Saturday, April 30, 2011

ExxonMobil’s earnings: The real story you won’t hear in Washington

by Ken Cohen
April 28, 2011

Big numbers make headlines – like our announcement of $10.7 billion in earnings for the first quarter of 2011. What may not make the headlines is the context surrounding that number, so I thought I would share with you what I told reporters following the announcement:

When crude oil prices increase it means higher earnings for oil companies, and more importantly for most Americans – higher gasoline prices. Rising crude and gasoline prices have a very real impact on household budgets across the nation. Gasoline is an essential product, and price rises are felt by families and businesses alike.

Let me start by putting our earnings into context for U.S. motorists.

ExxonMobil’s earnings are from operations in more than 100 countries around the world. During the first quarter, more than three-quarters of our operating earnings came from outside of the United States.

The part of ExxonMobil’s business that refines and sells gasoline, diesel and other products in the United States represents less than 6 percent – or 6 cents on the dollar – of our earnings.

Why so little? Because we actually buy more crude oil to refine into gasoline and diesel in the U.S. than we produce ourselves. And these purchases are made on the open market at the prevailing rates.

During the first three months of this year, for every gallon of gasoline and other products we refined and sold in the United States, we earned about 7 cents. Compare that to the 40 to 60 cents per gallon that went from gasoline consumers to the government (state and federal) in gasoline taxes.

The underlying question people are asking is: Why are oil prices so high at the present time? The answer to this question is important because the price of crude oil accounts for most of the price of gasoline.

There are several factors involved in the rise in oil prices.

First, as a result of the global economy strengthening – particularly in countries like China, India and Brazil – demand for crude oil is on the rise.

Second, political instability in some oil-producing regions is contributing to uncertainty about future oil supplies. Oil markets are well-supplied today, but the issue is this: What will it cost to replace this supply if it is lost in the future? This uncertainty about tomorrow is reflected in prices today.

Finally, another factor behind higher oil prices is unique to the United States. And that’s the weak U.S. dollar. Oil and most other food and industrial commodities are invoiced in dollars. Accordingly, when the dollar goes “down” the price of primary commodities tend to go “up,” and vice versa.

The dollar is at a three-year low against other currencies and is approaching the record low which occurred in 2008, when oil prices were at historically high levels.

The dollar’s decline accelerated last week after a warning by Standard & Poor’s about the country’s $14.3 trillion debt and economic weakness compared to other countries.

So these factors all combine to drive oil prices up.

What is our government doing about it? Unfortunately, they’re reaching for the political playbook rather than seeking real solutions.

We understand that it’s simply too irresistible for many politicians in times of high oil prices and high earnings – they feel they have to demonize our industry.

Predictably last week the Administration established a task force to investigate oil and gas markets, now a time-honored tradition when prices increase.

And we’re seeing a return to the now-familiar misinformation about the oil industry’s taxes.

Over the last week as earnings season has approached, the Democratic Party leadership again talked about removing what they call $4 billion in oil industry subsidies. But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy. The simple truth is that these are legitimate tax provisions to keep U.S. industry internationally competitive – to keep jobs from being exported to other countries.

Unfortunately, this false discussion about oil industry subsidies also reinforces another falsehood making the rounds: that ExxonMobil doesn’t pay its fair share of income taxes in the United States.

Let me state it unequivocally. Last year, our total taxes and duties to the U.S. government were $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.

And during the first quarter of this year, we incurred tax expenses in the United States of more than $3.1 billion on U.S. earnings of $2.6 billion.

So we have seen the predictable political positioning but no action to actually help bring down energy prices. In fact the government has chosen not to help increase supply by refusing to open up the vast energy resources in this country that are off limits to our industry.

We have seen exploration and development in the U.S. Gulf of Mexico – which accounts for 30 percent of all U.S. crude oil production – effectively banned for the past year by the Obama Administration.

In addition, legislation was enacted targeted at restricting the supply of oil from Canada – a country whose oil reserves are second only to Saudi Arabia’s.

Unfortunately, irresistible sound-bite politics rather than sound public policy is dominating the energy agenda in Washington – but there is one reason for optimism about America’s economic and energy security.

That optimism lies in America’s extraordinary natural gas endowment. This resource is providing the United States with an enormous economic advantage as a result of American ingenuity and innovation.

It’s nothing short of revolutionary that our industry has recently unlocked more than a 100 years’ worth of natural gas right here in the United States. And at some of the world’s lowest prices – last month natural gas was selling for 40 percent less in the U.S. than in Europe.

Think of the advantages this is already providing – in the form of power generation and fuel for manufacturing and other industries, not to mention the jobs and taxes natural gas production creates.

But there are concerns that political overreaction to a small number of isolated environmental issues could jeopardize this emerging industry and the benefits it provides.

Government policies did not cause the shale gas revolution in this country – but they could stop it in its tracks.

Policymakers need to look carefully at the facts and avoid a bias against natural gas and fossil fuel development in favor of far more costly energy sources that are already receiving massive subsidies.

In fact, we’ve already spent more on alternative energy subsidies than we did on the Manhattan and Apollo projects combined. And what do we have to show for it? Unreliable and uneconomic energy sources that still can’t compete – even at today’s prices.

On the other hand, natural gas is affordable, available – and doesn’t need taxpayer subsidies.

The technologies and industrial processes involved in developing shale gas are proven – the industry has successfully fracked more than a million wells over the last 60 years. There are thousands of feet of rock between the natural gas deposit where the fracking takes place and the water table.

Risk to water supplies and air quality can be and are being mitigated by using proper well design, operating with care and following industry best practices and procedures that are all subject to regulation and government oversight.

When these technologies are applied properly and the industry remains focused on operational integrity, we can protect our environment and public health and enjoy this unprecedented economic advantage.

Energy policy should enable safe and environmentally responsible development of all of America’s natural resources, which will support economic recovery and improved quality of life.

It’s time for our leaders to stop playing politics with the energy industry and to start working for solutions that will take the pressure off household budgets and enhance our energy security.

Thursday, April 28, 2011

VIDEO: Chinese Corporate Fascism Will Rule The World By 2016 As America Collapses Into Bankruptcy, Hyperinflation, Police State And Street Riots

No Buyers for Treasuries or Toxic Waste

The International Forecaster
by Bob Chapman
April 27, 2011

We believe there will be something similar to a QE3 by another name and the Fed will probably have to create some $2.5 trillion to buy Treasuries, Agencies, and toxic waste and perhaps inject funds into the economy. Japan certainly won't be a buyer and probably will be a seller. China has indicated that they won't be purchasers in the future either. The question also arises concerning the continued purchase of these securities by countries in the oil producing Gulf States, which are in turmoil. The three countries make up 45% of Treasury purchases. As we pointed out in previous issues the second half of 2011 should be monstrous. Even if the fed buys all the Treasury and Agency bonds they'll still have to deal with a lower dollar and high inflation. Then there is high unemployment and raging gold and silver prices. There is also the question of US debt, federal, state and municipal debt, along with wars in the Middle East and North Africa. How many US Treasuries will Japan have to sell and how deeply will its slowdown effect American industry? As you can see America has much to contemplate.

The creation of monetary inflation will last at least two more years. Its end will only come when the Fed takes its foot off of the pedal. Like almost zero interest rates this policy cannot be allowed to stop. The system cannot function without it. The whole concept of throwing money at a problem simply doesn't work and the elitists know this only too well.

Monetary and fiscal creations are not the only mistakes being made by the Fed and our Congress. US and world markets are being subjected to non-stop manipulation. This corruption has destroyed all free markets. Stock and bond markets are supported and gold, silver and commodities attacked. Fortunately markets now recognize what the elitists are up too and each time they interfere they lose a little more power. It points up that a criminal syndicate is running our country. These tactics are used to extend the looting period allowing further harvesting of elicit profits. The US and many other nations have been allowed to live beyond their means for many years and that condition is being brought to a conclusion. This, of course, is very true of the US due to the dollar being the world's reserve currency. That is changing, as nations want this unfair advantage ended, especially in view of the fact that the American government and financial community have so abused their privilege.

The profits of the military industrial complex continue to flourish as we have war after war. We notice that both parties are willing to cut spending on Social Security and Medicare, but they refuse to cut military spending, the most expensive item on the budget at 26%. Our government has billions for Fannie Mae, Freddie Mac, Ginnie Mae, the FHA, the FICA and the worthless SEC and CFTC, but no cuts for the average American.

