No Recovery in Sight: 40 Statistics which Confirm the Collapse of the U.S. Economy

Unfortunately, that is not anywhere close to the truth. What we are now witnessing are the early stages of the complete and total breakdown of the U.S. economic system. The U.S. government, state governments, local governments, businesses and American consumers have collectively piled up debt that is equivalent to approximately 360 percent of GDP. At no point during the Great Depression (or at any other time during our history) did we ever come close to such a figure. We have piled up the biggest mountain of debt that the world has ever seen, and now that gigantic debt bubble is beginning to pop. As this house of cards comes crashing down, the economic pain is going to become almost unimaginable.

Unemployment is at shockingly high levels. Foreclosures and personal bankruptcies continue to set new all-time records. Businesses are being shut down at a staggering rate, more than 40 million Americans are on food stamps, and the U.S. government continues to pile up debt at blinding speed.

The following are 40 statistics that reveal the truth about the collapse of the U.S. economy….

1 – According to one shocking new survey, 28% of U.S. households have at least one member that is looking for a full-time job.

2 – A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.

3 – There are 9.2 million Americans that are unemployed who are not receiving an unemployment insurance check.

4 – In America today, the average time needed to find a job has risen to a record 35.2 weeks.

5 – According to one analysis, the United States has lost 10.5 million jobs since 2007.

6 – China’s trade surplus (much of it with the United States) climbed 140 percent in June compared to a year earlier.

7 – This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

8 – According to a poll taken in 2009, 61 percent of Americans “always or usually” live paycheck to paycheck. That was up significantly from 49 percent in 2008 and 43 percent in 2007.

9 – According to a recent poll conducted by Bloomberg, 71% of Americans say that it still feels like the economy is in a recession.

10 – Banks repossessed 269,962 U.S. homes during the second quarter of 2010, which was a new all-time record.

11 – Banks repossessed an average of 4,000 South Florida properties a month in the first half of 2010, up 83 percent from the first half of 2009.

12 – According to RealtyTrac, a total of 1.65 million U.S. properties received foreclosure filings during the first half of 2010.

13 – The Mortgage Bankers Association recently announced that demand for loans to purchase U.S. homes has sunk to a 13-year low.

14 – Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

15 – 1.41 million Americans filed for personal bankruptcy in 2009 – a 32 percent increase over 2008.

16 – Back in 1950 each retiree’s Social Security benefit was paid for by 16 workers. Today, each retiree’s Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projectedthat there will be approximately two workers for each retiree.

17 – According to a new poll, six of 10 non-retirees believe that Social Security won’t be able to pay them benefits when they stop working.

18 – 43 percent of Americans have less than $10,000 saved for retirement.

19 – According to one survey, 36 percent of Americans say that they don’t contribute anything to retirement savings.

20 – According to one recent survey, 24% of American workers say that they have postponed their planned retirement age in the past year.

21 – The Conference Board’s Consumer Confidence Index declined sharply to 52.9 in June. Most economists had expected that the figure for June would be somewhere around 62.

22 – Retail sales in the U.S. fell in June for a second month in a row.

23 – Vacancies and lease rates at U.S. shopping centers continued to get worse during the second quarter of 2010.

24 – Consumer credit in the United States has contracted during 15 of the past 16 months.

25 – During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

26 – Things are now so bad in California that in the region around the state capital, Sacramento, there is now one closed business for every six that are still open.

27 – The state of Illinois now ranks eighth in the world in possible bond-holder default. The state of California is ninth.

28 – More than 25 percent of Americans now have a credit score below 599, which means that they are a very bad credit risk.

29 – On Friday, U.S. regulators closed down three banks in Florida, two in South Carolina and one in Michigan, bringing to 96 the number of U.S. banks to be shut down so far in 2010.

30 – The FDIC’s deposit insurance fund now has negative 20.7 billion dollars in it, which represents a slight improvement from the end of 2009.

31 – The U.S. federal budget deficit has topped $1 trillion with three months still to go in the current budget year.

32 – According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.

