by Michael Snyder
July 18, 2012
from
TheAmericanDream Website
Federal Reserve Chairman Ben Bernanke delivered
his annual address to Congress on Tuesday, and he did very little to give
lawmakers much confidence about where the U.S. economy is heading.
Bernanke told members of Congress that recent
economic data points “suggest further weakness ahead” and that
the Federal
Reserve is projecting that the U.S. unemployment rate will remain at 7
percent or above all the way through the end of 2014.
Now, it is important to keep in mind that
Federal Reserve forecasts are almost always way too optimistic. The actual
numbers almost always end up being much worse than what the Fed says they
will be.
So if Bernanke is saying that the U.S.
unemployment rate will be 7 percent or higher until the end of 2014, then
what will the real numbers end up looking like?
During his testimony, Bernanke seemed unusually
gloomy about the direction of the U.S. economy. He seemed resigned to the
fact that there really isn’t that much more that the Federal Reserve can do
to stimulate the U.S. economy. Yes, the Federal Reserve could try another
round of quantitative easing, but the first two rounds did not really do
that much to help.
The truth is that the United States is
absolutely drowning in debt, and when that debt bubble finally bursts the
Federal Reserve is simply not going to be able to save us from the Great
Depression that will happen as a result.
At this point, Bernanke appears to be in “cya” mode.
For example, the
following is from
Bernanke’s prepared remarks to Congress on Tuesday…
The second important risk to our recovery,
as I mentioned, is the domestic fiscal situation.
As is well known, U.S. fiscal policies are
on an unsustainable path, and the development of a credible medium-term
plan for controlling deficits should be a high priority. At the same
time, fiscal decisions should take into account the fragility of the
recovery. That recovery could be endangered by the confluence of tax
increases and spending reductions that will take effect early next year
if no legislative action is taken.
The Congressional Budget Office has
estimated that, if the full range of tax increases and spending cuts
were allowed to take effect - a scenario widely referred to as the
fiscal cliff - a shallow recession would occur early next year and about
1-1/4 million fewer jobs would be created in 2013.
These estimates do not incorporate the
additional negative effects likely to result from public uncertainty
about how these matters will be resolved.
As you recall, market volatility spiked and
confidence fell last summer, in part as a result of the protracted
debate about the necessary increase in the debt ceiling. Similar effects
could ensue as the debt ceiling and other difficult fiscal issues come
into clearer view toward the end of this year.
The most effective way that the Congress could help to support the
economy right now would be to work to address the nation’s fiscal
challenges in a way that takes into account both the need for long-run
sustainability and the fragility of the recovery.
Doing so earlier rather than later would
help reduce uncertainty and boost household and business confidence.
Did you catch that?
Bernanke says that the federal government is on an “unsustainable path” and
must reduce debt, but he also says that the economy cannot afford tax
increases and spending cuts right now.
In fact, Bernanke is
warning that “a
shallow recession would occur early next year” if something is not done
about the looming “fiscal cliff” that so many people are talking about.
So what does Bernanke want us to do?
-
If we continue on the path that we are
on, our debt will continue to grow by leaps and bounds.
-
But if we seriously cut spending or
raise taxes, that will significantly slow down the economy.
Either path leads to a whole lot of pain.
Bernanke sounds like a politician that is trying to cover all of his bases
without giving us a recommendation about how to fix things.
Of course the truth is that
the Federal Reserve system itself is at the very
heart of our economic problems and has been the engine that has caused our
national debt to explode at an exponential rate, but we all know that
Bernanke will never admit that.
-
Bernanke can see that things are
starting to fall apart, and he wants to shift as much blame to
Congress and to other entities as he can while there is still time.
-
Bernanke knows that the U.S. economy is
not going to produce enough jobs for our population anymore, and he
does not want to be blamed for that.
-
Bernanke knows that the money printing
done by the Fed is going to cause prices to continue to go up and
that this will seriously stretch family budgets all over America,
and he does not want to be blamed for that.
-
Bernanke wants to come out of all this
looking like a good guy. At this point he is probably hoping that
the next
great global financial crisis does not happen until his
term ends.
Unfortunately, he is not going to have that
luxury.
The next wave of the economic collapse is
rapidly approaching, and it is going to hit the U.S. even harder than the
last recession did.
And when the unemployment rate soars well up into the double digits, what do
you think is going to happen?
The truth is that the entire country will soon
resemble cities such as Gary,
Indiana and Flint, Michigan.
To get an idea of what most of our cites will soon look like, just check out
this video.
When people lose hope, they tend to get desperate.
And desperate people do desperate things.