As zero interest rates rule one form or another of money and credit creation continues as it has for the past 11 years. The game is the same, it is just the name has changed. The process of wealth destruction is still in progress and only the select few get to keep their ill-begotten riches. The Fed's balance sheet over the next 1-1/2 years should reach over $5 trillion.

On this process real interest rates will creep higher, toxic securitized mortgage bonds will fall lower, as the housing market sinks to new lows not able to break out of its death spiral.

We find it of great interest but not surprising that the $5 trillion mortgage bond fraud, after three years, has no prosecutions, or even a civil suit. This smacks of evidence that the Fed made some kind of sub-rosa deal with bond buyers, particularly in Europe, to cover their losses. In addition, we believe the Treasury and the SEC were in on the criminal fraud.

We see Warren Buffett doing the same thing that the Chinese are doing and that is dumping US dollars. He has been going to Asia and India to buy companies. This is how they both bet against the dollar. Buffett even says, "I would recommend against buying long-term fixed-dollar investments." He says over the next 20 years the dollar will lose its value. This is also what we have been preaching over the past 11 years, and that the preferred investment should be gold and silver coins, bullion and shares. Professionals are concerned about the trade deficit and the balance of payment's deficit, along with the continual creation of money and credit by the Fed. Then there is the horrible budget deficit and the rampant inflation the government continues to lie about.

Even PIMCO, as we all now know, has sold US Treasuries and even shorted them in anticipation of higher real interest rates. Bill Gross, CEO, calls the US a serial abuser of finance deficits with a ridiculous budget. He, like many others, has lost faith in the Fed and the government to run a proper government fiscal and monetary policy. Bill called it the new normal. We call it the road to fiscal and monetary perdition. Confidence is gone and well it should be. We lost confidence in 1960; it obviously takes others longer.

In our minds there is no question the dollar is going lower, perhaps 40% or 50% lower versus other currencies in general. In just the last 15 years it is 50% lower. In the last 40 years it is 98% lower. At this juncture it is our opinion that the Treasury and the Fed want the dollar lower in order to become more competitive. If they are going to do that they had best end their 60% plus reliance on foreign oil and start pumping America's vast oil and gas reserves. They will also have to end free trade, globalization, offshoring and outsourcing in order to bring those 430,000 firms that have moved to foreign countries.

As the dollar falls against other currencies, all currencies continue to fall versus gold and silver. Over the past 11 years, annually, nine major currencies have fallen more than 20% on average versus gold and silver. If the dollar over the next several years were to lose its status a world reserve currency costs for foreign goods would rise exponentially. The only reason the dollar isn't lower is that many other currencies have the same problems the dollar has in varying degrees. The dollar is very weak versus the euro at $1.46. Yet, the eurozone countries are exploding in debt and six of their members are candidates for insolvency. Japan, the UK, and parts of Europe have the same problems the US has - a hangover from using the Keynesian economic model. As a result of this misguided policy in ten years federal debt will be close to $20 trillion, up 75% from today. Is that anyway to fiscally run a country? The answer is obviously not. This is why the Fed has to buy 80% of Treasury and Agencies and it is why there is no end in sight to America's fiscal and monetary problems. Just about everything is being done incorrectly, which tells us again this has been done deliberately in order to bring the US, UK and Europe to their knees economically in order to force the people in these countries to accept World Government. The experiment again is not going to work and chaos and war will again envelop the world. You had best be prepared.

How can investors be positive about dollar denominated investments, when S&P warns government that they had best get their financial house in order or they will lose their AAA rating. They placed the US outlook as negative. The US has to address medium and long-term budgetary problems over the next two years and if they don't the rating will fall and the US will no longer be the world's reserve currency. Monetary policy cannot continue to augment, aid and abet such a profligate fiscal policy, which can easily be changed by cutting military spending by 50% to 13% of the budget. That is not easy to do with the military-industrial complex, Wall Street and banking running the country. Their greed knows no end.

We just saw over the past three years a credit crisis and a crisis of confidence for both the government and private debt sectors, which still hasn't been permanently addressed. Many major financial firms are still insolvent and carrying two sets of books. If you did that you would end up in jail.

The Fed has become a liability in its quest to protect its owners, the banks, and not the overall economy. It is instrumental in destroying debt quality and continues to destabilize the monetary base. There is no effort to cut military spending only Social Security and Medicare, which retirees and future retirees paid for, but those funds were stolen over the years.

How does any Fed call allowing mortgage debt to expand by $8 trillion or by 115% over six years? They the banks and brokerage houses knew exactly what they were doing and what the consequences would be. Banks employed leverage of 70 to 1 when 9 to 1 was normal and it is still 40 to 1. Obviously the bankers have learned nothing from their failures. In addition, besides us, how could rating agencies and professionals not recognize a Ponzi scheme? That is because S&P, Moody's and Fitch were part of the criminal enterprise. How could a credit system double debt, most of it was of very poor quality and expect that there would be no fall out? They knew the consequences and did it anyway. In the aftermath there has been no civil litigation and no criminal prosecutions. Why is this? It is because these criminals have bought most of Congress and the court system.

VIDEO: Destabilization Is The Name Of The Game

VIDEO: Bill Still - No More National Debt

Wednesday, April 27, 2011

VIDEO: Bankrupting Us Is Their Goal

VIDEO: America Is Being Destroyed By Insane Elites! Paul Craig Roberts Says "The Dollar Is Dying Right Now!"

VIDEO: The Hidden Agenda Behind The Man-Made Global Warming Scam

Thankfully, the IMF Says Our Era is Over

By Josh Tolley
April 26, 2011

The International Monetary Fund (IMF) has come out stating the dominance of the global economy that has been in the hands of The United States of America will soon transfer to the good people of China.
Personally, as a strategist, I couldn’t be happier!

China has entered the ring of economic superpower with a simple mission: WIN. Their number one target is the United States. They are projected to take over the number one spot in 2016. From a mathematical standpoint, it is justifiable to think that is the way it should be, they have an economy with 1.33 BILLION people.

Economically, more people can be an asset, not the only factor of success, but an asset none the less. So large is this nation that they could lose the entire population the size of the United States and still have over a billion people.

They have been living, eating, and breathing financial success for a few decades now, and they do it with a methodic drive that has the precision of a machine.

Meanwhile, in America we have lost our will to fight. We have been so comfortable in our success that we have forgotten what it takes to win and have instead been gloating in our past success while allowing money changers and “economists” to take control of the system, a system they didn’t create and have no clue on how to develop. Entrepreneurship is dying in America, small business exists, but real, pure, creative entrepreneurship is not at a level which it once was and needs to be now.

Provided that it is not too late to reawaken the entrepreneurial spirit, this could be exactly what America needs. Just like a champion fighter who hasn’t faced a real challenger, we haven’t had to pull ourselves off the canvas in a very long time. Just like the fighter, if the will to win has not yet died, a trip to floor can be the spark that we need to knock out all comers who threaten our title.

This fight to maintain our title as the global economic champion is a winnable fight. In order to do so, we need to look at some strengths and weaknesses in ourselves and in our competition.

China’s Glass Jaw:

Communism and Capitalism cannot occupy the same space. China has grown to the level is has by allowing a sliver of capitalism. If China is going to reach its potential than they will need to let go of more communism and empower more private ownership and success. China’s hold to communism may move them to slow the progression of free enterprise in order to maintain control. Settle for a solid second and keep a high level of communism is a viable option

If, however, the breath of freedom is taken by too many Chinese while the Party refuses to relinquish some communist strongholds, than a revolt the size we have never seen before is at their doorstep. Communism relies on a lack of understanding in the minds of the populace and with information systems growing as fast as they are, it will be impossible for Communism to keep that info flow closed for much longer. Revolt will result in economic turmoil which will take decades to rebound.

If they forfeit Communism for success, we are toast. If they reclaim Communism and suffocate capitalism, then we win by TKO.

Political Climate to Warrant Change:

We have forfeited business creativity for business regulation. It has been said that under the current system companies like Apple, Ford, and others would not have been able to get their start.

I’m not saying that all regulation is bad, but what I am saying is that corporate conglomerates have worked with our government to implement regulations not to protect the people, but to stifle the rise of competition.

We also could use this bout to look at radical changes to the tax code. When the “Right” fights the “Left” over tax codes, America will lose. Fair Tax, Flat Tax, or some combination thereof needs to be implemented by 2014 in order to give us the ability to compete on a global scale.