33 – The M3 money supply plunged at a 9.6 percent annual rate during the first quarter of 2010.

34 – According to a new poll of Americans between the ages of 44 and 75, 61% said that running out money was their biggest fear. The remaining 39% thought death was scarier.

35 – One study found that as of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

36 – The bottom 40 percent of all income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

37 – The number of Americans with incomes below the official poverty line rose by about 15%between 2000 and 2006, and by 2008 over 30 million U.S. workers were earning less than $10 per hour.

38 – According to one recent study, approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.

39 – For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.

40 – A new Rasmussen Reports national telephone survey has found that just 23% of American voters nationwide believe the federal government today has the consent of the governed.

“Unregulated Greed has Destroyed the Capitalist System”: The Big Things That Matter And The Little Things That Annoy

I write about major problems: the collapsing US economy, wars based on lies and deception, the police state based on “the war on terror” and other fabrications such as those orchestrated by corrupt police and prosecutors, who boost their performance reports by convicting the innocent, and so on. America is a very distressing place. The fact that so many Americans are taken in by the lies told by “their” government makes America all the more depressing.

Often, however, it is small annoyances that waste Americans’ time and drive up blood pressures. One of the worst things that ever happened to Americans was the breakup of the AT&T telephone monopoly. As Assistant Secretary of the US Treasury in 1981, if 150 percent of my time and energy had not been required to cure stagflation in the face of opposition from Wall Street and Fed Chairman Paul Volcker, I might have been able to prevent the destruction of the best communications service in the world, and one that was very inexpensive to customers.

The assistant attorney general in charge of the “anti-trust case” against AT&T called me to ask if Treasury had an interest in how the case was resolved. I went to Treasury Secretary Don Regan and told him that although my conservative and libertarian friends thought that the breakup of At&T was a great idea, their opinion was based entirely in ideology and that the practical effect would not be good for widows and orphans who had a blue chip stock to see them through life or for communications customers as deregulated communications would give the multiple communications corporations different interests than those of the customers. Under the regulated regime, AT&T was allowed a reasonable rate of return on its investment, and to stay out of trouble with regulators AT&T provided excellent and inexpensive service.

Secretary Regan reminded me of my memo to him detailing that Treasury was going to have a hard time getting President Reagan’s economic program, directed at curing the stagflation that had wrecked President Carter’s presidency, out of the Reagan administration. The budget director, David Stockman, and his chief economist, Larry Kudlow, had lined up against it following the wishes of Wall Street, and the White House Chief of Staff James Baker and his deputy Richard Darman were representatives of VP George H.W. Bush and did not want s substantial Reagan success that would again threaten the Republican Establishment’s hold over the party. Baker and Darman wanted to be sure that George H. W. Bush, and not Jack Kemp, succeeded Ronald Reagan, and that required a muted Reagan success that they could claim as theirs for moderating an “extremist” program.

I told Secretary Regan that if I had another deputy assistant secretary, I could reach a reasonable conclusion whether the breakup of AT&T was sensible. He replied that he was sure that was the case, but that once I had three deputies the headlines in the Washington Post and New York Times, Business Week, Newsweek, and so on, would be: “Supply-sider builds empire at Treasury.” He said it would sink me and that without me he could not get the President’s economic program out of the President’s administration. “Which do you want to do,” he asked, “save AT&T or cure stagflation?”

Curing stagflation gave America twenty more years. Ironically, the good times started to erode when Reagan’s other goal was accomplished and the Soviet Union dissolved in 1990. “The end of history” resulted in India and China opening their labor markets to American capitalists, who began producing offshore with foreign labor the products that they sold to Americans. The labor costs savings pushed up corporate profits, shareholders’ returns, and managerial bonuses. But it deprived Americans of middle class incomes and wrecked the balance of trade. The US income distribution and the trade deficit worsened.

Many progressives blame the worsening income distribution on the Reagan tax rate reductions, but the real cause is the offshoring of manufacturing, industrial, and professional service jobs, such as software engineering.

