Deficit Will Grow While Economy Shrinks

Greg Hunter’s USAWatchdog.com

I appreciate what the Tea Party and folks like Congressman Paul Ryan are trying to do.  Mr. Ryan, who is the House Budget Committee Chairman, said when the debt deal passed, “This is a down payment on the problem and it’s a good step in the right direction.”  Ryan went on to make what is probably the most important point, “And it is a huge cultural change to this institution.”  Amen to that Mr. Congressman, but this debt reduction bill is like trying to bail water out of a battleship with a thimble.

This “step” should have been taken a long time ago.  The new legislation will add $2.4 trillion to the $14.3 trillion national debt in a little over a year.  And we don’t even start saving money until after the debt reaches $16.7 trillion!  This bill doesn’t even cut the deficit.  It just slows the growth of government spending to around 8% a year!  So, even if Congress cuts $2.1 trillion out of the budget over the next 10 years, we will still be running annual deficits of more than $1 trillion.  That rosy scenario is only possible if the economy does not get any worse.  Recent economic data is signaling American business activity is about to take another cliff dive.  Housing is bottom bouncing with a shadow inventory that is now 3.35 million homes and growing.  The true unemployment rate is now 22.7% (if computed the way BLS did it in 1994).   The recent year over year 1.6% growth reported by the Bureau of Labor Statistics in the Gross Domestic Product (GDP) is a statistical crock, according to economist John Williams of Shadowstats.com.  In his most recent report, Williams said, “The SGS Alternate-GDP estimate for second-quarter 2011 is an approximate annual contraction of 2.8% versus the official estimate of a 1.6% gain.  Such is more negative than the alternate 2.6% annual contraction (2.2% official gain) in the first-quarter.”  Double-dip here we come.  

So, in reality, the economy is contracting at an increasing rate compared to last year–not expanding.  Things have turned so negative recently; there is increasing chatter on mainstream media about a third round of quantitative easing, or money printing (QE3.)  You might remember a post I wrote this past January where I said, “In summary, all the experts I polled think QE Will Not End.  That will surely mean an imploding U.S. dollar and exploding inflation.  This is scheduled to happen by the end of June, making this the most predictable financial calamity in history.”  (Click here for the complete post from January 2011.)  What is happening today?  The dollar is tanking, gold is on a tear, and the economy is headed for another fall.

Bill Gross, head of the world’s biggest bond fund (PIMCO), thinks QE3 is probably on its way too from the Fed, but in a different form than QE2.  Gross said yesterday he was not impressed with the recent deficit reduction deal.  Gross called it a “sound and fury significantly nothing type of event,” or, in other words, just a lot of noise.  On CNBC, he went on to say, “I mean there’s been $1 trillion of cuts, but they’re basically back loaded.  Nothing takes place in 2012.  It all begins in 2013.  And actually, it’s slower economic growth if it comes as we suggest.  It probably will increase the deficit more than these packages will decrease it.” 

What do you think will happen to tax receipts coming into the federal government if the economy tanks?  If you guessed the government will collect less money in taxes, you are correct.   Not only will the deficit grow, but the $2.4 trillion that is supposed to last through the 2012 election is going to be used up at a much faster pace.  Peter Schiff, President of Euro Pacific Capital, said this week on FOX, “The one bit of irony here is the President thinks they’ve raised the debt ceiling enough to get through the next election.  I think he’s probably wrong.  I think the economy is going to be so weak between now and then that the deficit is going to be so much worse than they think, it’s going to be that we might run into the debt ceiling long before the November election.”   

I hate to break this to Congress, but America does not have 10 years to get its house in order.  There have been recent predictions by financial experts of another economic meltdown by the end of 2012 or beginning of 2013. (Click here for more on the coming economic collapse prediction.)  Something has to be done now, and we just lost an opportunity to truly turn the ship of state around.  Like her or not, that is exactly the same point Congresswoman Michele Bachmann made this week in a FOX News interview when she talked about thousands of recently announced layoffs.  She said, “. . . Cisco is laying off 6,500 employees. Boeing who would love to add thousands of jobs in South Carolina and now it’s that they’re laying off 1,100 jobs in California. . . . these companies . . . can’t make cuts over 10 years. They have to make them immediately. Government doesn’t act like that.”  (Click here for the complete Bachmann interview.)  

I don’t know if I would vote for Ms. Bachmann for President, but I find it difficult to disagree with her logic on this subject.  By the end of next year, America will be in debt to the tune of $16.7 trillion. That staggering amount is way more than all the goods and services the country produces in a year.