Killing Outsourcing:

When we outsource the people who benefit are not just the American businesses that are contracting these outsourced products or services, but also the country where those contracts are being carried out. From a national perspective, outsourcing hurts.

Killing outsourcing and bringing manufacturing back to America is not as hard as the companies who are outsourcing want you to believe.

If we tariff incoming products from other nations regardless of the company’s origin, we would eliminate a large percentage of this issue. Combine this with something like a Fair Tax to drop the cost of products and all of a sudden buying products from other nations isn’t the best priced option.

We could even go as far as having a higher sales tax on products made in other nations. That way the country profits from the sale of these products to offset the loss of revenue generated from manufacturing the product domestically. This would also encourage the consumer base to purchase domestically produced goods.

These systems, combined with tariffs on Chinese products, would slow China down to a crawl by 2014. Don’t forget, Communism in China has resulted in the majority of the population not being in a financial position to stimulate their economy.

The greatest thing we have going for us is that we are America. Our nation was founded on the system that China is now trying to use against us. America wouldn’t be here if it wasn’t for our entrepreneurial spirit. World relief wouldn’t be where it is at if it wasn’t for our capitalistic foundations.

If we decide to enter this fight, there is no competing. Yes, China has a population that is staggeringly large, but as we have proven time and again, population is no contender when it goes against the power of a dream, the pursuit of freedom, and the preservation of success.

Yes, the IMF has us hitting the canvas in 2016. The only question is, can Americans, down to the individual level, rally behind each other in order to promote the system which empowered us to become number one in the first place? Can we pull ourselves up from the ground and come up swinging?

Let us not forget that the same people at the IMF who are predicting the outcome of this fight are the some people who (on purpose or by accident) have been behind this global economic failure. The economy and its impacts are not exclusive to the global money changers. They are just “economists” who suffer from delusions for grandeur. The only thing they are good at is convincing us to believe in their delusions as well. The economy is us! The more success we have as individuals, the larger the economy gets. 1.33 billion people held to the success level allowed by their government stand no chance against even 100 million people who take personal success as a calling.

The IMF doesn’t know economics and they certainly don’t know America!

Josh Tolley is a business and behavioral strategist. His latest book, Quit Your Job or Die: Discover the Importance of Self-Employment has been a top ten best seller for over 16 weeks. You can find out more about what Josh is up to at

Downgrades Galore: US Debt Becomes Scary

by Dr. Jeffrey Lewis
April 27, 2011

As if there weren't already ample reasons not to purchase US Treasury securities, the ratings agency Standard and Poors' has provided investors with another reason: it may soon be downgraded.

The perfect storm is building. Ratings agencies are taking a stan to downgrade US debt from its triple-A rating, which would send Treasuries plummeting and the cost of US debt service skyrocketing. Standard and Poors' fired what is best understood as a warning shot to investors in dropping its current outlook from "neutral" to "negative." The difference, though slight, implies a 33% chance that the United States will lose its triple-A rating within the next two years.

Investors should see the change in debt rating to be obvious: not only will the US Treasury issue more debt this year than it has in any year in history, it will also begin to accumulate debt at a rate of roughly 10% per year, on top of interest rates of 3-4% on the longer end of the yield curve. Such a trend means that the US debt could grow at a parabolic rate, much like that of the parabolic incline that gold and silver have realized as of late.

Trouble Comes in Threes

The common phrase is that trouble comes in threes; that is, where one bad event happens, expect two more in the near future. This phrase couldn't be better adapted for US Treasury debt.

There are in this country three major debt ratings agencies-Standard and Poors', Moody's, and Fitch-each of which are tasked with the job of providing ratings for debt ranging from municipal securities and foreign debt obligations and corporate issues to US Treasury debt. They are, at least to the bond markets, the world's decision-makers. In a matter of policy, these three agencies can downgrade or upgrade debt overnight, creating massive changes in the debt markets just by moving letters around.

In going forward, it is certain that Moody's and Fitch will soon respond to Standard and Poors' decision, and each future move toward a lower rating for US Treasuries is sure to incite even more selloff. As we reported just weeks ago, the most influential bond trader in the world, Bill Gross, went short on US debt in his largest fixed-income portfolio, and the largest fixed-income mutual fund in the world.

Get Out, Now

The message to the market is quite clear: if you don't have to own US Treasuries, then don't. Yields on US Treasuries are now negative; that is to say that for every coupon investors receive, they ultimately have less spending power. Today's low yields won't make you rich, and skewed inflation numbers mean even owners of Treasury Inflation Protected Securities are losing money in real terms.

The only safe place to be is in your own dollar short, and none is better than that of silver. While the run to $46 has been exceptional, future growth in dollar-terms is certain, with more money being printed with each passing moment, while investors and industry remove silver from the market. Why wouldn't you want to own an investment that is shrinking in supply, growing in demand, and denominated in a currency that is rapidly inflating? The writing is already on the walls: commodities, especially monetary metals, are the only safe place to put your money.

What Is Outsourcing?

The Economic Collapse
April 27, 2011

Once upon a time in America, virtually anyone with a high school education and the willingness to work hard could get a good job. Fifty years ago a “good job” would enable someone to own a home, buy a car, take a couple of vacations a year and retire with a decent pension. Unfortunately, those days are long gone. Every single year the number of “good jobs” in the United States actually shrinks even as our population continues to grow. Where in the world did all of those good jobs go? Economists toss around terms such as “outsourcing” and “offshoring” to describe what is happening, but most ordinary Americans don’t really grasp what those terms mean. So what is outsourcing? Well, it essentially means sending work somewhere else. In the context of this article I will be using those terms to describe the thousands of manufacturing facilities and the millions of jobs that have been sent overseas. Over the past several decades, the U.S. economy has become increasingly merged into the emerging “one world economy”. Thanks to the WTO, NAFTA and a whole host of other “free trade” agreements, the internationalist dream of a truly “global marketplace” is closer than ever before.

But for American workers, a “global marketplace” is really bad news. In the United States, businesses are subject to a vast array of very complex laws, rules and regulations that make it very difficult to operate in this country. That makes it very tempting for corporations to simply move out of the U.S. in order to avoid all of the hassle.

In addition, the United States now has the highest corporate tax rate in the entire world. This also provides great motivation for corporations to move operations outside of the country.

The biggest thing affecting American workers, however, is the fact that labor has now become a global commodity. U.S. workers have now been merged into a global labor pool. Americans must now directly compete for jobs with hundreds of millions of desperate people willing to work for slave labor wages on the other side of the globe.

So exactly how is an American worker supposed to compete with a highly motivated person on the other side of the planet that makes $1.50 an hour with essentially no benefits?

Just think about it.

If you were a big global corporation, would you want to hire American workers which would cost you 10 or 20 times more after everything is factored in?

It doesn’t take a rocket scientist to figure out why millions of jobs have been leaving the United States.

Corporations love to make more money. Many of them will not hesitate for an instant to pay slave labor wages if they can get away with it. The bottom line for most corporations is to maximize shareholder wealth.

Slowly but surely the number of good jobs in the United States is shrinking and those jobs are being sent to places where labor is cheaper.

According to the U.S. Commerce Department, U.S. multinational corporations added 2.4 million new jobs overseas during the first decade of this century. But during that same time frame U.S. multinational corporations cut a total of 2.9 million jobs inside the United States.

So where are all of our jobs going?

They are going to places like China.

The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

In addition, over 40,000 manufacturing facilities in the United States have been closed permanently during the past decade.

What do you think is eventually going to happen if the U.S. economy continues to bleed jobs and factories so badly?

As the U.S. has faltered, China has become an absolute economic powerhouse.

Ten years ago, the U.S. economy was three times as large as the Chinese economy. At the turn of the century the United States accounted for well over 20 percent of global GDP and China accounted for significantly less than 10 percent of global GDP. But since that time our share of global GDP has been steadily declining and China’s share has been steadily rising.

According to the IMF, China will pass the United States and will become the largest economy in the world in 2016.

Should we all celebrate when that happens?

Should we all chant “We’re Number 2″?

Our economy is falling to pieces and the competition for the few remaining good jobs has become super intense.

The average American family is having a really tough time right now. Only 45.4% of Americans had a job during 2010. The last time the employment level was that low was back in 1983.

Not only that, only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded in all of U.S. history.

Just think about that.

33.2% of American men do not have jobs.

And that figure is going to continue to rise unless something is done about these economic trends.