None of us in the Reagan administration foresaw jobs offshoring as the consequence of Soviet collapse. We had no idea that by bringing down the Soviet Union we would be bringing down America. During the Reagan years India was socialist and would not allow foreign corporations, had they been interested, to touch their labor force. China was communist and no foreign capital could enter the country.

However, once the Soviet Union was gone from the earth, the remaining socialist and communist regimes decided to go with the winners. They opened to Western corporations and sucked jobs out of the developed West.

But this is a different story. To get back to deregulation, nothing has worked for the consumer since deregulation. Deregulation permitted corporations to impose their costs of operation on customers without having to send them a bill. For example, corporations use voice recognition technology to keep customers from salaried customer representatives. I remember when a customer with a problem could call a utility company or bank and have the problem immediately corrected.

No more. There was an error in my phone bill today, which I had corrected without result on two previous occasions. As everyone knows by now, it takes 10-15 minutes, usually, to get a live person who can actually fix the problem. After listening to sales pitches for 12 minutes, I got a live person. Once the problem was understood, it was pronounced to be an upper level problem out of his hands. I waited another 10 minutes while he tried to reach a superior who had the code to fix the problem that the phone company had produced in my account. The entire time I listened to product advertisements.

How many times has this happened to you?

Whoever invented these artificial voice capabilities is the enemy of mankind. Whomever a customer calls–utilities, credit card companies, banks, whatever, the customer gets a voice machine. Some voice machines never tell the customer how to get a live person who can, on occasion, actually fix the problem.

In my opinion, the strategy behind the endless delays is to cause the customers to give up, slam the telephone down and play the higher incorrect bill as it is cheaper in time and frustration to correcting the problem and being billed in the correct amount. These ripoffs of the customer are produced by Wall Street pressures for higher earnings.

The frustrations, of course, multiply when one reaches an offshored service somewhere in the Third World. The incentive is to hang up and to pay the excessive bill so that phone, internet, or credit card services are not cut off

Had Don Regan and I known that the high speed Internet was in our future and that American corporations would use it to destroy the jobs traditionally filled by US university graduates, possibly we would have decided to save the regulated telephone monopoly and to deliver the economy over to stagflation.

The reason is that sooner or later something would have been done about stagflation, but nothing whatsoever has been done about offshoring. Saving the economy from offshoring would have been a greater achievement than saving the economy from stagflation. However, in my time stagflation, not offshoring, was the problem.

I regret that I did not have a crystal ball.

Deregulation proponents will say that the breakup of AT&T gave us cell phones and broadband, as if foreign regulated communication companies and state monopolies do not provide cell phone service or high speed Internet connections. I can remember attending corporate board meetings years ago at which the European members had digital cell phones with which they could call most anywhere on earth, while we Americans with our analogue cell phones could hardly connect down the street.

What deregulation did was to permit Wall Street to push the deregulated industries– phone service, airlines, trucking, and later Wall Street itself– to focus on profits and not on service. Profits were increased by curtailing service, by pushing up prices and by Wall Street creating fraudulent financial instruments, which the banksters used America’s reputation to market to the gullible at home and abroad.

Consider air travel. Admit it, if you are my age you hate it. The deterioration in service over my lifetime is phenomenal. Studies in favor of airline deregulation focused on short flights between A and B and concluded that small airlines serving high density areas were more efficient because they were not regulated. What was left out of the analysis is that regulated airlines served low density areas and permitted free stopovers. For example, if one was flying from the US to Athens, Greece, the traveler could stopover in London, Paris, and Rome without additional charges. Moreover, passengers were fed hot meals even in tourist class. In those halcyon days, it was even possible to travel more comfortably in tourist class than in first class, because flights were not scheduled in keeping with full capacity. Several rows of seats might be unoccupied. It was possible to push up the arm rests on three or four center aisle seats, lay down and go to sleep.

Perhaps the best benefit of regulated air travel for passengers was that airlines had spare airliners. If one airplane had mechanical problems that could not be fixed within a reasonable time, a standby airliner was rolled out to enable passengers to meet their connections and designations. With deregulation, customer service is not important. The bottom line has eliminated spare airliners.