Just
look at the mob robberies that we are seeing all over the country right
now.
In Jacksonville, Florida the other day, hundreds of young people that had
just left a massive house party that police had broken up decided that they
would descend on the local Wal-Mart.
According to police, approximately 300 people stormed into Wal-Mart and
started going crazy. They threw produce at each other, many of them started
putting merchandise into their pockets, they destroyed an anti-shoplifting
security scanner that is worth about $1,500 and there were even reports that
shots were fired outside of the store.
It was absolute chaos. You can see video of this incident
right here.
A
similar mob robbery happened in the Portland, Oregon area on Saturday
night…
A group of teens targeted a Troutdale store
last weekend in a ‘flash rob’ and investigators are trying to identify
the suspects.
Investigators said as many as 40 kids entered the Albertsons store at
25691 SE Stark Street at the same time late Saturday night and started
stealing things.
Security officers chased the thieves out, but no one was captured. They
also left employees pretty shaken up, including one woman who was in
tears after getting terrorized by the robbers.
So will Ben Bernanke and the Federal Reserve be
able to save us from this kind of chaos?
Of course not.
If you have any faith in Bernanke at this point then you are being quite
foolish.
Our economy is on the verge of collapse, and when it does collapse there is
going to be hell to pay on
the streets of America.
These days young people seem to commit absolutely brutal crimes just for the
fun of it. For example, in Chicago the other day two teens beat to death a
62 year old disabled man who was collecting cans for no apparent reason
whatsoever.
The following is
from a report about this incident from the NBC
affiliate in Chicago…
Police said a 16-year-old gang member
punched Delfino Mora, father to 12 children and a grandfather to 23,
last Tuesday in an alley in the 6300 block of North Artesian.
Mora’s
devastated family told NBC Chicago that Mora was on his regular route of
collecting cans that he sells for cash when the teens confronted him.
Nicholas Ayala, 17, of the 6300 block of North Talman and Anthony
Malcolm, 18, of the 5500 block of North Broadway were both charged with
first-degree murder and robbery.
Malik Jones, 16, the Latin Kings member accused of striking Mora, was
charged with first-degree murder and ordered held without bail Sunday by
Judge Adam Bourgeois.
Police said Jones handed his friends his cell phone to start filming
then demanded money from Mora and punched him in the jaw. Ayala and
Malcolm are accused of taking turns filming the video which allegedly
showed Mora’s head smashing into the concrete.
But just because you aren’t in the city does not
mean that you are safe.
For example, just check out what happened to three rural Michigan teens when
they decided that it would be fun to hop on a passing train.
The following
is from a
recent article in the New York Times…
For generations of Midwestern youths who
have grown up hearing the long whistles and deep rumbling of passing
locomotives, hopping a freight train to another city has seemed like a
free ride to adventure.
But for three rural Michigan teen-agers who actually followed this
dream, the results proved disastrous. The two 15-year-old boys and a
14-year-old girl climbed off the train when it stopped last Wednesday
evening in a rough neighborhood here. Within hours, the girl had
suffered multiple sexual assaults and all three had been shot in the
head and left for dead in a park.
One boy, Michael Carter, was killed, while the other, Dustin Kaiser, and
the girl staggered to a road and flagged down a truck driver.
Dustin is
in stable condition at the Hurley Medical Center after two rounds of
surgery, while the girl, who was shot through the cheek, was treated and
released on Friday, said Donna J. Fonger, a hospital administrator.
Our country is degenerating, and the Federal
Reserve is not going to save you.
We have been living in the greatest debt bubble in the history of the
planet, and it is going to burst at some point and that is going to cause a
massive economic depression.
Just check out what Richard Duncan, the author of The New Depression,
told
CNBC the other day…
When we broke the link between money and
gold forty years ago, this removed all the constraints on credit
creation. And afterwards credit absolutely exploded. In the U.S. it grew
from $1 trillion to $50 trillion – a fifty-fold increase in forty three
years.
This explosion of credit created the world we live. It created very
rapid economic growth. It ushered in the age of globalization.
But it now seems credit cannot expand any further because the private
sector is incapable of repaying the debt that it has already. And if
credit now begins to contract there is a very real danger that we will
collapse into a new great depression.
In the chart posted below you can see what he is
talking about.
Once upon a time the total amount of debt in the United
States (including government debt, business debt and consumer debt) was
sitting at about a trillion dollars.
Today, it has nearly reached 55 trillion dollars…
We have lived way above our means for decades, and now a day of reckoning is
rapidly approaching.
Ben Bernanke and the Federal Reserve may be able to delay the coming
depression slightly, but they cannot avert it.
You better get ready...
