However, if I have not scared you enough about our financial and economic plight over the past three days, consider the following, additional bad news:
- In an article from http://www.theatlantic.com/, that was summarized in the May 25, 2012 issue of The Week magazine: "Europe is about to experience the mother of all bank runs. If Greece exits the Euro, depositors in Ireland, Portugal, Spain, and Italy will transfer their cash to safe countries like Germany. That capital flight will encourage international investors to start betting on a breakup, causing borrowing costs to soar and making the Euro's collapse even more likely."
- In that same issue of The Week magazine, a summary of an Associated Press article predicted that the pain of a Euro breakup would extend to the U.S. The article claims that Wall Street has trillions of dollars tied up in European banks, and it the Euro goes kaput, those American banks are likely to curtail their lending due to the resultant cash squeeze.
- Speaking of banks, an article that appeared at http://www.theatlantic.com/, which was summarized, you guessed it, in the May 25, 2012 issue of The Week magazine, reported that the five largest banks in the country control $8.5 TRILLION in assets, which is equivalent to about 56% of the nation's economy. These are both bigger numbers than in 2008 when the rallying cry "too big to fail" resulted in the despised, ineffective, and very expensive taxpayer funded bank bailouts.
Obviously, Washington and the political class never figured out how to make the big banks not be too big to fail. If the Euro crisis smacks these big banks, will the taxpayers put up with another round of bailouts for Wall Street? And if not, what would happen to our economy if one be of the big five goes down the tubes?
- A Huffington Post article that was also summarized in the May 25, 2012 issue of The Week, reported that less than half of the U.S. graduates since 2009 have found a job within a year of leaving school. Those in the other half that did find a job have an average starting salary of about $27,000, 10% lower than the graduating classes of 2006 and 2007.
- From that same issue of The Week (a busy week of bad economic news to appear in just one issue!), a summarized New York Times article reported that 94% of college students borrow money to pay for their education, double the percentage from twenty years ago. The heavy debt load their incur restricts their ability to buy cars, rent an apartment, and conduct other economy growing activities due to the diversion of their income to paying off their debt.
- A recent Gallup poll, reported int he May 18, 2012 issue of The Week magazine, found that Americans' "personal financial comfort" is at the lowest level since Gallup began tracking the measure ten years ago. 39% of those polled said they do not have enough money to live comfortably, up from 34% last year and 24% in 2002.
- A recent Associated Press article reported that the Organization For Economic Cooperation and Development warned the 17 countries in the Euro zone that they risked falling into a severe recession, and bringing the rest of the world into a recession with them, unless more was done to stem the debt crisis.
- We have already talked about the so-called "taxmageddon," the economic doomsday scenario that will occur in early 2013 unless the political class can get together beforehand and agree on how to effectively handle a multitude of tax issues and spending issues beforehand.
According to a recent Washington Post article (and it too was summarized in the May 25, 2012 issue of The Week magazine), the lack of leadership and effective planning from Washington is resulting in defense contractors already slowing their hiring plans and hospitals cutting costs in anticipation of the end of year deadline. Neither of these actions, and probably thousands of other,similar actions by thousands of companies across hundreds of industries, will help the state of the economy in 2012.
- And one last blast of bad, the Dow Jones Industrial Average closed last Friday down over 9% from its 52 week high. I believe that we are considered in a bear stock market environment when the market drops more than 20% below is annual high. Thus, we are almost half way to a bear market and the trend is not good.
Really scary stuff. That is why we wanted to get all of the bad news out so that people would begin to realize how dangerous a time we are in from a debt, financial, and economic perspective. Starting tomorrow, and probably going for at least two days, we will present our recommendations for getting this situation under control and moving forward in a positive direction.
It is obvious that the political class in Washington has no clue on what to do. Otherwise, I would have thought they would have done it already and we would not be in this economic death spiral. The information shared over the past three days should be reason enough to 1) dump out all incumbents in November, from the President through the first term members of Congress, 2) start the process of implementing term limits, and 3) start the implementation of the economic salvation plan we will propose in the next few days.
I will leave you with two quotes to ponder in the light of the dire economic news we have shared over the past four posts:
Albert Einstein: "The definition of insanity is doing the same thing over and over again and expecting different results." We have continually allowed the same tired politicians with the same tired ideas to continually get reelected. As a result, we find ourselves in the dire economic straits we are in today.
The second quote comes from Eric Bonse, writing for the German publication, Die Tagezeitung. Mr. Bonse summarized the recent meeting of the leaders from Canada, Russia, France, Germany, Italy, Japan, the U.K. and the U.S. who got together at Camp David in mid-May to try and figure out how to fix the broken economies around the world. Mr. Bonse found Barack Obama to be "a fine host" but not much of a leader or facilitator.
The outcome form the meeting resulted in only a tepid statement that all of the leaders were "in favor of growth." That's about as deep, inspiring, and effective as saying I would rather have a cupcake than a root canal. But Mr; Bonse had a much better observation: "Which proves that they don't have the slightest idea how to get about solving the Euro crisis. The summit produced on a general sense of bewilderment." Well said.
We invite all readers of this blog to visit our new website, "The United States Of Purple," at
http://www.unitedstatesofpurple.com/
The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.
The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/
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