With deregulated airlines, Wall Street calls the tune. If your flight has a mechanical problem, you are stuck where you are unless you have some sort of privileged status that can bump passengers from later fully booked flights. “Studies” that focus only on discounted ticket price omit major costs of deregulation and thereby wrongly conclude that deregulation has benefited the consumer.

When trucking was regulated, truckers would stop to provide roadside assistant to stranded travelers. Today, with deregulated trucking, every minute counts toward the bottom line. Not only do truckers no longer stop to aid stranded travelers, they travel at excessive speeds that endanger automobile drivers. Trucks have expanded in size, weight and speed. Trucks raise the stress level on interstate highway drivers and destroy, at taxpayers expense, the roads on which they travel.

Conservatives and especially libertarians romanticize “free market unregulated capitalism.” They regard it as the best of all economic orders. However, with deregulated capitalism, every decision is a bottom-line decision that screws everyone except the shareholders and management.

In America today there is no longer a connection between profits and the welfare of the people. Unregulated greed has destroyed the capitalist system, which now distributes excessive rewards to the few at the expense of the many.

If Marx and Lenin were alive today, the extraordinary greed with which Wall Street has infected capitalism would provide Marx and Lenin with a better case than they had in the 19th and early 20th centuries.

Paul Craig Roberts is a frequent contributor to Global Research.

Countdown to Financial Collapse: The Economic Recovery is Not Recovering

Financial journalist Charles Gasparino whose career trajectory took him from Newsweek to CNBC to Fox News was on with Bill O’ Reilly doing what the host of the factless Factor likes to do the most: promote Fox News. In the course of their self-promotional banter, Gasparino let sip an unverifiable story about a meeting of top CEOs speculating about whether President Obama really is a secret Socialist.

Stories like this, invented or not, freak a White House ever eager to reassure the business world of their loyalties. That is no doubt why Robert Gibbs, the President’s Press Secretary took a whack at the “professional left,” a statement he later said had been “inartful” but did not withdraw.

Writing on OpEd News, Kevin Gosztola was not surprised:

“While circumstantial, the best evidence for why Gibbs would feel like uttering the aforementioned remarks is the shift of money from Wall Street to Republicans ahead of the election… The Democrats earned 57 percent of campaign contributions from securities and investment industries.

The situation compels the Obama Administration, especially White House press secretary Gibbs, to whip the left and the sections that are most listened to by voters into line not only because money from business interests needs to swing back the other way but because disappointed and disillusioned voters will likely stay home, not donate to Democratic Party campaigns, not make phone calls, and refuse to go door-to-door canvassing prior to Election Day if they do not fall in line.”

According to a preliminary analysis, the Center for Responsive Politics reports that “individuals and political action committees linked to the financial and real estate sectors swung hard to the Republicans with their giving since last year….

In March 2009, 70 percent of money from the sector went to the governing party, but by this summer, 68 percent was going to the opposition, as Democrats fought to pass some version of a financial overhaul.”

The motivation for Gibbs’ remarks may or may not be tied to signaling Wall Street but the deeper truth is that everyone, right and left alike, seem frustrated and at the same time powerless to check the continuing economic decline.

The private sector is not creating jobs. The GOP is blocking the government from doing more stimulus programs while the system seems to be unraveling. All the talk of cutting deficits by conservatives or ending tax cuts by liberals will not give the economy the boost it needs. There is a paralysis of analysis and a stalemate.

The markets were more freaked by the recent pessimism oozing from the Fed than any partisan punditry. The slowdown they are worried about has already doomed any heavily-hyped “recovery.”

And the public knows it, according to the recent polls.

What’s worse is the tea leaves offer few signs of a turnaround any time soon even if General Motors is selling more cars—many, may we be reminded, in China. (The GM CEO who last week took a nasty ingrate smack at GM being perceived as “Government Motors,” demanding the government sell all of its shares, has just announced he is leaving! I wonder why?)

The Carlysle Group is taking over while the automaker launches a new program of subprime lending, the very predatory dealmaking that got them in trouble in the first place.

