Credit Card Nation: Why The Facebook Killer And The U.S. Congress Have A Great Deal In Common

Credit Card Nation: Why The Facebook Killer And The U.S. Congress Have A Great Deal In Common | Steve-Stephens-Photo-from-Cleveland-Police-460x329 | Economy & Business News Articles

Most Americans have seemingly convinced themselves that as a society we will never pay a great price for going into so much debt and that we will never pay a great price for the horrendous crimes against humanity that we are committing on a daily basis.  If you don’t understand what I am talking about, just keep reading the rest of this article.  Just as there are consequences for our actions individually, so there are also consequences for our actions as a society.  And although our national day of reckoning has been put off for quite some time, when it does finally arrive the pain is going to be absolutely unimaginable.

Just recently, I was astounded to learn that the total amount of credit card debt in the United States has crossed the trillion dollar mark.  It boggles my mind that so many Americans could be so foolish, because credit card debt is one of the worst forms of debt in existence, and financial experts all over the country have spent an extraordinary amount of time and energy trying to get this message across to people.

But even though people know that going into credit card debt is bad, they just keep on doing it anyway.  We have become a “buy now, pay later” society that gives very little consideration to long-term consequences.

On a national level, we are now nearly 20 trillion dollars in debt, and a historic showdown over government spending and debt threatens to absolutely paralyze the federal government at the end of this month.  At this point many believe that it will be virtually impossible for Congress to avoid a government shutdown on April 29th, and once it begins Donald Trump’s entire agenda will come to a complete and total crashing halt until the crisis is resolved.  The following comes from David Stockman

In the meanwhile, everything else — health care reform, tax cuts, infrastructure — will become backed-up in an endless queue of legislative impossibilities. Accordingly, there will be no big tax cut in 2017 or even next year. For all practical purposes Uncle Sam is broke and his elected managers are paralyzed.

The Treasury will be out of cash and up against a hard stop debt limit of $19.8 trillion in a matter of months. But long before that there will be a taste of the Shutdown Syndrome on April 28 owing to the accumulating number of “poison pill” “riders” to the CR.

These include the virtual certainty of riders to the House bill to “defund” Planned Parenthood and sanctuary cities. Other extraneous amendments will also possibly include funds demanded by the White House to start the Mexican Wall, enhance deportations and fund some of Trump’s $54 billion defense increase.

I am so glad that Stockman mentioned Planned Parenthood, because the decision whether or not to continue funding Planned Parenthood is going to be one of the central issues of this upcoming crisis.

Currently, the U.S. government gives Planned Parenthood roughly $500,000,000 a year.  By law, none of that money is supposed to be used to provide abortions, but everyone knows what the real deal is.

Some Planned Parenthood clinics do provide other services, but at the end of the day Planned Parenthood’s core business is abortion.  In fact, since Roe v. Wade was decided in 1973 they have killed far more babies than anyone else in the United States by a very wide margin.

And for decades, the U.S. government has been the number one source of funding for Planned Parenthood.  In fact, there are questions as to whether or not Planned Parenthood would be able to continue as a viable business without money from the federal government.

Over the years, when members of Congress have voted to shower Planned Parenthood with hundreds of millions of dollars a year, they have not done it in the heat of the moment.  Rather, their votes have been the result of cold, calculated decision-making processes.

In other words, the members of Congress that have been voting to keep funding Planned Parenthood year after year have the blood of millions of dead children on their hands, and there is very little difference between them and Facebook killer Steve Stephens.

When Stephens broadcast the cold-hearted murder of a 74-year-old man on Facebook on Sunday, he instantly became a worldwide celebrity.  And even though most people in the country have now seen his face, he continues to somehow elude authorities.

What Stephens has done is absolutely horrific, and when he is finally caught he will pay greatly for his crimes.

Just like Stephens, America is on the run today.  We keep thinking that we will never have to pay a price for the tens of millions of children that we have killed, and our government continues to fund the slaughtering of the innocents that goes on every single day in this nation.

But now Congress is going to be given one more chance to make the right decision.

The Republicans have control of the White House, the Senate and the House of Representatives.  They have the power to defund Planned Parenthood, but it is going to take a tremendous amount of resolve.

That is because under the current rules it is going to take 60 votes to get a spending agreement through the Senate, and so the Republicans will need at least 8 Democratic votes to get any bill to Trump’s desk.

Sadly, the Democrats are pledging to stretch out a government shutdown indefinitely if Republicans try to defund Planned Parenthood.

So what will the Republicans do?  Well, they could change the rules in the Senate to require only a simple majority vote on spending bills, and that would essentially be the “thermonuclear option”.

Or they could give in, but if they do that it would likely mean that Planned Parenthood will never be defunded, because the Republicans will never have a better opportunity than they do right now.

And I have a feeling that is what is going to happen.  I have a feeling that the Republicans are going to give in at some point and agree to keep giving Planned Parenthood half a billion dollars a year.

If that is indeed what happens, both the Democrats and the Republicans that help pass such a bill will be cold-blooded killers just like Facebook killer Steve Stephens, only those Democrats and those Republicans will have far more blood on their hands than Stephens does.

Most people do not realize this, but without a doubt this is one of the most critical moments in modern American history.  And if the funding of Planned Parenthood continues, I have a feeling that is going to mean that our national day of reckoning is much closer than most people would dare to imagine.

If we do not stop what we are doing, someday our crimes will catch up to us, and the debt that we will owe at that point will be far beyond what we can bear to pay.


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Not Prepared: Will Most Americans Be Absolutely Blindsided By Multiple Wars And A Simultaneous Economic Collapse?

Not Prepared: Will Most Americans Be Absolutely Blindsided By Multiple Wars And A Simultaneous Economic Collapse? | Lightning-Storm-Public-Domain | Collapse Economy & Business PreparednessSurvival

According to CBS News, an astounding three-fourths of all Americans have to “scramble to cover their living costs” each month.  In other words, most of the country is either living paycheck to paycheck or very close to it.  But instead of tightening their belts and trying to put something away for the very hard times that are coming, most Americans are completely and utterly unprepared for what is ahead because the people that they trust on television keep telling them that everything is going to be okay.  Unfortunately, everything is not going to be “okay”, and when things start falling apart all around us there is going to be a lot of anger directed toward those that have been lulling everyone into a false sense of security.

One of the reasons why I am sounding the alarm so loudly is so that people will not be blindsided by the things that are about to happen to this country.  As you will see below, we are on the precipice of two major wars, conditions are ripe for a devastating economic collapse, and if you were to throw in a major natural disaster or two you would have a recipe for the kind of “perfect storm” that many have been warning about.

Earlier today I focused on our looming economic problems, and in this article I want to address the potential for more military conflict in the very near future.  When Donald Trump hit Syria with 59 cruise missiles, millions of Americans greatly celebrated, but much of the rest of the world was deeply alarmed.