Today, there are 10% fewer “middle class jobs” in the United States than there were a decade ago. Tens of millions of Americans have been forced to take “whatever they can get”. A lot of very hard working people are basically working for peanuts at this point. In fact, half of all American workers now earn $505 or less per week.

Things have gotten so bad that tens of thousands of people showed up for theNational Hiring Day that McDonald’s just held. With the economy such a mess, flipping burgers or welcoming people to Wal-Mart are jobs that suddenly don’t look so bad.

Right now America is rapidly losing high paying jobs and they are being replaced by low paying jobs. According to a recent report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth. Lower wage industries accounted for just 23 percent of the job losses over the past 12 months and a whopping 49 percent of the job growth.

Thanks to the emerging one world economy, the U.S. is “transitioning” from a manufacturing economy to a service economy.

But it certainly doesn’t help that China is using every trick in the book to steal our industries. China openly subsidizes domestic industries, they brazenly steal technology and they manipulate currency rates.

A recent article on Economy In Crisis described how the Chinese paper industry has been able to grow by threefold over the past decade while the U.S. paper industry has fallen apart….

From 2002 to 2009, the Chinese government poured $33.1 billion into what should be an unproductive industry. But, with the help of government subsidies, China was able to ride export-driven growth to become the world’s leading producer of paper products.

In the same time frame that China pumped $33 billion into its paper industry, U.S. employment in the industry fell 29 percent, from 557,000 workers to just 398,000.

So why should we be concerned about all of this?

Well, just open up your eyes. As I have written about previously, our formerly great cities are being transformed into post-apocalyptic hellholes.

In a comment to a recent article, Trucker Mark described what he has seen happen to the “rust belt” over the past several decades….

I am a product of Detroit’s northwest suburbs and the Cleveland, OH area, where together I lived almost 2/3rds of my 54 years. As a 30-year semi driver, I am intimately familiar with large areas of the industrial Midwest, the Northeast, and even much of central and southern California, and everything in-between. I am also college-educated, in Urban Planning and Economics. What has happened to not just Detroit, but to virtually every city in the southern half of Lower Michigan and northern Ohio is mind-boggling. When I was 18, it was quite common to head over to a car plant and get hired immediately into a middle-class job. At one time I had dozens of friends from school working at car plants, dozens more in other large factories, dozens more in major grocery warehousing and distribution, and me, I was a semi driver delivering to all of those places. Between 1979, when I started driving semis, and now, I must have seen 10s of thousands of factories across just the southern Great Lakes region close their doors. Some of them were small, and some of them employed 10,000 workers or more.

The former Packard plant from your photo closed in 1957, and at one time it employed 12,000 workers, and my roommate in 1982 in Birmingham, MI had been laid-off from the old Dodge Main plant in Hamtramck, which once employed over 20,000 workers, which closed in 1981. In 1970 just Chrysler had over 40 plants in the Detroit-area, and now there are just 11 left open. The Willow Run plant, which at one time turned-out a brand-new B-29 bomber every 40 minutes, and employed 50,000 workers, is long dead too, as is the tank plant north of town too. Even fairly new car plants like Novi Assembly are closed, Pontiac’s ultra-modern robotic car assembly plant too. In Cleveland 100 or more huge old plants stand empty, car plants, steel mills, and machine tool builders, in Akron dozens of rubber plants are long gone, Sharon, Warren, and Youngstown have all lost huge numbers of industrial jobs, Canton and Massillon too, where the NFL started, have been reduced to mere shells of their former selves. Along with the plant closings have gone the hopes and dreams of many thousands of retail operators, restaurant owners, and thousands of other small businesses too. Hundreds of entire major shopping malls stand vacant, as seas of potholes consume local roads. The city of Hamtramck, MI a Detroit suburb of 40,000 people, is bankrupt and has had to layoff all but two employees, one of whom works part-time. The traffic lights are shut-off and stop signs now appear at those intersections instead, as the city can’t even pay its power bill. I could go on & on & on for days but I don’t have the time.

I haven’t driven a semi in almost 2 years as my eyesight has begun giving out early. My last 10 years in the industry was spent delivering fresh and frozen meat on a regular multi-stop route through the Chicago-area and throughout southern Michigan. Between 2001 and 2009, my boss lost 14 of 19 major weekly customers in Michigan to bankruptcy, including three major grocery chains, plus numerous less-frequent customers. The Detroit News reported before Christmas of 2007 a 29% unemployment rate within the city limits of Detroit, with an estimated 44% of the total adult population not working, and another news story reported a 1 in 200 chance of selling a house across the entire metropolitan area, which still has 4 million people total. Since 2003, home prices within the city limits of Detroit have fallen by 90%, and today there are thousands of houses in move-in condition on the market there for $5K to $10K. The suburbs are not immune either.

You know what? Detroit and Cleveland used to be two of the greatest cities in the entire world.

Today very few people would call them great. They are just shells of their former glory.

Sadly, this cruel economy is causing “ghost towns” to appear all across the United States. There are quite a few counties across the nation that now have home vacancy rates of over 50%.

Another reader, Flubadub, also remembers how things used to be….

I am also a product of that generation and remember well the opportunities that existed for anyone with even a high school diploma in those days. Just within a reasonable commute to where I grew up we had US Steel, 3M, General Motors Fisher Body, Nabisco, The Budd Co., Strick Trailer and others providing thousands of jobs that enabled you to provide a decent living for your family. There were also plenty of part time jobs to keep high school students busy enough to avoid the pratfalls of idle youth and afford the 28 cent/ gallon gas for their used cars. Most of it is gone now and I don’t blame the Mexicans or the Chinese for stealing it. I blame the greed of the globalists and their flunkies, the phony free trade advocates in office, who’ve spent the last twenty years giving it all away.

Our jobs are being shipped overseas so that greedy corporate executives can pad their bonuses and our politicians are allowing them to get away with it.

According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

Life is great if you are a CEO.

Life is not so great if you are an average American worker trying to raise a family.

Another reader, Itsjustme, says that things are also quite depressing In New Jersey….

I live in northern NJ in a suburb a very short ride from NYC.

Our region was hit very hard — we once had a very prosperous and booming industrial area; mixed use with many warehouses and commercial buildings, hirise and lowrise.

The majority of companies that were in those buildings are gone. Long vacant; the signage is left and nobody is inside them.

One large commercical building with 15 floors now is home to 2 tenants: a law firm and a Korean shipping company.

It’s very sad what’s happened out here.

The only “companies” moving into these buildings are small change tenants that that are usually Chinese or Middle Eastern; you’ll see them subletting out 2 or 3 offices in these buildings and they operate out of those offices. They’re mostly importers of apparel or soft goods.

My guess is that they are there on very short term leases.

This will benefit our local and state economy not. These groups usually send the money home.

If this is the shape of things to come, we can hang it up right now. No viable companies are moving into our area; if anything new is being built it is retail and service industry garbage, like crummy fast food chain restaurants. No livable wage jobs are entering our local economy.

As I have written about previously, the standard of living of the middle class is being pushed down to third world levels. We have been merged into a “global labor pool”, and what that means is that the standard of living of all workers all over the world is going to be slowly equalized over time.

Our politicians never told us that all of these “free trade” agreements would mean that soon we would be living like the rest of the world.

America used to be the greatest economic machine on the planet. But now we are just another region of the one world economy that has workers that are too expensive to be useful.

In the end, there is not some great mystery as to why we are experiencingeconomic decline as a nation.

If millions of our jobs are being shipped overseas, it was basically inevitable that we were going to experience a housing crisis. Without good jobs the American people simply cannot afford high mortgage payments.

Today we consume far more wealth as a nation than we produce. We have tried to make up the difference by indulging in the greatest debt binge that the world has ever seen.

We have lived like kings and queens, but our debt-fueled prosperity is not sustainable. In fact, the collapse of our financial system is a lot closer than most people would like to believe.

Things did not have to turn out like this, but we bought into the lies and the propaganda that our leaders were feeding us.

Now our economy lies in tatters and our children have no economic future.

VIDEO: Max Keiser Report 4/27/11

VIDEO: Miss America Sexually Molested by TSA

Kurt Nimmo
April 27, 2011

In the video below, the former beauty queen who held the Miss America title in 2003, Susie Castillo, says a TSA “screener” fondled her vagina during an intrusive pat-down

Ms. Castillo was subjected to the groping after she refused to enter a naked body scanner at the airport in Dallas, Texas.