Does anyone ever learn from history, or care about how communities are being destroyed as a financial crisis becomes a social crisis at the grass roots level?

Check out what happened at that mall in Atlanta where thousands of people nearly rioted to get on a public housing waiting list. The Congress returned from its recess to pass new monies to keep teachers teaching and cops patrolling. They did so by slashing food stamps so the unemployed and poor –some 41 people who rely on them—will have to cut back further.

What a trade-off.

As for insuring the stability of an increasingly volatile system, will the new financial reforms make any difference? It doesn’t look like it. The New York Times reported, “As Wall Street scrambles to find the best and most profitable way to operate under the new financial reform law, Goldman Sachs Group Inc. — the firm that was expected to suffer the most under the legislation — could emerge practically unscathed…

“…we think we are well positioned to be a market leader under the new rules,” said Jack McCabe, co-head of Goldman’s derivatives clearing service business.

Richard Bove, a bank analyst at Rochdale Securities, said he had changed his view of the law’s effect on Goldman.

“I thought this company was going to be really harmed by this bill; now I’ve figured out that it’s not going to happen,” he said. “They should win big here.”

That’s Goldman’s reason to celebrate its “big win” What about the others? The truth is we will not know for a awhile, for a long while, for many, many years. So much for any sense of urgency even after former Fed Head Paul Volcker said we are running out of time.

Bloomberg News explained why,

“Many of the measures ordered by Congress and global regulators, aimed at cushioning the financial system in future crises, are years away from being implemented. The Basel Committee on Banking Supervision plans to give the world’s banks until 2018 to comply with limits on how much they can borrow. Parts of the Volcker rule, a provision of the new Dodd-Frank Act that would force firms to cut stakes in in-house hedge funds and private-equity units, may not go into effect for a dozen years…

“Based on our experience of government’s ability to execute these things effectively and in a timely way, we are almost uncovered now from any future financial risk for at least another 8 or 10 years, and that’s a little scary,” said Roy Smith, finance professor at New York University’s Stern School of Business and a former banker at Goldman Sachs Group Inc

Economist Nouriel Roubini, one of the first to forecast our crisis, worries that major economies in Europe are at risk and could fall. At the same time I am reading articles that contend, “The US is more bankrupt than Greece.” Another reports the IMF saying the US is bankrupt but most Americans don’t know it.

What else don’t we know?

At the same time, the folks who brought us this crisis are still riding high, making multi-million dollar “settlements’ to cover up fraudulent practices. In recent weeks, Goldman Sachs, Countrywide and, now, Wells Fargo have just done that in part to avoid prosecutions.

Their CEOs are going on vacation to spend their ill-gotten gains, not to jail to pay for their crimes. And the “professional left”—whatever that is supposed to be—is more pissed at Robert Gibbs blathering at that podium than the banksters maneuvering behind the scenes.

Can anyone tell me what’s wrong with this picture?

Just one footnote: In this week of growing economic despair, an 81 year old senior citizen named Bernard Stone stood outside the unemployment office in Harlem with a flyer of his own making calling on President Obama to issue an executive order closing all American-owned factories outsourcing jobs. If they don’t do it, their executives should, he suggests, lose their citizenship and be deported to the countries to which they exported American jobs.

“The hundred or so people who read my leaflet liked that part,” he told me.

News Dissector Danny Schechter directed the film Plunder The Crime of Out Time to investigate the financial crisis as a crime story.

World War III Scenario?

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Instability on the World’s Financial Markets: Personal and Corporate Bankruptcies are Roaring with no End in Sight

It was only a month ago that the Dow closed at 9686. From there it started to move back up again as insiders learned of the Fed’s plan to inject $5 trillion into the economy over the next two years. The result has been a run up to 10,674. We figured out what the Fed was up to, but most everyone else did not.

During that period, almost unnoticed, was the fall in the value of the dollar. On the USDX it has fallen from 86.12 to 80.58.