The Trump administration has said that more strikes are possible, but Russia and Iran are both pledging that “we will respond with force” if any more attacks are conducted…

RUSSIA and Iran have said they will respond to further American military actions following the air strike in Syria last week.

In a joint statement, the command centre for the two countries and allied groups said “we will respond to any aggression”.

The statement read: “What America waged in an aggression on Syria is a crossing of red lines. From now on we will respond with force to any aggressor or any breach of red lines from whoever it is and America knows our ability to respond well.”

Do you understand what that means?

If Trump fires off any more cruise missiles at Syria, we will essentially be in a state of war with both Russia and Iran.

Previously, Russia had warned that our two nations were “one step from war” because of Trump’s actions, but the Trump administration is showing no signs of backing down.  In fact, UN Ambassador Nikki Haley says that regime change in Syria is now a top priority

The US ambassador to the United Nations, Nikki Haley, who has done a remarkable job of continuing the diplomatic tone set by her predecessor Samantha Power, said in an interview on CNN’s “State of the Union” which will air in full on Sunday, that regime change in Syria as one of the Trump administration’s top priorities in Syria.  Her statement was a complete U-turn from what she said just over a week ago, when she told a group of reporters that the US was “no longer focused on getting Assad out.”

Some members of the administration are apparently even advocating a full-blown invasion of Syria.  For example, it is being reported that National Security Adviser H.R. McMaster has come up with a plan to send 150,000 U.S. ground troops into the country…

As NSA, McMaster’s job is to synthesize intellience reports from all other agencies. President Trump is being given an inaccurate picture of the situation in Syria, as McMaster is seeking to involve the U.S. in a full scale war in Syria.

The McMaster-Petraeus plan calls for 150,000 American ground troops in Syria.

Many special operations veterans including General Joseph Votel have raised serious concerns about McMaster’s plans for Syria.

I don’t know if I have the words to describe how incredibly foolish that would be.

Do we really want to fight an extremely bloody ground war with the combined forces of Russia, Iran, Syria and Hezbollah?

There is very little good that could come out of a war in Syria even in the most rosy scenarios possible, but if things go bad they could go really, really bad.

Meanwhile, NBC News is reporting that President Trump is considering various military options for North Korea, and one of those options includes “killing dictator Kim Jong-Un”…

The National Security Council has presented President Donald Trump with options to respond to North Korea’s nuclear program — including putting American nukes in South Korea or killing dictator Kim Jong-un, multiple top-ranking intelligence and military officials told NBC News.

After seeing what happened in Syria and hearing these threats openly discussed in the U.S. media, what do you think Kim Jong-Un is thinking at this point?

One member of Congress is warning that “millions can die” if a military strike against North Korea goes badly.  Once U.S. missiles begin flying, North Korea can start firing off their nukes and their vast arsenal of chemical warheads almost instantly.

Could you imagine what would happen if large numbers of deadly nerve gas warheads started exploding in downtown Seoul, downtown Tokyo and at U.S. military bases in Japan?

The carnage would be off the charts, and this is a scenario that we want to avoid at all costs.

Unfortunately, it seems like we are coming closer to a conflict with North Korea with each passing day.  In fact, today we learned that an aircraft carrier strike group headed by the USS Carl Vinson is sailing in the direction of North Korea right now

Amid rising tensions with North Korea, an aircraft carrier strike group led by the USS Carl Vinson were heading toward the Korean peninsula.

The aircraft carrier and its accompanying ships had been scheduled to leave from Singapore for port visits to Australia on Saturday, but Adm. Harry Harris, head of U.S. Pacific Command, ordered the strike group to head north toward Korean waters instead.

So what happens if the U.S. starts fighting two major wars simultaneously, the biggest debt bubble in the history of the planet starts bursting, and the U.S. stock market crashes by 50 percent as some analysts are projecting?

Some Americans still have memories of living through the Great Depression and World War II, but most of us have been living in a bubble of peace and prosperity for so long that we don’t think that anything could ever come along and threaten our way of life.

And since the election of Donald Trump, interest in “prepping” has dropped to the lowest level that I have ever seen.  Most people have been lulled into a false sense of security, while the truth is that we have entered perhaps the most dangerous period of time in modern American history.

So you all can do whatever you want, but me and my house are going to get prepared for the tremendous storm that is about to hit this nation.

Those that are wise will do the same, but unfortunately most Americans are going to get absolutely blindsided by what is coming because they have been trusting the wrong voices.


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2017 Debt Crisis: Once Vacation Ends, Congress Will Have 4 Days To Avoid Government Shutdown On April 29

2017 Debt Crisis: Once Vacation Ends, Congress Will Have 4 Days To Avoid Government Shutdown On April 29 | U.S.-Capitol-Photo-by-Martin-Falbisoner | Economy & Business Government Special Interests

April 2017 could turn out to be one of the most important months in U.S. history that we have seen in a very long time.  On April 6th, Donald Trump attacked Syria on the 100th anniversary of the day that the U.S. officially entered World War I, and now at the end of this month we could be facing an unprecedented political crisis in Washington.  On Friday, members of Congress left town for their two week “Easter vacation”, and they won’t resume work until April 25th.  What this means is that Congress will have precisely four days when they get back to pass a bill to fund government operations or there will be a government shutdown starting on April 29th.

Up to this point, there has been very little urgency by either party to move a spending bill forward.  It is almost as if everyone is already resigned to the fact that a government shutdown will happen.  The Democrats will greatly benefit from a government shutdown because they can just blame the entire mess on the Republicans.  But for the GOP, this is essentially the equivalent of political malpractice.

To me, there is simply no way that Congress is going to be able to agree on a bill that funds the entire government in just four days.  And it turns out that this upcoming deadline comes exactly on the 100th day of Trump’s presidency

The U.S. government is poised to shut down on Day 100 of Donald Trump’s presidency, unless Congress can pass a new spending bill or a continuing resolution before the current one expires on April 28.

Since Congress is currently on a two-week recess, there will be a sense of urgency to get a new bill passed once they reconvene on April 25. Leaders in both chambers would have four days to craft a new proposal that each side can agree on and get it on the president’s desk for Trump to sign.

If the Republicans control the White House, the Senate and the House of Representatives, why will it be so difficult to get an agreement on a spending bill?

Well, first of all, look at how difficult it was for the Republicans to agree on a bill to repeal and replace Obamacare.  At this point, it doesn’t look like that is going to happen at all.

More importantly, any bill to fund the government is going to require 60 votes in the Senate.  The “nuclear option” that the Republicans just used to push the Gorsuch Supreme Court nomination through is not available in this case under current Senate rules because a spending bill of this nature would not qualify.

So the Democrats have leverage, and they plan to use it to the maximum.  Senate Minority Leader Chuck Schumer is already promising to block any spending bill that includes funds for a border wall or that defunds Planned Parenthood

The threat from Senate Minority Leader Chuck Schumer and other Democratic leaders sets up a climactic first showdown with the president, particularly with their inclusion of Trump’s signature border wall proposal.

