lower than Ever
Our government is telling us that everything is okay. They have manipulated the unemployment numbers by changing the rules on how the numbers are calculated. According to Jim Clifton, the Chairman and CEO of Gallup, the official unemployment rate of 5.7% is a “big lie”. The government uses many tricks in their calculations to mask the real unemployment numbers. For example, they conveniently omit anyone who worked at least one hour in a week. Counting them as employed is total nonsense.
In contrast, Gallup tracks the percentage of U.S. adults that are employed for 30 or more hours per week, and that number has been hovering near record lows since 2009 with only 44.2% of adults employed. Many of those who are working 30 or more hours per week are stuck in low paying, minimum-wage jobs that don’t match their skills or training. So the number of adults employed full time with good jobs is even lower. And if the real numbers show only 44.2% are employed that means 55.8% are unemployed. That number tells a far different story than the government’s phony 5.7% unemployment rate.
Based on the government’s unemployment numbers, only 8.69 million Americans are officially unemployed. But based on the Gallup numbers there are currently 101 million adults unemployed, which is 10 million more than when President Obama took office in January 2009. You won’t hear those numbers from the mainstream news media because they are totally on board with promoting the government’s lies. If Americans knew the real condition of the labor force they would never believe the lie that we are in an economic recovery. With these facts, anyone would know to be concerned.
Conclusion
Our founding fathers warned us about the dangers of turning over our currency printing to the bankers. Thomas Jefferson left us with this clear warning:
“I sincerely believe that banking institutions are more dangerous to our liberties than standing armies. The issuing power should be taken from the banks and restored to the people to whom it properly belongs. If the American people ever allow private banks to control their currency, first by inflation then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered.”
In his autobiography, Benjamin Franklin wrote, “The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the prime reason for the Revolutionary War.”
America heeded their warnings initially, but by 1913 we handed over our currency to the Federal Reserve Bank. Since then the dollar has lost 97% of its value and now appears to be ready to lose the remaining 3%.
My purpose for documenting these facts is to get people to wake up from their slumber and recognize what is really happening. Hopefully this will help some people to believe the warnings that God is now sending to His people. His warnings will only benefit those who believe and take action. It is time to start believing and acting accordingly.