In late 2010, the TSA put in place new procedure guidelines instructing agents to use their “palms and fingers” to “probe” your body for hidden weapons, including breasts and other private parts.

On April 15, CNN reported that people who complain about naked body scanners and intrusive airport pat-downs will be investigated as terrorists and criminals.

Lawmakers around the country have introduced legislation designed to rollback the pat-downs after the public and airline employees voiced complaints. In March, legislation was introduced into the Texas House of Representatives directly challenging the authority of the TSA in airports within the state and specifically aimed at criminalizing the use of naked body scanners and enhanced pat-downs.

In November of 2010, chief deputy DA and incoming DA of San Mateo County Steve Wagstaffe told the Alex Jones Show his office will prosecute TSA employees who engage in lewd and lascivious behavior while conducting pat-downs at the San Francisco International Airport. Wagstaffe told Alex Jones that county police will be sent to into the San Francisco International Airport. If they witness TSA employees engaged in criminal conduct, they will make arrests and the DA’s office will prosecute.

In January, former Minnesota governor Jesse Ventura launched a lawsuit against the TSA for subjecting him to humiliating pat-downs as a he traveled for his work as the host of the popular TruTV show Conspiracy Theory. Ventura said that he would “no longer be forced by the TSA to prove he is not a criminal or terrorist.”

Earlier this week, Janet Napolitano, head of the Department of Homeland Security, said the TSA had the authority to conduct an intrusive pat-down on a six year old girl. “Parts of the pat down, in another setting, clearly constituted the kind of inappropriate touching that, if done by anyone else, would have resulted in charges of child abuse and sexual assault. The pat down even caused the little girl to cry, her parents later said in televised interviews,” writes J. D. Heyes.

In November, an Alex Jones employee related her experience with the TSA in Denver. Her children were subjected to the intrusive pat-down procedure.

Castillo is currently a spokeswoman for Neutrogena and has appeared on a number of television shows, the ABC Family reality television series, America’s Prom Queen.

She also held the title of Miss Massachusetts Teen USA in 1998.

Monday, April 25, 2011

British pound devalues by 94% in 50yrs

Press TV
Monday, April 25, 2011

A new survey shows that the value of money in the UK has dropped by 94 percent over the past 50 years, which means an 18-time increase in retail prices.

The survey carried out by BM Savings has found that almost £1,800 is needed to match the buying power of £100 in 1960, the daily, The Guardian reported.

It means that someone today would need £1,796 to have the same buying power of £100 in 1960, while 50 years ago, if you had £5.57 it would be worth £100 today, data from the Office for National Statistics shows.

The drop in the value of money is reflected in the cost of everyday items such as food and household goods. For example, a pint of milk cost just 3p in 1960 but will set consumers back around 44p today.

Full story here:

VIDEO: The Red Tide Is Here!!! Revolutionary Socialist Group Planning to Recruit Children in Jr. High School!!! This Guy Is A Fucking Bastard!!!!

Four Scary Words: “Silver Delivery Not Possible”

Tyler Durden
Zero Hedge
Monday, April 25, 2011

The SHTFPlan’s Mac Slavo brings us the story of one Bill Cramer who decided to cash in on his silver profits after a nearly decade holding period (under the assumption he was receiving warehousing services considering he was paying storage fees), confident that he could simply receive the metal he held with a broker, until he heard the following 5 very disturbing words: “Sorry, delivery is not possible.”

From SHTFPlan:

“Bill Cramer of St. Louis was pretty confident everything was on the up-and-up. He purchased 5000 ounces of silver back in 2003 for a spot price of $4.94 and stored them with an east coast broker. When he was discussing his holdings with his coin dealer, the dealer dared him to try and take delivery of the metal.

Bill took him up on that dare and contacted his broker requesting to take delivery of his supposed physical metal holdings, for which he had been paying storage fees for years. As you may have guessed, the broker advised him that physically delivering the metals was not possible.”

Here is how Bill recounts his experience:

So, I took his dare, I called them up, it was June of last year. The metal I had purchased in January of ’03. I said “I’d really like to take delivery of my metal – the five thousand ounces.” They go “well, that’s not possible.” And, I go “well, I’ve been paying storage fees since January of ’03, what do you mean I can’t take delivery.”

“Well, it’s part of the account. It’s called a pool account. And, you don’t take delivery, you just participate in the appreciation.”

So I immediately sold that 5000 ounces at $18.33 and I had my cell phone in my hand and I immediately purchased 2500 silver eagles at $18.41 and that’s how I reconciled the problem of not being able to take delivery of my physical metal from a brokerage account.

In other words: anyone who has “pool account” exposure may want to reevaluate their options. And, if we may add, anyone who has Comex storage exposure in general (University of Texas wink wink) even for allegedly delivered gold, and when massive amounts of “registered” gold get mysteriously shifted to “eligible” status, may want to be reeeeally careful now that silver is about to take out its all time nominal high.

Sunday, April 24, 2011

Inflation Rate To Reach 20% By June 2012 Says Bob Chapman As U.S. Lead Hyperinflationary Global Economic Collapse Gains Momentum

Bob Chapman
International Forecaster
April 24, 2011

Economic recovery does not seem to be taking effect in spite of more massive expenditures by Congress and the Fed. The IMF says financial stability has improved, but then again their vision is almost always clouded. US tax revenues are not increasing in a meaningful way, manufacturing struggles to expand and Wall Street flourishes in a cascade of mega salaries and bonuses. In another six months the US will be three years what the government, the media and Wall Street call a deep recession. We call it an inflationary depression, which has existed for 26 months. After eight years of increasing money and credit, and the creation of a real estate bubble, the Fed has been fighting off asset destruction with ever more money and credit accompanied by debt deflation. Part of the Fed’s policy has been zero interest rates, which has helped Wall Street and banking and to a limited extent real estate, but has destroyed the purchasing power of retirees and has driven funds into speculation, which in many cases has ended in ever more losses and less buying power.

The policy left conservative investors no place to turn to other than to join Wall Street and bankers in speculation, something they were not prepared for nor could they compete with. Borrowers have had a field day with virtually free money for which the result has been higher inflation and really major unemployment. You might call this the true Keynesian corporatist fascist model. This has left us with ongoing malinvestment, ridiculous illusions, which have led to the de-capitalizing of the US economy. In that process these interest free loans have given the big hitters the opportunity to enhance their fortunes at the expense of everyone else.

These rates and QE2 at least for the moment have been so powerful that deflation is nowhere in sight, except perhaps in job creation. In fact net inflation has moved up to 9-1/2% and we believe this year it will attain 14%, as government eventually admits to 5-1/2%, as we saw three years ago. If you think we are wrong look at producer prices that are up almost 11% over the past six months. Government and mainline economists are not paying attention. Either the higher costs are passed on or the profits will disappear. Just like in years past, over and over again, the excessive expansionism of monetary and fiscal policy will produce excessive inflation, more inflation than the so-called experts are anticipating.

The bailout of financial institutions by American taxpayers, both in the US, UK and Europe, won’t be allowed to happen again. In the next go-around they will go bankrupt. Those in the US and other stock markets with the exception of gold and silver shares, those in bonds, derivatives and hedge funds, will be wiped out as well. Few will be spared.

A year from this June inflation should be near 20% and that is where panic will set in. The 10-year T-note should be yielding 5-1/4% to 5-1/2% and the 30-year fixed rate mortgage should be 6-1/2% to 6-3/4%. After that interest rates and inflation will more than double, as they did in the late 1970s.

An example that is easily understood is that due to foreclosure and lack of job creation, rents should increase 10% over the next 1-1/2 years. That is known as Homeowner’s Equivalent Rent, which is 23% of total inflation. We believe that is a conservative figure. We won’t deal with core inflation, because it is just a method of obscuring real inflation. That 10% increase would add 4% to net inflation, which is currently about 9-1/2%, not 1.9%, as your faithless government would have you believe. That would put real inflation at 5-1/2%, not to mention increased prices for fuel and food. That is why our estimates are 14% to 25% over that time frame. Don’t forget interest rates will be rising as well. This only includes QE and stimulus 1 & 2. If QE3, by that or some other euphemism occurs, which we believe has too, then 50% inflation and hyperinflation is attainable. Readers have to remember that even if oil prices stopped increasing at $120.00, and food prices stayed at 10% higher levels, it would still rob consumers of $300 billion in purchasing power. That would drop consumers as a part of GDP from 71% to 69% easily. That means GDP growth even with the Fed adding $2.5 trillion to the economy, would at best stay even and may reflect as low as a minus 6%. You have to get the feel of the dynamics of this. Raging inflation, plus perhaps hyperinflation, a falling economy and 30% to 40% unemployment, U6 was 37.6% at the top of the great depression and the birth/death ratio didn’t exist at that time. Presently wages are stagnant, and they have been so for three years. Wages will finally start to rise so you can add rising wages to the inflationary explosion.