“If Republicans insist on inserting poison pill riders such as defunding Planned Parenthood, building a border wall, or starting a deportation force, they will be shutting down the government and delivering a severe blow to our economy,” Schumer said in a statement.

Up until now, Trump hasn’t needed Democratic votes to stock his cabinet or advance the repeal of Obamacare, but a spending bill keeping the government open is subject to a 60-vote threshold in the Senate.

Do you understand what this means?

President Trump is going to be under an immense amount of pressure to end the government shutdown once it begins, but to do so will mean that he has to give up his goal of getting a border wall.

Do you think that Trump will just throw in the towel and forget about his beloved border wall after giving countless speeches promising one?

It is a game of chicken between Trump and the Democrats, and I don’t think that either side will give in easily.

Of even greater importance is the debate over the funding of Planned Parenthood.

There are members of the Freedom Caucus that will absolutely not vote for any spending bill that includes funding for Planned Parenthood.  But without the Freedom Caucus, there aren’t enough Republican votes to get a spending bill through the House of Representatives.

Alternatively, Senate Minority Leader Chuck Schumer is vowing that his party will block any funding bill that attempts to defund Planned Parenthood in the Senate.

If Planned Parenthood is not defunded now, it never will be defunded.  This is one of the most pivotal moments in recent U.S. political history, and the outcome is going to have extraordinary consequences for our nation.

For those that are optimistic that there will not be a government shutdown, do you actually expect me to believe that this battle over the funding of Planned Parenthood will somehow get resolved in just four days?

Give me a break.

And of course there are dozens of other major issues that have to be resolved as well.  For example, Senator McCain is promising note to vote for any bill unless it includes an enormous increase in military spending, while many Senate Democrats would be very much against such a move.

I don’t see any way that a government shutdown is going to be avoided at this point, and the longer it goes on the more financial markets are going to get rattled.

Meanwhile, we continue to get even more signs that a substantial slowdown has begun for the U.S. economy.  Last week, we learned that only 98,000 jobs were added in March, and that was only about half of what most analysts were expecting.

And since it takes approximately 150,000 jobs a month just to keep up with population growth, that means that we are losing ground.

At the same time, the Atlanta Fed’s GDPNow forecasting model is now projecting that U.S. GDP growth for the first quarter of 2017 will be just 0.6 percent on an annualized basis.

That is absolutely pathetic, and as I have said before, I wouldn’t be surprised at all if we actually end up with a negative number for the first quarter.

If we do indeed get a negative number for the first quarter and that is followed by another negative number for the second quarter, that will mean that a new recession has already started right now but we just haven’t gotten official confirmation yet.

And lots of other things are already happening which have not happened since the last recession.  For instance, this is the first time since the last financial crisis when there has been no growth for commercial and industrial lending for at least six months.

In addition, commercial bankruptcies spiked during the last recession, and now it is happening again

Commercial bankruptcy filings, from corporations to sole proprietorships, spiked 28% in March from February, the largest month-to-month move in the data series of the American Bankruptcy Institute going back to 2012.

Of course consumer bankruptcies are rising at an alarming rate as well.  The following comes from Wolf Richter

In December, bankruptcy filings rose 4.5% from a year earlier. In January they rose 5.4%. It was the first time consumer bankruptcies rose back-to-back since 2010. I called it “a red flag that’ll be highlighted only afterwards as a turning point.”

In March, consumer bankruptcy filings rose 4% year-over-year, to 77,900, the highest since March 2015, when 79,000 filings occurred, according to the American Bankruptcy Institute data.  The turning point has now been confirmed.

If you would like, I could keep talking about the bad economic news for a couple thousand more words.  U.S. credit card debt has just surpassed the one trillion dollar mark, a major crisis has arrived for the U.S. auto industry, thousands of retail stores are closing all over America, our pension funds are underfunded by trillions of dollars, and the U.S. national debt is now sitting at a grand total that is just shy of 20 trillion dollars.  The only reason that we have not crossed that 20 trillion dollar mark yet is because the debt ceiling deadline has already passed, and that is another thing that Congress needs to address very quickly if they want to avoid a major crisis.

Needless to say, the last thing that we need at this point is another war or two on top of everything else.

Unfortunately, a U.S. aircraft carrier strike group headed by the USS Carl Vinson is heading toward North Korea right at this moment, and Russia and Iran are promising to “respond with force” to any new U.S. attacks on Syria.  I will be writing quite a bit more about all of this on End Of The American Dream later today.

Those that were hoping for some sort of “reprieve” under Donald Trump can forget all about that now.  The pace of global events is really starting to accelerate, and the U.S. is already in a more precarious position than it was at any point in 2016.

The clouds have been building for a very long time, and now the storm is almost upon us.  I hope that you have been getting prepared, because a day of reckoning for the United States of America is closing in very rapidly.


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Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning

Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning | New-Crisis-Public-Domain | Economy & Business Special Interests

Is the U.S. economy about to get slammed by a major recession?  According to Gallup, U.S. economic confidence has soared to the highest level ever recorded, but meanwhile a whole host of key economic indicators are absolutely screaming that a new recession is beginning.  And if the U.S. economy does officially enter recession territory in 2017, it certainly won’t be a shock, because the truth is that we are well overdue for one.  Donald Trump has inherited quite an economic mess from Barack Obama, and it was probably inevitable that we were headed for a significant economic downturn no matter who won the election.

One of the key indicators to watch is average weekly hours.  When the economy shifts into recession mode, employers tend to start cutting back hours, and that is happening right now.  In fact, as Graham Summers has pointed out, we just witnessed the largest percentage decline in average weekly hours since the recession of 2008…

Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning | Average-Weekly-Hours-460x345 | Economy & Business Special Interests

In addition to the decline in hours, Summers has suggested that there are a number of other reasons to believe that a new recession is here…

The fact is that the GDP growth of 4%-5% is not just around the corner. The US most likely slid into recession in the last three months. GDP growth collapsed in 4Q16, with a large portion of the “growth” coming from accounting gimmicks.

Consider the following:

  • Tax receipts indicate the US is in recession.
  • Gross private domestic investment indicates were are in a recession.
  • Retailers are showing that the US consumer is tapped out (see AMZN’s recent miss).
  • UPS, another economic bellweather, dramatically lowered 2017 forecasts.

To me, even more alarming is the tightening of lending standards.  In our debt-based economy, the flow of credit is absolutely critical to economic growth, and when credit starts to get tight that almost always leads to a recession.

So the fact that lending standards have now tightened for medium and large sized firms for six quarters in a row is very bad news.  The following comes from Business Insider

“Although modest over the past couple of quarters, it is still worth noting that this is now the sixth quarter in succession that standards have tightened for large and medium sized firms,” Deutsche Bank economist Jim Reid wrote in a research note to clients.