This is a very good example of the Federal Reserve and the Treasury Department feeding inside information to their friends on Wall Street. This has gone on for 60 years or more, and it puts many professionals and the public at a vast disadvantage. If you then include the market intervention and cross manipulation of the President’s Group on Financial Markets,” you have a totally stacked deck. Needless to say, the SEC and the CFTC are nowhere to be found. That is because they are an integral part of the manipulations, just by looking the other way. The market has rallied because key players in the banking and brokerage areas knew what was in the works, more massive stimulus. Had not the Fed made such a decision, which four weeks later has not been as yet announced, the market would not have rallied, it would have fallen, and the perception of an economic recovery would not exist.

We are back where we were 19 months ago before the stimulus package and the Fed’s injection of capital of some $2.3 to $2.5 trillion. The projection now is $2.5 trillion each year to be injected annually for the next two years. There has been no move toward capital to assist small- and medium-sized businesses into expanding and hiring. Over the past 15 months loans to these companies have been cut by more than 25%, the antithesis of real recovery. Government’s answer to that was to extend unemployment benefits by another $34 billion. Banks are still carrying two sets of books with the blessing of the administration, the Bank for International Settlements, the BIS, and the international accounting group, the FASD. Most of these financial entities are still broke. That in part is borne out by the fact that half of the TARP funds haven’t been returned. TARP was the Fed subsidy, mostly to the financial sector, that allowed them to make money with cheap money and leverage, as the public was left to languish. It was only a month ago that banks began again to lend for automobile purchases, the result of which was an increase in sales of 15% recently. Government pressure on the lenders to make more subprime loans allowed the manufactures to increase sales. The sales recovery is underway and that is the reason why.

The existence of two sets of books has allowed American and European corporations to avoid writing off losses and declaring bankruptcy. At the same time American firms borrowed $289 billion in the first quarter taking their total domestic debt to $7.2 trillion, the highest in history. Yes, corporate America has record amounts of cash, because they borrowed it. That is up $1.1 trillion in three years. This is just the debt of the non-financials that represent the better performing part of the economy. The financial sector and the banks are the walking dead. The debt of these non-financials equals 50% of GDP, another record. Over the past six months we have seen a large inventory buildup, which means the cash figure could be considerably lower now. That inventory has to be sold over the next six months in a slowing economy. Of course, there is $1.5 trillion sitting in the Cayman Islands, but if that is brought home a 35% tax has to be paid, or 39.5% if the previous tax cuts are abandoned. That is almost $600 billion in taxes, which would go a long way to reducing the budget deficit. We should have legislation to bring those funds home. The tax avoidance is anti-America. This advantage, if ended, would in part cause transnational conglomerates to bring production and jobs back to our country. The entire concept of non-financial corporations have lots of cash is a scam. There are few healthy balance sheets. This situation has nothing to do with politics and everything to do with lying and greed.

Wall Street, banking and government know there has to be action by the Fed and or the legislature to re-liquefy the economy or it collapses. The concept of funding banks and corporations that are too big to fail has so far failed. These elitist entities should have been and now should be allowed to fail. This has nothing to do with saving America and everything to do with keeping Illuminist control of our economy in tact. This is the basic cause of America’s problems. These are the people who created this situation in the first place. If you noticed there is absolutely no pursuit of solutions and the underlying cause if fed more money and credit like a vampire is fed blood.

As we said in the last issue most of the funds deposited at the Fed by banks are loans interest free from the Fed to the banks. The money is re-lent to the Fed at 2-1/2% interest paid by the taxpayer. These are sterilized funds held by insolvent banks. If the Fed’s interest is halted the banks either repay the loan or get exposed to failure or they lend the $1 trillion invigorating the economy and monetize those funds causing higher inflation.

Personal and corporate bankruptcies are roaring with no end in sight. Credit cards are being paid down, savings are at 3% and retail sales are close to flat. In the last nine years, 8 million jobs have been lost to free trade and globalization and 5.3 million to the depression with no end in sight.