As this transpires we have the Middle East and North Africa, which are now a frightening further calamity waiting to happen. Any further violence there could take oil to $150.00 or higher. Will there be war with Iran? Perhaps and if that develops oil could escalate to $200 to $300 a barrel. Such developments would knock the foundation out from under the entire world, except for those fortunately producing oil.

Another factor is the plight of municipalities and states in the US. We have seen a small reduction in employment in these sectors, but the biggest layoffs are yet to come, as well as more than 100 municipal bankruptcies. We will also see debt default by states in relation to their bonds and other debts. Some states, such as Illinois, New York and California could cease functioning. This is not a pretty picture.

Then we have the woeful situation in the UK and Europe, all beset with rising inflation as well. A sovereign debt crisis has been prevalent for months with Greece, Ireland, Portugal, Spain, Belgium and Italy. All are at different stages of failure and nothing has really been resolved. As we wrote months ago the cost of bailout assistance would be $4 trillion, and it was just recently that the Germans and other lenders realized that the bailout cost is insurmountable. The cost will easily bankrupt the solvent lenders. Then there are the banks, all of which are close to insolvency already, which are facing massive bond losses, which will put them out of business. These are the loans they made that they should have never made, from funds created out of thin air.

Iceland has rejected paying off British and Dutch depositors, who had funds in Icelandic banks, which went bankrupt. The depositors do not have a leg to stand on and the citizens of Iceland are correct in their refusal. It was the Icelandic bankers who screwed the depositors.

Recently Finland’s voters rejected the bailout of Greece, Ireland and Portugal and who can blame them.

Wait until Greece goes into default, then things will get real interesting.

We normally do not editorialize regarding silver and gold. As you know we have recommended being long gold and silver shares, coins and bullion since June of 2000. Now that story is getting even better. Not only has gold and silver been a safe haven asset all those years, but is finally again becoming a shelter from inflation. The US, UK and Europe are in serious financial and economic trouble. Over the past 11 years, nine major country’s currencies on average have fallen more than 20% each year versus gold and silver. That is quite an extraordinary return and from our mail our subscribers are quite happy they followed our advice. Our run, including our market shorts, has simply been unbelievable.

Silver prices are on a tear and as we write they have risen to $46.30. In spite of these price levels the mining industry is not increasing production in any meaningful way. About 70% of production comes as a by-product of other types of mining, such as copper. There are no new sizeable projects in the works, and thus it is expected that production could fall 5% annually for the next ten years. The easy finds have already been exploited and new large projects are harder to find. In fact, current mines have only been able to increase production by a paltry 2.5% or so. In 2009 Argentina was the only outstanding exception and that could be a one off occurrence.

As we write gold has broken out to $1,509.30 even as the “Plunge Protection Team” fights viciously to suppress both gold and silver prices. Despite the mantra on Wall Street and in government there is 9-1/2% inflation affecting the US economy and the professionals and the public are finally catching on. In spite of the greatest bull market in gold and silver history, they still do not get it. Less than 1% of Americans own gold and silver related assets.

The QE1 and 2 and stimulus 1 and 2 have done their damage. The inflationary results are in the pipeline. QE and stimulus being reflected this year and the results of QE2 and stimulus 2 next year. We believe we’ll see the results of QE3 the following year, 2013, but it will be called something else. A falling dollar and few buyers of US debt has again set the stage for the Fed taking down 80% or more of Treasury and Agency debt. If they do not do that the whole system will collapse. These programs are like booster rockets aiding an underlying positive fundamental condition for gold and silver. The flip side is the debasement and denigration of the US dollar. As an aside even though the ECB has just raised interest rates they and the UK will continue their own versions of QE, because if they don’t their economies will collapse. That will put even more inflation into the world financial system.

As the possibility of QE3, or its equivalent, lurks in the wings the very solvency of America hangs in the balance. Those who have studied financial and economic history know that the course that is being followed is unworkable, and that certainly includes the staff at the Fed and the Treasury Department. In fact, Mr. Bernanke pointed out that in his and Mr. Baskins’ writings in 1988 after the market collapses of 1987.

At the heart of America’s problems are the insolvency of many financial institutions and the failure of either the Fed or the Treasury to have them liquidated. What the banks have in mind is the liquidation of bad debt held in suspension over the next 50 years. Supposedly as conditions and profits increase part of those profits will be used to lower debt. The problem is that these corporations are bankrupt. There access in the creation of inside information allows them to produce illegal outsized profits, such as 90 days of propriety trading without a loss. We were traders for 25 years and know under normal legal circumstances that that is impossible.

The, of course, there are the giant profits, really theft from other investors, that are used in part to offset previous losses and provide outsized salaries and bonuses to the crooks that run these banks and brokerage firms. These results are aided by the creation of money and credit and zero interest rates. The ability to borrow money created out of thin air at almost no cost. As a result the Fed now has a balance sheet of some $3 trillion loaded with Treasuries, Agencies, toxic waste and if they decide to create more money and credit to keep the government and the economy functioning for another year that figure will become $5.5 to $6 trillion. That is some monetization. There is unfortunately no other way for the Fed to do it, when at best they can only expect 20% to 30% of buyers for Treasuries, as the dollar falls in value. The situation is dire as the US dollar has just fallen 5% versus the Mexican peso, as the Mexican economy grows 4.5% a year, inflation is 3.7% and unemployment is 5%, and they haven’t used stimulus. What are we missing here? Nothing except the Fed and Treasury, as well as Congress and the President are out of their minds as were their predecessors. How bad is it when the largest bond fund in the world, PIMCO, not only sells all its US Treasuries and Agencies, because they see no value and then they proceed to short them? It’s certainly a sad day for the solvency of America. Who can blame PIMCO when government is projecting $1.6 trillion deficits as far as the eye can see. In addition, all the funds paid by Americans for Social Security and Medicare have been squandered by government. Now there is no way to pay the promised benefits. That is $100 trillion that has been stolen, or should we say misappropriated. It is so bad that the US government credit rating may soon be lowered. It was just 1-1/2 years ago we picked August 2011 as the possible time for a downgrading of that AAA credit rating.

The number of states in serious financial trouble has now risen to 40 and unfortunately that number is still climbing.

We wonder what the American public is going to think when the Fed bails JPMorgan Chase and HSBC out of their naked silver short for $100 billion or more? This is called corporate welfare in a corporatist fascist society. They gamble and lose and you get to pay the bill. They get to keep the profits as our retirees starve as their SS is frozen or reduced. Then when they get ill a government panel tells them that their treatment will be too expensive, so they’ll have to die on their own. This is what bankers and Wall Street and their organizations have planned for the elderly. They are considered useless eaters now that their contributions to society have ended. That is what you have allowed America to become – a country run by terrorist, criminal syndicate.

The dollar no longer has stability because few believe that the government possesses more than 8,000 tons of gold. It is called a collapsing fiat currency. The result of profligate fiscal management and monetary madness. The result is in the process of becoming raging inflation that will become hyperinflation. As we write gold and silver have established new highs at $1,505.70 and silver at $46.69 respectively with no top in sight. This is a reflection of dollar and all currency debasement. Do not forget for the past 11 years, nine major currencies on average have fallen more than 20% annually versus gold and silver. As you can see this is not only a dollar policy, but also a policy being pursued by many nations called corporate, fascist, Keynesianism. The result is rising inflation worldwide that is a reflection of rising commodity prices, which are a result of a flight to quality.

The same manifestation has been visited on gold and silver as well. Yes, inflation makes gold and silver rise, and that is important, but the real propelling force is the flight to the only real money in the world and those are gold and silver.

In a sign of the sluggish economy’s devastating impact, state government revenue across the country dropped by nearly one third in 2009 the sharpest decline in 60 years, the Census Bureau said in a new report.

States saw record-breaking losses to their pension funds and in their tax revenues, as the recession wreaked havoc on payrolls and investments,.