“This usually only happens in recessions.”

Reid is 100 percent correct on this point.  This is precisely the kind of thing that we would expect to see if a new recession was beginning, and if this trend continues it is hard to imagine that the U.S. economy will be able to continue to grow.

And it is interesting to note that job growth at S&P 500 companies has gone negative for the first time since the last recession, and so large firms are definitely starting to feel the pressure.

Simultaneously, lending standards are also tightening up for consumers

“The most notable tightening in standards though was in consumer loans,” the Fed said. “During the quarter, banks reported an 8.3% net tightening in credit standards for credit cards and 11.6% net tightening for auto loans.”

US consumer spending accounts for more than two-thirds of economic activity and is thus a key driver of growth in the world’s largest economy.

Those numbers for credit cards and auto loans are major red flags.

It is very simple.  Tighter credit means less economic activity which means slower economic growth.  The U.S. economy grew at a dismal 1.9 percent annual rate during the 4th quarter of 2016, and it would be absolutely no surprise if we end up with a negative number for the first quarter of 2017.

One of the big reasons why lending standards are tightening is because bankruptcies are rising.

As I reported the other day, consumer bankruptcies just rose on a year-over-year basis in back to back months for the first time in almost seven years.  Commercial bankruptcies had already been rising on a year-over-year basis throughout 2016, and so the fact that consumer bankruptcies have now joined the party is a very bad sign.

And we have also just learned that real median household income declined in 2016

Its official! The spectacular Obama/Fed “recovery” produced no increase in real medin household income in 2016 (the last year of Obama’s reign of [economic] error). In fact, real median annual household income in December 2016 ($57,827) was 0.9 percent lower than in December 2015 ($58,356).

Yes, I understand that there is a tremendous amount of optimism out there right now because of Donald Trump.

But the truth is that it is literally going to take some sort of an economic miracle to avoid a recession.

And if a recession is going to happen anyway, the Trump administration should want it to occur as quickly as possible.

You see, if a recession starts a year from now, it will be much more difficult for Trump to blame it on Obama.  But if a recession starts right now, he will definitely be able to argue that it happened because of the mess that he inherited from the last administration.

In addition, the sooner the next recession ends the sooner the next recovery can begin.  If a recession is still going on during the 2020 campaign, that would be really bad for Trump, but if a recovery is well underway by then that would be really good for his chances.

If you doubt this, just go back and look at the 1984 campaign.  After a very difficult recession, the U.S. economy bounced back strongly and Ronald Reagan was able to ride that momentum to an easy victory.


So this may sound very strange to many of you, but the truth is that if a new recession is coming Trump supporters should want it to happen as rapidly as possible.

Unfortunately, once a new recession begins it may not play out like recessions normally do.  The U.S. government is 20 trillion dollars in debt, we are in the midst of one of the biggest stock market bubbles in history, and our planet is becoming more unstable with each passing day.  So even though Trump is in the White House and Obama is gone, let there be no doubt that a catastrophic economic crisis could literally erupt at any moment.  I continue to encourage my readers to do all that they can to get prepared, because those that are prepared in advance will have the best chance of successfully getting through what is coming.

Unfortunately, a lot of people out there seem to believe that all of our problems have somehow evaporated just because Donald Trump is now living in the White House.

That is simply not true, and we all need to be praying for guidance and wisdom for Trump and his team as they prepare to deal with the great challenges that are ahead for our nation.


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Tis The Season For Credit Card Debt: This Christmas Americans Will Spend An Average Of 422 Dollars Per Child

Tis The Season For Credit Card Debt: This Christmas Americans Will Spend An Average Of 422 Dollars Per Child | christmas-credit-card-debt | Economy & Business

For many Americans, the quality of Christmas is determined by the quality of the presents.  This is especially true for our children, and some of them literally spend months anticipating their haul on Christmas morning.  I know that when I was growing up Christmas was all about the presents.  Yes, adults would give lip service to the other elements of Christmas, but all of the other holiday activities could have faded away and it still would have been Christmas as long as presents were under that tree on the morning of December 25th.  Perhaps things are different in your family, but it is undeniable that for our society as a whole gifts are the central feature of the holiday season.

And that is why so many parents feel such immense pressure to spend a tremendous amount of money on gifts for their children each year.  Of course this pressure that they feel is constantly being reinforced by television ads and big Hollywood movies that continuously hammer home what a “good Christmas” should look like.

Once again in 2016, parents will spend far more money than they should because they want to make their children happy.  According to a brand new survey from T. Rowe Price, parents in the United States will spend an average of 422 dollars per child this holiday season…

More than half of parents report they aim to get everything on their kids’ wish lists this year, spending an average of $422 per child, according to a new survey from T. Rowe Price.

To me, that seems like a ridiculous amount of money to spend on a single child, but this is apparently what people are doing.

But can most families really afford to be spending so wildly?

Of course not.  As I have detailed previously, 69 percent of all Americans have less than $1,000 in savings.  That means that about two-thirds of the country is essentially living paycheck to paycheck.

So all of this reckless spending brings with it a lot of additional financial pressure.  But because we are a “buy now, pay later” society, we do it anyway.  We are willing to mortgage a little bit of the future in order to have a nice Christmas now.

Another new survey has found that close to half the country feels “pressure to spend more than they can afford during the holiday season”

The SunTrust Banks, Inc. (NYSE: STI) annual Holiday Financial Confidence survey reveals that 43 percent of Americans feel pressure to spend more than they can afford during the holiday season. Pressure to overspend is up four percent since the survey was first conducted in 2014 by Harris Poll, but down slightly from a high of 46 percent last year.

Ultimately, much of this spending ends up going on credit cards, and credit card debt is one of the most insidious forms of debt.

And the truth is that credit card debt was already surging nationally even before we got to the holiday season

But at least one indicator suggests that much of the US is actually struggling financially: Americans are piling on credit card debt at record levels that we haven’t seen since the financial crisis.

Households added $21.9 billion in credit card debt in the third quarter — the largest increase for that period since 2007 — bringing the amount of outstanding credit card debt to $927.1 billion, according to the latest study from WalletHub.

Debt takes future consumption and brings it into the present, but there is a price to be paid for doing that.

Because we have to pay interest on that debt, we always have to pay back more money than we originally borrowed.  And because interest rates on credit cards are so high, paying back credit card debt can be particularly painful.

According to Business Insider, the average American household currently owes nearly $8,000 to the credit card companies, and it is being suggested that this is a sign that the economy is much weaker than we have been led to believe…

The fact that the average household with debt now owes $7,941 to credit card companies, according to WalletHub, suggests that America’s putative economic strength might be a mirage — that the economy may in fact be a lot weaker than all the happy indicators are leading people to believe.