Right on cue the head of PIMCO tells us there is a significant risk of falling into deflation. This is the same song we heard before the last stimulus package and the Fed told us deflation was going to be a repeat of the 1930s in order to justify a massive injection of money and credit. The experts now tell us that there is a 25% chance of deflation and we had best do something about it quickly. The word is there is downward pressure on prices, which is totally untrue, and that is why firms are accumulating cash. They are really accumulating cash to build up their balance sheets. This is the same dog and pony show we saw two years ago. The trend of this direction began a couple of weeks ago by St. Louis Fed Chief James Bullard. It’s all conditioning and mind control. The change is justified by bogus government statistics.

It was just some 50 years ago that the SDR, the Special Drawing Right, was created by the IMF. After being put into use in the late 1960s as an alternative to gold, it was essentially abandoned.

A new IMF study calls for the use and re-issuance of the SDR, another product of the Keynesian wonderland. This time in the form of bancor, a new global currency to be designed as a stable store of value for the world economy – the currency to be put into play to save the financial world. This, needless to say, was one of Keynes ideas introduced after WWII. We never got bancor, instead we got a partially gold backed dollar that became a fiat currency on August 15,1971. It only took 23 years to destroy the dollar.

The resultant credit crisis of the past few years has proven that the dollar no longer brings stability to the financial system. Like many other sovereign countries its currency is unstable. That has caused the one-worlders at the IMF to bring back two losers, the SDR and bancor, both of which would be entirely un-backed currencies. As a result users continue to look at the dollar’s exponential accumulation of debt, and wonder where do we go from here. Of course, the real choice is gold, but gold brings sound, honest money and they couldn’t have that. Fractional banking of 9 to 1, or 40 to 1 or even 70 to 1 that we have seen in recent years, would be out of the question. That would kill those massive profits gleaned from the uneducated, unsuspecting public. As a result we have a lending logjam as lenders hoard cash for fear of another financial collapse. As we explained over the past several weeks this practice will end because it hurts the economy, retards growth and feeds the depression.

We can just imagine what a Keynesian driven IMF – SDR or bancor would entail, probably massive deficit spending on projects to enslave more of the world’s population. Such a system would rob nations of sovereignty relieving them of any national budgetary control. We could call this international corporatist regulatory control by the few who know best what is good for you. Such a fiat paper system would be the antithesis of a gold or silver based system. With such control would come social and political control by elitists who believe that the world is over populated. They in turn would cull the useless eaters from this brave new world. There is nothing positive in a world currency. The results are all negative. Keep in mind though this is what these Illuminists want and they could care less what you want.

There is no question there is going to be a global shift away from the dollar. In retrospect we saw the Wall Street criminal syndicate go long the dollar and short the euro ten months ago based on the exposure of Greece and others in the euro zone. They sold their long dollar position and covered their short euro positions with massive profits. That was only part of their goals. The other was to pad the dollar to the upside, because they knew then that the $2.5 trillion government and Fed stimulus was not going to last and that the dollar would be negatively affected. As a result profit taking initially took the dollar lower and that now the dollar is falling as everyone finds out, as we predicted, that there will be another massive package of money and credit injected into the system. Keep in mind as well that the Wall Street insiders probably went short the dollar and long the euro in that process. These are the things the public cannot see in the market that we do, but then again they haven’t been at this for over 50 years. We are definitely headed for a test of 74 on the USDX, which was last seen at 80.38. The question is where do nations go regarding currency. Gold is the natural answer. The decoupling of gold from the dollar is 15 months old. We believe the continuing relationship is 20%; others say 50%. The point is gold is strong because it is being considered the currency alternative to the dollar and well it should be. Unfortunately, the elitists will fight that move all the way to defeat. Gold keeps them honest and without the leverage they want on all their rigged deals. The financial fraud will continue led by JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America. They will continue to work toward a world government and a one-world currency. It is up to you to stop them at the ballot box in November by defeating almost all of the Incumbents. If you do not this is what you can expect.

Bob Chapman is a frequent contributor to Global Research. Global Research Articles by Bob Chapman

Washington Policy May Result in Nuclear War, Says Castro

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via Washington Policy May Result in Nuclear War, Says Castro.