Revenues plummeted by 30.8 percent, from $1.6 trillion in 2008 to $1.1 trillion in 2009, according to the report.

It was the most dramatic drop the Census Bureau has seen since it began collecting state revenue data in 1951.

States reported a total $477 billion drop in “insurance trust revenue” – mostly money from pension funds, while tax collections fell by $66 billion.

And the worst may still be to come.

Fiscal 2012 “will actually be the most difficult budget year for states ever,” said Nicholas Johnson, director of the state fiscal project at the Center on Budget and Policy Priorities, in an interview with The Washington Post.

The center reported last month that states will see budget shortfalls totaling more than $140 billion next year as they continue to wrestle with depressed revenue levels while federal stimulus dollars and reserves run out.

The Minnesota Dept. of Transportation is looking for 500 people to test technology that could someday be used to collect a mileage-based user fee.

Mn/DOT anticipates a fee on road usage might someday be necessary as more fuel efficient and hybrid cars are on the road, decreasing revenue from the gas tax.

“This research will provide important feedback from motorists about the effectiveness of using technology in a car or truck to gather mileage information,” said Cory Johnson, project manager.

“We are researching alternative financing methods today that could be used 10 or 20 years from now when the number of fuel efficient and hybrid cars increase and no longer produce enough revenue from a gas tax to build and repair roads.”

Recruiting for the Minnesota Road Fee Test will begin in May, with research starting in July. Volunteers must be from Hennepin or Wright County. Drivers will be given smart phones with a GPS application that has been programmed to allow them to submit information. Volunteers will get a small stipend for expenses associated with the test.

The research is scheduled to end by December 2012.

The state of Oregon completed a similar study in November 2007. Iowa, Nevada and Texas are currently researching mileage-based user fees.

Mn/DOT says that if a mileage-based user fee were implemented, motorists would pay a fee based on how many miles they driver, rather than how much gas a vehicle uses, which is how Minnesota’s gas tax is currently designed.

The Minnesota Legislature appropriated $5 million from the trunk highway fund for the demonstration in 2007.

Teri Essex retired a year earlier than planned when she was offered $56,000 to leave her elementary-school teaching job in Elk Grove, California.

Instead of accepting a salary cut, larger classes and less money for supplies from spending reductions made last year by California lawmakers closing a $19 billion budget deficit, Essex, 60, took the money over nine years to retire in 2010 after 21 years of teaching.

“The financial buyout was a no-brainer,” said Essex, whose school was 15 miles (24 kilometers) outside Sacramento. Even though she’ll give up about $300 monthly by quitting early, she said, “Once you start thinking about retiring, it was like, ‘Oh yeah, I want to do this.’”

California, Florida and Texas are seeing more retirements as rising benefit costs, pay cuts and looming furloughs prompt workers to leave. Inducements to quit early also boosted departures in New York as U.S. states tackled budget gaps totaling more than $540 billion since fiscal 2009, according to the Center on Budget and Policy Priorities. In New Jersey, Wisconsin and Ohio, added motivation came from attacks on unions over costs that strained budgets.

“These are people electing to retire because they’re worried,” Jeffrey Keefe, who teaches labor and employment relations at Rutgers University in New Brunswick, New Jersey, said in a telephone interview. “They are demoralized by the current public-employee condemnations.”

Sales of U.S. previously owned homes rose in March as a mounting supply of properties in or near foreclosure lured investors.

Purchases increased 3.7 percent to a 5.1 million annual rate, exceeding the 5 million median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. All-cash deals accounted for 35 percent of transactions, the most on record, the group said.

U.S. home prices fell 1.6% in February compared with January, and were down 5.7% compared with a year earlier, the Federal Housing Finance Agency reported Wednesday. Prices fell a revised 1% in January, much weaker than the initial estimate of a 0.3% drop. The FHFA purchase-only home-price index is down 18.6% from the peak in 2007. Prices fell in all regions in February, led by a 3.7% drop in the Mountain states from Montana down to New Mexico and a 2.6% decline in the East North Central, which stretched from Ohio to Wisconsin. Sales data is based on mortgages sold or guaranteed by Fannie Mae and Freddie Mac.

Applications for U.S. home mortgages rose for the first time in a month last week as interest rates eased and purchase activity picked up, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 5.3 percent in the week ended April 15.

That was driven by a 10 percent increase in the gauge of loan requests for home purchases, sending the purchase index to its highest level since early December. The MBA’s seasonally adjusted index of refinancing applications gained 2.7 percent

Fixed 30-year mortgage rates averaged 4.83 percent in the week, down from 4.98 percent the week before.

U.S. households are now getting more in cash handouts from the government than they are paying in taxes for the first time since the Great Depression. Households received $2.3 trillion in some kind of government support in 2010. That includes expanded unemployment benefits, as well as payments for Social Security, Medicare, Medicaid, and stimulus spending, among other things.

But that’s more than the $2.2 trillion households paid in taxes, an amount that has slumped largely due to the recession, according to an analysis by the Fiscal Times…

Also, an estimated 59% of the 308.7 million Americans in this country get at least one federal benefit, according to the Census Bureau, based on 2009 data. An estimated 46.5 million get Social Security; 42.6 million get Medicare; 42.4 million get Medicaid; 36.1 million get food stamps; 12.4 million get housing subsidies; and 3.2 million get Veterans’ benefits…

Government cash handouts account for a whopping 79% of household growth since 2007, even as household tax payments–for things like the income and payroll tax, among other taxes–have fallen by $312 billion.

Last year, Fannie acquired 232 properties through foreclosure more than double the amount in 2009 and loans backing another 481 properties were seriously delinquent. The rise is a reminder that despite the rebound in apartment-building prices in leading markets, owners and their lenders are still hurting in many parts of the country… Freddie and Fannie single-handedly kept the multifamily industry from experiencing the credit crunch that walloped the office and retail sectors. The companies own or guarantee around 40% of the market, with $325 billion in multifamily mortgages… Values of buildings owned by real-estate investment trusts are within 10% of their 2007 peak, according to Green Street Advisors, a research firm. But vacancies hit 30-year highs during the recession and still haven’t recovered in many markets.

Real estate magnate Donald Trump on Tuesday outlined his plan for dealing with China if he were to be in a position to do so.

If Trump were to run for President – and that remains a big ‘if’ – and win – which is an even bigger ‘if’ – a Trump White House would deal with China in the following ways.

“I would tell China, very nicely, fellows, you are my friend, I like you very much. I’ve made a lot of money on China by the way, a lot of money with China. I would say we are going to put a 25 percent tax on all your products coming in, and that’s going to do a number of things,” Trump said.

“Number one: as soon as they believe it’s going to happen, they will behave so nicely, because it would destroy their economy,” said Trump in an interview with NBC’s Today show on Tuesday.

Playing up to voter fears on the loss of jobs to China, Trump said the transfer of cash to the Chinese was down to Beijing’s controversial currency peg.

“When you see what China is doing to us, what we’re going to lose this year, $300 billion to China. And they are taking all of our jobs, and they are doing it through manipulation of their currency,” Trump said.

Trump also criticized Saudi Arabia and OPEC, which have said the oil market is oversupplied and cut back on supply despite oil prices sitting well over 100 dollars a barrel.

“OPEC is sapping our strength, we can’t pay 108 dollar a barrel oil, it’s sapping our country, and by the way, they are going to raise it higher, because now Saudi Arabia said there’s plenty of oil, we’re going to cut back,” Trump said.

As US treasury secretary Tim Geithner told CNBC that Congress would agree on extending the debt ceiling following S&P’s cut in America’s debt outlook, Trump outlined how he would deal with America’s soaring deficit.

“I wouldn’t raise it,” he said. “You’re going to have to make a (political) deal some place. You might as well do it right now. I’d do it right now. I’d stop it right now,” he said.

Hedge funds are back and bigger than ever. Fueled by fresh investor demand, these loosely regulated portfolios now manage $2.02 trillion, marking an all-time high for the industry, data released on Tuesday by Hedge Fund Research (HFR) show.

The previous record for assets was $1.93 trillion and was reached in the second quarter of 2008.

Investors added $32 billion in new money during the first three months of 2011, sending the biggest amount of new dollars to hedge funds since the third quarter of 2007, HFR said. For hedge funds the news signals the industry appears to have recovered from the 2008 financial crisis when the average fund lost 19 percent and many managers lost significantly more.

“The current asset level reflects an increase of over 50 percent from the Financial Crisis low of $1.33 trillion in the first quarter of 2009,” HFR wrote in a news release.