“I think it is a cause of concern because it says consumers are struggling despite the low unemployment figures,” says Lucia Dunn, an economics professor at Ohio State University. “I think the rise in debt arises from weakness in the economy. People whose incomes have dropped may be trying to maintain an older level of consumption by just charging everything.”

And guess what?

The Federal Reserve just raised interest rates, and so that means that paying off credit card debt will be even more painful for Americans in 2017 than it was in 2016.

Could it be possible that we have lost our way?

Could it be possible that we need to entirely rethink our approach to “the holiday season”?

According to an old NBC News story, one survey discovered that 45 percent of all Americans would prefer to skip Christmas altogether because of all the financial pressure…

Some 45 percent of those polled said the holiday season brings so much financial pressure, they would prefer to skip it altogether. Almost half said their level of stress related to holiday expenses is high or extremely high.

That’s probably because nearly the same amount — some 45 percent — say they do not expect to have enough money set aside to cover holiday expenses.

As a society, we need to learn that things will never make us happy.

Life is not about accumulating toys.  Rather, we were created to love and to be loved.

If you want to live a great life, learn how to be a person of great love.  Unfortunately, most people never seem to learn that lesson.

A couple of months ago, I reported that the total amount of household debt in the United States had reached a grand total of 12.3 trillion dollars.

If you break that number down, it comes to approximately $38,557 for every man, woman and child in the entire country.

In addition to that, we must also remember that corporate debt has approximately doubled while Barack Obama has been in the White House, state and local government debt is completely out of control, and the U.S. national debt is now sitting just under 20 trillion dollars.

Our greed is absolutely killing us, but we can’t stop.

So we will continue to party until eventually somebody comes along and turns out the lights.

The post Tis The Season For Credit Card Debt: This Christmas Americans Will Spend An Average Of 422 Dollars Per Child appeared first on The Sleuth Journal.


Source: Alternative news journal

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Drowning In Debt: 35 Percent Of All Americans Have Debt That Is At Least 180 Days Past Due

debt, drowning in debt

More than a third of all Americans can’t pay their debts.  I don’t know about you, but to me that is a shocking figure.  As you will see below, 35 percent of the people living in this country have debt in collections.  When a debt is in  collections, it is at least 180 days past due.  And this is happening during the “economic recovery” that the mainstream media keeps touting, although the truth is that Barack Obama is going to be the only president in United States history to never have a single year when the economy grew by at least 3 percent.  But at least things are fairly stable for the moment, and if this many Americans are having trouble paying their bills right now, what are things going to look like when the economy becomes extremely unstable once again.

The 35 percent figure is a nugget that I discovered in a CNN article about Detroit that I was reading earlier today

And the city’s troubles have left a mark on the financial stability of its residents in a big way, according to a new report from the Urban Institute.

About 66% of residents have debt in collections — meaning more than 180 days past due — at a median amount of $1,847. Across the U.S., 35% of Americans have debt in collections.

It is hard to believe that 66 percent of the residents of one of our largest cities could have debt in collections, but without a doubt the city of Detroit is a complete and utter economic wasteland at this point.

But to me, the 35 percent figure for the nation as a whole is a much greater concern.

And much of the debt that is in collections is credit card debt.

In the immediate aftermath of the last financial crisis, many Americans started getting out of debt, and that was a very good thing.

Unfortunately, that trend has completely reversed itself over the past few years, and now credit card balances are rising at a pace that is quite alarming

Using data from the U.S. Census Bureau and the Federal Reserve, ValuePenguin found that the average credit card debt for households that carry a balance is a shocking $16,048 — a figure that has risen by 10% over the past three years. At the average variable credit card interest rate of 16.1%, this translates to nearly $2,600 in credit card interest alone. And many credit cards have interest rates much higher than the average.

Even scarier, consider that based on the average interest rate and a minimum payment of 1.5% of the balance, it would take nearly 14 years for the typical indebted household to pay off its existing credit card debt, at a staggering cost of more than $40,200. Keep in mind that this assumes no additional credit card debt is added to the tab along the way.

Those that have been there know exactly how it feels to be drowning in credit card debt.

You know, they don’t teach you about credit cards in high school or in college.  At least they didn’t in my day.  So once I got out into the “real world” and discovered the joy of instantly getting whatever I wanted with a credit card, I didn’t understand how painful it would be to pay that money back someday.

If you have credit card balances that are out of control, they can keep you up late into the night.  The worry and the fear can eat away at you like a cancer, and many people play a game of moving balances from one card to another in a desperate attempt to stay afloat.

Fortunately I learned my hard lessons at an early enough age to get things turned around.  Now I warn others about the danger of credit card debt through my writing, and my hope is that the things that I share on my websites are doing some good for others that may be struggling financially.

When you are deep in debt, it is exceedingly difficult to build up any wealth of your own.  This is one of the primary reasons why 69 percent of all Americans have less than $1,000 in savings today.

In essence, more than two-thirds of the country is living paycheck to paycheck, and that is a recipe for disaster when the next major economic downturn in the U.S. strikes.

Overall, household debt in America has now reached a grand total of 12.3 trillion dollars.  When you break that down, it comes to $38,557 for every man, woman and child in the entire nation.

So for a family of five, your share of that total would be $192,785.

And remember, that is just household debt.  That total does not include any form of business debt or any form of government debt.

We truly are a “buy now, pay later” society.  We were the wealthiest and most prosperous nation on the entire planet, and previous generations handed us the keys to the greatest economic machine in world history, but that wasn’t good enough for us.

We always had to have more, more, more – and now we have accumulated more debt than any society in the history of the globe.

It is inevitable that this giant debt bubble is going to burst.  Anyone with an ounce of common sense can see that.

What we experienced in 2008 was just a preview of the hard times that are coming.  The next recession is going to be even worse, and most economists are convinced that it will happen within the next four years no matter who is elected president in November.  The following comes from the Wall Street Journal via the Calculated Risk blog

Economists in The Wall Street Journal’s latest monthly survey of economists put the odds of the next downturn happening within the next four years at nearly 60%.

Just like the last time around, millions of those that are “living on the edge” financially will fall out of the middle class and into poverty when they lose their jobs.

Hopefully most of you that have been reading my work for an extended period of time have already been getting out of debt and have been building up a financial cushion.

Sadly, most of the country continues to act as if they are living in a pre-2008 world, and the economic wake up call that is coming is going to be incredibly painful for those that thought they could get away with being exceedingly reckless financially.

The post Drowning In Debt: 35 Percent Of All Americans Have Debt That Is At Least 180 Days Past Due appeared first on The Sleuth Journal.


Source: Alternative news journal

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America The Debt Pig: We Are A ‘Buy Now, Pay Later’ Society – And ‘Pay Later’ Is Rapidly Approaching (VIDEO)

debt

If you really wanted to live like a millionaire, you could start doing it right now.  All you have to do is to apply for as many credit cards as possible and then begin running up credit card balances like there is no tomorrow.  At this point, I know what most of you are probably thinking.  You are probably thinking that such a lifestyle would not last for long and that a day of reckoning would eventually come, and you would be exactly right.  In fact, anyone that has ever had a tremendous amount of credit card debt knows how painful that day of reckoning can be.  To mindlessly run up credit card debt is exceedingly reckless, but unfortunately that is precisely what we have been doing as a nation as a whole.  We are a “buy now, pay later” society, and our national day of reckoning is approaching very, very quickly.

Often we like to focus on our exploding national debt, but household debt is out of control too.  In fact, the total amount of household debt in the United States is now up to a whopping 12.3 trillion dolllars

In the second quarter, total household debt increased by $35 billion to $12.3 trillion, according to the New York Fed’s latest quarterly report on household debt. That increase was driven by two categories: auto loans and credit cards.

We throw around words like “trillion” so often these days that they often start to lose their meaning.  But the truth is that 12.3 trillion dollars is an astounding amount of money.  It breaks down to about $38,557 for every man, woman and child in the entire country.  So if you have a family of four, your share comes to a grand total of $154,231, and that doesn’t even include corporate debt, local government debt, state government debt or the gigantic debt of the federal government.  That number is only for household debt, and there aren’t too many Americans that could cough up their share right at this moment.

Do you remember when I wrote about how credit card companies are specifically targeting less educated and less sophisticated consumers?  Well, that is where much of the credit card debt growth has come lately.  Just check out these numbers

Now, credit cards are returning among individuals with low credit or subprime credit scores below 660. Among people with credit scores between 620 and 660, the share that had a credit card rose to 58.8% in 2015 from a low of 54.3% in 2013. Among those with scores below 620, the number of people with a credit card increased to 50% from a low of 45.6% two years ago. Both figures for 2015 are the highest since 2008.

In America today, we are enjoying a standard of living that we do not deserve.

We consume far more wealth than we produce.  The only way we are able to do that is by going into debt.

Debt takes future consumption and brings it into the present.  In other words, we are damaging the future in order to make the present a little bit better.  On an individual level, we may enjoy the big screen television we buy with a credit card today, but we are taking away our ability to spend money later.  And on a national level, what our unprecedented debt binge is doing to future generations of Americans is beyond criminal.

Earlier this month I explained these things to a live studio audience down at Morningside, and you can view a video of that right here

In this article I haven’t even talked about corporate debt yet.  Instead of learning their lessons from the last financial crisis, big corporations have gone on the biggest debt spree of all time.  If you can believe it, corporate debt has approximately doubled since the last financial crisis.  In other words, since the last recession we have essentially matched the total amount of corporate debt that we accumulated from the beginning of the country up to 2009.

Unfortunately, a lot of that debt is now going bad.

In previous articles I have documented that corporate debt delinquencies are now the highest that they have been since the last financial crisis, and corporate debt defaults are also the highest that they have been since the last financial crisis.

At this point, even the mainstream media is acknowledging that we have a corporate debt “crisis”.  The following comes from an article that was just put out by the Denver Post

The number of companies that have defaulted so far this year has already passed the total for all of last year, which itself had the most since the financial crisis. Even among companies considered high-quality, or investment grade, credit-rating agencies say a record number are so stretched financially that they’re one bad quarter or so from being downgraded to “junk” status.

Companies whose debt is already deemed “junk” are in the worst shape in years. To pay back all they owe, they would have to set aside every dollar of their operating earnings over the next eight and a half years, more than twice as long as it would have taken during the 2008 crisis, according to Bank of America Merrill Lynch.

Are you starting to get the picture?

And I haven’t even started talking about our national debt yet.  When Barack Obama entered the White House, we were 10.6 trillion dollars in debt.  Today, we are 19.4 trillion dollars in debt.  That means that we have added 8.8 trillion dollars to the national debt under Obama, which breaks down to an average of 1.1 trillion dollars of additional debt a year.

We have been taking more than 100 million dollars of future consumption and bringing it into the present every single hour of every single day during the Obama administration.  That is why I am constantly referring to our “debt-fueled standard of living”.  We do not deserve to live the way that we do, but since we are able to steal from our children and our grandchildren we are able to enjoy a standard of living that most people in the world can only dream about.

Of course we are literally destroying the future of America in the process, but very few people seem to care about that these days.

Without all of this debt, we would be in a very deep economic depression right now.

But even with all of this “stimulus”, we are still mired in the worst economic “recovery” since 1949.  In fact, Barack Obama is actually on track to be the very first president in all of American history to not have one single year when U.S. GDP grew by 3 percent or better, and he has had two terms in which to try to get that accomplished.  The percentage of working age Americans that actually have a job is way down from where it was just prior to the last recession, and in this video I explain why the employment numbers put out by the government are not nearly as good as the administration would have us believe…

If the American people would have been willing to sacrifice and make some very hard choices a long time ago, maybe we could have gotten a handle on all of this debt.

But instead we continue to rack up debt as if there is no tomorrow, and in the process we are literally destroying tomorrow.

Every dollar of debt that we accumulate now makes life worse for our children and our grandchildren.

Unfortunately, we are a bunch of debt pigs, and we just can’t help ourselves.  We have come to believe that it is “normal” to go into so much debt, and as a society we continue to race toward economic oblivion.

The post America The Debt Pig: We Are A ‘Buy Now, Pay Later’ Society – And ‘Pay Later’ Is Rapidly Approaching (VIDEO) appeared first on The Sleuth Journal.


Source: Alternative news journal

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George Soros Is Preparing For Economic Collapse – Does He Know Something That You Don’t?

image credit: Niccolò Caranti

image credit: Niccolò Caranti

Why is George Soros selling stocks, buying gold and making “a series of big, bearish investments”?  If things stay relatively stable like they are right now, these moves will likely cost George Soros a tremendous amount of money.  But if a major financial crisis is imminent, he stands to make obscene returns.  So does George Soros know something that the rest of us do not?  Could it be possible that he has spent too much time reading websites such as The Economic Collapse Blog?  What are we to make of all of this?

The recent trading moves that Soros has made are so big and so bearish that they have even gotten the attention of the Wall Street Journal

Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.

Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors often view gold as a haven during times of turmoil.

Hmmm – it sounds suspiciously like George Soros and Michael Snyder are on the exact same page as far as what is about to happen to the global economy.

You know that it is very late in the game when that starts happening…

One thing that George Soros is particularly concerned about that I haven’t been talking a lot about yet is the upcoming Brexit vote.  If the United Kingdom leaves the EU (and hopefully they will), the short-term consequences for the European economy could potentially be absolutely catastrophic

Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU.

If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said.

The Brexit vote will be held two weeks from today on June 23rd, and we shall be watching to see what happens.

But Soros is not just concerned about a potential Brexit.  The economic slowdown in China also has him very worried, and so he has directed his firm to make extremely bearish wagers.