Not only will the cross-border trucking program with Mexico result in the loss of American jobs, as it turns out, it could wind up costing American taxpayers hundreds of thousands, if not millions of dollars.

Since the U.S. government can’t legally force Mexican trucks entering the U.S. to comply with federal emissions regulations, the state of Arizona is taking an entirely different approach.

Under an Environmental Protection Agency grant, the state of Arizona is paying to replace the exhaust system on some Mexican trucks in order to reduce diesel-fuel emissions. The Arizona Department of Environmental Quality is replacing the old muffler system on the trucks with new catalytic converters, which is standard in the U.S.

Arizona officials claim that the program is mutually beneficial to both the U.S. and Mexico. Under the agreement reached by the Obama administration, the trucks are going to have access to U.S. roadways whether they meet U.S. environmental standards or not. By paying for the upgrades, it will vastly improve air quality on the American side of the border.

“It’s about establishing this relationship on environmental issues,” ADEQ Director Henry Darwin told The Arizona Republic. “It’s especially important on air quality because you can’t stop the air from moving across the border.”

Last year, the state agency replaced the exhaust systems of 55 Mexican trucks, and there are plans to do even more this year.

The cost for the upgrades to each truck is $1,600, all of which is funded by the EPA and, indirectly, the American taxpayers.

Officials say that the improvements can reduce harmful diesel emissions by as much as 30 percent.

Because of the North American Free Trade Agreement, Mexican trucks have had limited access to American roadways for the past 17 years. However, the trade pact was supposed to provide full access.

After the suspension of a pilot program that did just that, Mexican officials protested, and have now won full access to America’s roads.

Thousands of trucks already enter the U.S. from Mexico each and every day, but the new deal struck will likely increase that number exponentially.

And it won’t be just Arizona that drivers are traveling through to cross into the U.S. Other border states could soon adopt similar programs, which will cost American taxpayers even more.

Manufacturing in the Philadelphia region slowed more than forecast in April as measures of orders and sales fell.

The Federal Reserve Bank of Philadelphia’s general economic index dropped to 18.5, the lowest level since November, from 43.4 the prior month which was the highest level since 1984. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.

The index of U.S. leading indicators increased for a ninth month in March, signaling higher fuel costs will fail to derail the expansion.

The Conference Board’s gauge of the outlook for the next three to six months rose 0.4 percent after a revised 1 percent gain in February that was larger than previously estimated, the New York-based group said today. Economists forecast a 0.3 percent March increase, according to the median projection in a Bloomberg News survey.

New applications for unemployment benefits in the U.S. fell less than forecast last week, indicating the labor market will take time to improve.

Jobless claims decreased by 13,000 to 403,000 in the week ended April 16, Labor Department figures showed today in Washington. Economists projected a decline to 390,000, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those receiving extended payments declined.

Since the Crisis of 2008 government has absorbed a crushing amount of private sector debt, risks and payments. It is a command economy in the US and other countries of record proportions.

But this has put sovereign nations in jeopardy. This will be the ‘real’ crisis.

Don’t Like a Weak Dollar? Might as Well Get Used to It

Jeff Cox
April 23, 2011

Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market.

The greenback is approaching pre-financial crisis lows and threatening to smash through its all-time low when measured against the world’s predominant national currencies.

A combination of factors accounts for the weakness, with the Federal Reserve’s easy-money policies, huge national debts and deficits and the consequential possibility of a debt downgrade because of the fina mess in Washington leading the way.

In short, as trader Dennis Gartman noted Thursday, “the rout of the US dollar” is in full effect.

“Panic dollar selling is setting in,” Gartman, a hedge fund manager and author of “The Gartman Letter,” wrote in his daily commentary. “This may carry farther than any of us dream of or, worse, have nightmares of.”

Full article here:

Why Investors Are Buying Silver As If There Is No Tomorrow

The American Dream
April 23, 2011

The price of silver has been absolutely exploding lately. It has reached heights not seen since the Hunt Brothers attempted to corner the silver market over three decades ago. But this time there are no Hunt Brothers to blame for the stunning rise in the price of silver. So exactly why are investors buying silver as if there is no tomorrow right now? Well, the truth is that there are a lot of reasons. Investors have been flocking to precious metals such as gold and silver as the value of paper currencies has declined. The euro is incredibly weak right now and the U.S. dollar appears to be on the verge of a major collapse. In fact, the entire financial system is highly unstable right now. In such an environment, investors seek some place safe to park their money, and right now gold and silver are seen as safe harbors. But gold and silver have not been going up in price at the same pace. So why is silver outperforming gold so significantly?

The price of silver has increased by more than 150% over the past 12 months. But the price of gold has only gone up about 30%.

If you invested $100 in the S&P 500 ten years ago it would be worth about$107.48 today.

If you invested $100 in gold ten years ago it would be worth about $569 today.

If you invested $100 in silver ten years ago it would be worth about $1037today.

Clearly something is going on with silver.

Many people are convinced that this is part of a correction that is long overdue. Geologists tell us that there is approximately 17.5 times as much silver in the crust of the earth as there is gold. But today the price of an ounce of gold is about 30 times higher than the price of an ounce of silver.

That would seem to indicate that the price of silver still has a lot of room to grow relative to the price of gold.

In addition, silver is a key industrial commodity and it is constantly being used up. Today, silver is used in a vast array of products and medicines. The following is an excerpt from an official U.S. government report that describes just some of the ways silver is used in society today….

Silver’s traditional use categories include coins and medals, industrial applications, jewelry and silverware, and photography. The physical properties of silver include ductility, electrical conductivity, malleability, and reflectivity. The demand for silver in industrial applications continues to increase and includes use of silver in bandages for wound care, batteries, brazing and soldering, in catalytic converters in automobiles, in cell phone covers to reduce the spread of bacteria, in clothing to minimize odor, electronics and circuit boards, electroplating, hardening bearings, inks, mirrors, solar cells, water purification, and wood treatment to resist mold. Silver was used for miniature antennas in Radio Frequency Identification Devices (RFIDs) that were used in casino chips, freeway toll transponders, gasoline speed purchase devices, passports, and on packages to keep track of inventory shipments. Mercury and silver, the main components of dental amalgam, are biocides and their use in amalgam inhibits recurrent decay.

Estimates vary, but many experts are now projecting that at current consumption rates we will run out of silver at some point during this century.

On the other hand, we are not facing a similar problem with gold. Gold, because it has traditionally been so expensive, is not used in many products at all. The total amount of gold on earth just continues to increase each year.

Silver is also considered to be a lot more accessible for smaller investors. Not many average Americans can afford to do much investing in gold because it is so expensive. But just about anyone can afford a few ounces of silver.

As investors around the globe have watched the Federal Reserve create endless amounts of money and as they have watched the U.S. government borrow endless amounts of money the hunger for precious metals has grown.

The following is what John Browne had to say about the current situation in a recent commentary….

Today, with the Federal Reserve treating the greenback as a never ending lottery ticket for deficit spending politicians, many investors feel the U.S. dollar is good for nothing. As a result there is an increasing international pressure to remove the U.S. dollar’s reserve status. Given that there is no widely accepted alternative to the dollar (the euro has many problems of its own), this is creating fears of an international currency crisis, which has fueled interest in precious metals.

As the U.S. dollar and other paper currencies continue to decline, the demand for precious metals such as gold and silver is only going to increase.

Most investors are not stupid. They know that the European debt crisis is approaching a meltdown. They know that U.S. government debt is not sustainable. They know that all of the paper currencies around the world that are backed by nothing will continue to decline in value just like they always have. All of the major central banks have been recklessly printing money. In such an environment it only makes sense to put your wealth into hard assets.

But there is another layer to all of this. Many now view investing in precious metals as a way to rebel against the Federal Reserve and other central banks. All over the globe people are waking up to how unjust the banking system is. Since central banks such as the Federal Reserve are almost completely unaccountable politically, many individuals have sought other ways to protest the system. Getting out of “Federal Reserve Notes” and into precious metals is one small way to do that.

In any event, what is clear is that the price of silver is likely to continue to go up over the long-term. Silver is used in thousands of products and we are slowly running out of it. Meanwhile, the central banks of the world are absolutely flooding the globe with paper currency. What all of that adds up to is a much higher price for silver.

So what do all the rest of you think about the price of silver? Please feel free to leave a comment with your opinion below…