According to the Wall Street Journal, the last time Soros made these kinds of bearish moves was back in 2007, and it resulted in more than a billion dollars of gains for his company.

Of course Soros is not alone in his bearish outlook.  In fact, Goldman Sachs has just warned that “there may be significant risk to the downside for the market”

Goldman Sachs is getting nervous about stocks.

In a note to clients, equity strategist Christian Mueller-Glissmann outlined the firm’s fears that there may be significant risk to the downside for the market.

Ultimately, George Soros and Goldman Sachs are looking at the same economic data that I share with my readers on a daily basis.

As I have been documenting for months, almost every single economic indicator that you can possibly think of says that we are heading into a recession.

For instance, just today I was sent a piece by Mike Shedlock that showed that federal and state tax receipts are really slowing down just like they did just prior to the last two recessions…

US federal personal tax receipts receipts are falling fast. So is the Evercore ISI State Tax Survey.

The last two times the survey plunged this much, the US was already in recession.

Is it different this time?

Tax-Receipts-Mish-Shedlock-460x367

And online job postings on LinkedIn have now been falling precipitously since February after 73 months in a row of growth

After 73 consecutive months of year-over-year growth, online jobs postings have been in decline since February. May was by far the worst month since January 2009, down 285k from April and down 552k from a year ago.

Last week, the government issued the worst jobs report in nearly six years, and the energy industry continues to bleed good paying middle class jobs at a staggering rate.  The following comes from oilprice.com

That may seem counterintuitive in an industry that has been rapidly shedding workers, with more than 350,000 people laid off in the oil and gas industry worldwide.

Texas is one place feeling the pain. Around 99,000 direct and indirect jobs in the Lone Star state have been eliminated since prices collapsed two years ago, or about one third of the entire industry. In April alone there were about 6,300 people in oil and gas and supporting services that were handed pink slips. Employment in Texas’ oil sector is close to levels not seen since the aftermath of the financial crisis in 2009. “We’re still losing big chunks of jobs with each passing month,” Karr Ingham, an Amarillo-based economist, told The Houston Chronicle.

At this point it is so obvious that we have entered a new economic downturn that I don’t know how anyone can possibly deny it any longer.

Unfortunately, the reality of what is happening has not sunk in with the general population yet.

Just like 2008, people are feverishly racking up huge credit card balances even though we stand on the precipice of a major financial crisis…

American taxpayers are quick to criticize the federal government for its ever-increasing national debt, but a new study released Wednesday found taxpayers are also saddled with debt, and are likely to end 2016 with a record high $1 trillion in outstanding balances.

Wallethub, a site that recommends credit cards based on consumers’ needs, said that will be the highest amount of credit card debt on record, surpassing even the years during and before the Great Recession. The site said the record high was in 2008, when people owed $984.2 billion on their credit cards.

Will we ever learn?

This has got to be one of the worst possible times to be going into credit card debt.

Sadly, the “dumb money” will continue to act dumb and the “smart money” (such as George Soros) will continue to quietly position themselves to take advantage of the crisis that is already starting to unfold.

We can’t change what is happening to the economy, but we do have control over the choices that we make.

So I urge you to please make your choices wisely.

The post George Soros Is Preparing For Economic Collapse – Does He Know Something That You Don’t? appeared first on The Sleuth Journal.


Source: Alternative news journal

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Housing Crash?: U.S. Existing Home Sales Fall By The Most In Six Years

Housing Crash?: U.S. Existing Home Sales Fall By The Most In Six Years

We just got more evidence that a major economic slowdown is underway here in the United States.  Existing home sales were down a whopping 7.1 percent during the month of February, and this represented the biggest decline that we have seen in six years.  This is yet another sign that we are in the early stages of a new crisis that is eerily reminiscent of what happened back in 2008.  The truth is that most U.S. consumers are tapped out, and when you are tapped out it is really hard to get a mortgage.  Banks aren’t really fond of lending money to people that can’t pay it back, and in recent years housing prices in many areas have risen to levels that are beyond the reach of most middle class families.

This huge decline in existing home sales is puzzling the “experts” in the mainstream media, because in recent weeks they have been breathlessly telling all of us how incredibly well the U.S. economy has been doing.  Just check out the following excerpt from a CNBC report

U.S. home resales fell sharply in February in a potentially troubling sign for America’s economy which has otherwise looked resilient to the global economic slowdown.

The National Association of Realtors said on Monday existing home sales dropped 7.1 percent to an annual rate of 5.08 million units, the lowest level since November.

It doesn’t take a genius to figure out why this is happening.  In recent months we have seen mass layoffs in the energy industry, real median household income is still way below where it was just prior to the last recession, and U.S. consumers are increasingly turning to debt in a desperate attempt to make ends meet from month to month.

If you can believe it, consumers in the United States actually accumulated more new credit card debt during the 4th quarter of 2015 than they did during the years of 2009, 2010 and 2011 combined.

To me that is an absolutely staggering statistic, and it shows how late in the game it is.

Meanwhile, there have been a whole host of other signs in recent weeks that the U.S. economy has entered a major slowdown.  The following list comes from one of my previous articles

-The U.S. oil and rig count just dropped to the lowest level ever recorded

-One Houston CEO told employees that he was laying off that we have entered a “depression

-It is being reported that 35 percent of all oil and gas companies around the world are at risk of falling into bankruptcy

-Unemployment in Canada just hit a three year high

-The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas

-U.S. manufacturing activity has been in contraction for four months in a row

-U.S. factory orders have now fallen for 15 months in a row

-Subprime auto loan delinquencies have hit their highest level since the last recession

-Orders for Class 8 trucks in the United States dropped by 48 percent on a year over year basis in January

-The Restaurant Performance Index in the United States has dropped to the lowest level that we have seen since 2008

-Major retailers all over America are shutting down hundreds of stores

The mainstream media has access to all of those numbers too.

So why do they keep trying to convince us all that the economy is doing so well?

It doesn’t make any sense.

The truth is that we are in the midst of a long-term economic collapse that has been going on for decades and that appears to be accelerating once again.

And in particular, the middle class in America has been shouldering much of the pain.  For the first time ever, the middle class is now a minority in the United States, and things get even worse for average American families with each passing year.  Here is another list from one of my previous articles

#1 This week we learned that for the first time ever recorded, middle class Americans make up a minority of the population. But back in 1971, 61 percent of all Americans lived in middle class households.

#2 According to the Pew Research Center, the median income of middle class households declined by 4 percent from 2000 to 2014.

#3 The Pew Research Center has also found that median wealth for middle class households dropped by an astounding 28 percent between 2001 and 2013.

#4 In 1970, the middle class took home approximately 62 percent of all income. Today, that number has plummeted to just 43 percent.

#5 There are still 900,000 fewer middle class jobs in America than there were when the last recession began, but our population has gotten significantly larger since that time.

#6 According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

#7 For the poorest 20 percent of all Americans, median household wealth declined from negative 905 dollars in 2000 to negative 6,029 dollars in 2011.

#8 A recent nationwide survey discovered that 48 percent of all U.S. adults under the age of 30 believe that “the American Dream is dead”.

#9 At this point, the U.S. only ranks 19th in the world when it comes to median wealth per adult.

#10 Traditionally, entrepreneurship has been one of the engines that has fueled the growth of the middle class in the United States, but today the level of entrepreneurship in this country is sitting at an all-time low.

#11 If you can believe it, the 20 wealthiest people in this country now have more money than the poorest 152 million Americans combined.

#12 The top 0.1 percent of all American families have about as much wealth as the bottom 90 percent of all American families combined.

#13 If you have no debt and you also have ten dollars in your pocket, that gives you a greater net worth than about 25 percent of all Americans.

#14 The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.

#15 An astounding 48.8 percent of all 25-year-old Americans still live at home with their parents.

#16 According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month, and nearly 47 million Americans are living in poverty right now.

#17 In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.

#18 According to Kathryn J. Edin and H. Luke Shaefer, the authors of a new book entitled “$2.00 a Day: Living on Almost Nothing in America“, there are 1.5 million “ultrapoor” households in the United States that live on less than two dollars a day. That number has doubled since 1996.

#19 46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.

#20 The number of homeless children in the U.S. has increased by 60 percent over the past six years.

#21 According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.

#22 The median net worth of families in the United States was $137, 955 in 2007. Today, it is just $82,756.

The years ahead are only going to get more difficult for the middle class as the U.S. economy continues to crumble.  The same long-term trends that have been eviscerating the middle class for decades continue to roll on, and our leaders seem powerless to do anything to stop them.

If you are reading this article, hopefully you can see what is happening and you are making preparations in advance for what is ahead.

Unfortunately, even though most Americans still remember experiencing tremendous pain during the last crisis, they refuse to prepare for the next one.

In the end, the only one that they will be able to blame is themselves.

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Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, The Most Important News, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

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Credit Card Debt In The United States Is Approaching A Trillion Dollars

Credit Card Debt In The United States Is Approaching A Trillion Dollars

For the first time ever, total credit card debt in the United States is approaching a trillion dollars.  Instead of learning painful lessons from the last recession, Americans continue to make the same horrendous financial mistakes over and over again.  In fact, U.S. consumers accumulated more new credit card debt during the 4th quarter of 2015 than they did during the years of 2009, 2010 and 2011 combined.  That is absolutely insanity, because other than payday loans, credit card debt is just about the worst kind of debt that consumers could possibly go into.  Extremely high rates of interest, combined with severe penalties and fees, can choke the financial life out of almost any family in no time at all.

These days, most Americans use credit cards for various purposes, and they can be very convenient.

And if you pay them off every single month, they don’t become a problem.

Unfortunately, a lot of people are not doing this.  According to CNBC, total U.S. credit card debt rose by an astounding 71 billion dollars last year alone…

Last year, credit card debt in the U.S. surged by approximately $71 billion to $917.7 billion, according to a new study from CardHub.com. The research also found that most of the debt accrued in 2015 came in the fourth quarter, when Americans tacked on more than $52 billion.

“With 7 of the past 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits,” CardHub CEO Odysseas Papadimitriou said in a statement.

And as noted above, things were particularly gruesome during the 4th quarter of last year.

According to Alternet, Americans added more credit card debt during those three months than during the entire years of 2009, 2010 and 2011 combined…

Not since we headed into the Great Recession of 2008 have we been quite so loosey-goosey with our credit cards, racking up debt with stunning speed. Of our 4Q totals, CardHub notes, “during this one quarter, we added more debt than in 2009, 2010 and 2011 put together.” That brings dollars owed to credit card companies by each debt-saddled American family up to $7,879, the highest since the Great Recession.

I can’t even begin to describe how unwise this is.  When I was in my twenties, I made the same mistakes that so many other Americans are making right now.  I very foolishly racked up large balances on my credit cards, and it took years of extremely painful payments to fix those mistakes.

In America today, 37 percent of all households maintain credit card balances from month to month, and the average level of credit card debt for those households is $15,700.  The following comes from CBS Minnesota

According to NerdWallet, 37 percent of American households have credit card debt, which is defined as not paying off the full balance every month. Using data from the Federal Reserve of New York, U.S. Census and its own poll, NerdWallet found the average balance for those in credit debt is $15,700.

What most people don’t realize is that by letting balances run from month to month, you can end up paying just about as much in interest as you did for the original purchases.

Here is one credit card repayment scenario that comes from NerdWallet

For the sake of simplicity in calculating the cost of the average credit card debt, let’s assume an APR of 16% and a fixed payment. We’ll also assume a minimum payment of 2% of the principal balance of $15,762, the average as of the end of 2015, or $315.

Based on those terms — and assuming you don’t add any more to your credit card balance — it would take 84 months, or seven years, to pay off the balance in full. During that time, you’ll pay $10,402 in interest — about two-thirds of the original balance — for a total of $26,164. This averages out to about $124 in interest per month.

The scenario above assumes that all payments are made on time.  But a single late payment can trigger higher interest rates, penalties and fees that can be absolutely suffocating.

In fact, some people end up paying back three, four or five times as much as they originally borrowed to the credit card companies.

If you use credit cards for convenience or to buy things online or to automatically pay bills, that is fine.  Just don’t let balances accumulate.  As you can see, that can be financial suicide.

And as we head into a new global recession, you definitely don’t want to be saddled with high levels of debt.  All of us have little luxuries that we can cut back on, and now is not the time to be living on the financial edge.

Just look at some of the troubling signs that we have seen in the news in recent days…

-The U.S. oil and rig count just dropped to the lowest level ever recorded

-One Houston CEO told employees that he was laying off that we have entered a “depression

-It is being reported that 35 percent of all oil and gas companies around the world are at risk of falling into bankruptcy

-Unemployment in Canada just hit a three year high

-The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas

-U.S. manufacturing activity has been in contraction for four months in a row

-U.S. factory orders have now fallen for 15 months in a row

-Subprime auto loan delinquencies have hit their highest level since the last recession

-Orders for Class 8 trucks in the United States dropped by 48 percent on a year over year basis in January

-The Restaurant Performance Index in the United States has dropped to the lowest level that we have seen since 2008

-Major retailers all over America are shutting down hundreds of stores

And this list does not even include all of the signs of severe economic trouble from around the rest of the planet that I have been writing about lately.

Credit card debt truly is financial poison, and it is not something that you want to have during the hard times that are coming.

Unfortunately, most Americans never learn, and they continue to rack up credit card debt as if there is no tomorrow even as the global economy starts to spiral downhill all around them.


Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, The Most Important News, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

The article Credit Card Debt In The United States Is Approaching A Trillion Dollars published by TheSleuthJournal – Real News Without Synthetics


Source: Alternative news journal

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