Comments
  1. Hoppe

    Greg, it is hard to know what the Masters of the Universe ( Central Bankers) plan for our nation and others struggling with mountains of liabilities. You can bet it involves further indentured service of millions of Americans to banks and fiat debt.

    While cities, like Vallejo California and Central Falls, R.I. have the luxury ( yes I said luxury) of bankruptcy law, our country does not. In fact those cities are microcosms of what is happening in America. Their administrations have run out of other people’s money (OPM)to spend on expensive public welfare schemes.

    There are really three sides to this debate on how to keep our government funded.

    1. Increase taxes (OPM), while ignoring the ability of OP to actually earn and pay more, and continue to borrow from the Masters of the Universe.-Democrats-

    2. Reduce spending of OPM’s, while leaving monetary policy in the hands of the Masters of the Universe, thus leaving the cycle machine intact.-Republicans, the party of Lincoln

    3. Get rid of the source of debt – shut down the Masters of the Universe ( the FED) and hobble our ability to borrow like a drunken sailor. Ron Paul and the Tea Party.

    The Central Bank must be exposed for what it is, and we need a leader courageous enough to do that, like Andrew Jackson and JFK were.

    • Greg

      Hoppe,
      I think that is part of what Ron Paul’s new bill is about. He wants to stiff the Fed for $1.6 trillion. That’s the least the Fed can do since if bailed out the world at 10 times that amount. Thank you fro your comment and analysis.
      Greg

    • Michael

      It is my recollection that Lincoln was in the Whig party? Also, you left out Teddy Roosevelt(sp). Teddy should be with Jackson, as he took on the vested interests and was a great Patriot and his sons fought in the great war.

    • MasterLuke

      Calling the Centeral Bankers “Masters of the Universe” is like calling our current pope holy. They both think they are what they aren’t.

      • Greg

        Master Luke,
        Amen brother!
        Greg

  2. John Bernard

    Well put Greg. Inflation is creeping up and most folks will either act or be surprised when its full impact is felt. The Democrats are hoping that the snoozing public will continue to sleep and when awake buy into their class warfare rhetoric. The Republicans have practically guaranteed Obama’s re-election as none the entitlement pain will be felt until 2013. In that year the Medicare reductions kick in along with other cash draining programs. The elected pigs at the trough will be afraid to implement the cuts; Obama will go into retirement (if we’re lucky) and the rest of us will start circling the drain.

    Borrow now cut later is a very bad cynical joke. It is now too late for gloom and doom it is here.

    • Greg

      John,
      Great line: “Borrow now cut later is a very bad cynical joke. It is now too late for gloom and doom it is here.” Thank you man!!!
      Greg

  3. Art Barnes

    Greg, last minute debt deal was a done deal long ago. They all got their photops in, everyone said they hated it but had to vote for it. Speaker of the House criss-crossed the talk show circuit for months saying he wouldn’t vote to raise it without tax relief, lips moving again from the leadership. They were all worried about the markets. These seditious men and women put us here and now pretend they “got 98 percent of what they wanted” to fix it (Speaker once again). This deal was a real joke and the markets so far has not bought it as anything but smoke and mirrors.

    Your comments on the economy is so correct, its tanking and Washington has run out of tricks but the Fed is not done, some big shots on Wall Street were reported to have stated yesterday that they wanted the Fed to effect more easing; the Fed will, and inflation will shift to third gear. Companies are still laying off workers, July report of layoffs was the highest in last 16 months. The GREAT CONTRACTION IS HERE! One thing you didn’t mention is that as gold skyrockets that also triggers the Fed to go to QE3 so as to keep the Fed relevant, as they can print money but they can’t pan for gold! QE3 will be here within 30 days just watch for the announcement. My bet is that this economy is tanking and has lost its ability to create jobs worth working at, a downward spiral is a sure bet, betting on the Fed and Washington to fix is a sucker bet.

    • Greg

      Thank you Art and Frank for great comments (as usual) that add to the content of this site!!!
      Greg

  4. Frank Brady

    The “Tea Party” people that I know are furious with the entire GOP leadership and unalterably opposed to the entire “debt ceiling reduction” scam.

    There are no real cuts in spending. This “deal” reduces the amount of planned additional federal spending from $10 trillion to “only” $7 trillion over the next 10 years. Even that false $3 trillion dollar “savings” is a myth because (1) no Congress can bind a future Congress to any course of action, let along for 10 years and (2) the savings are based on the economy experiencing real growth of more than 4% for the next 10 years.

    Worst of all, the so-called “Super Committee” that is to be appointed by the leadership to impose the “next step” in this scheme is completely unconstitutional. It would allow, for example, a bloc of 34 votes in the Senate and 144 in the House to practically impose its will on the entire nation. The “Super Committee” amounts to a 21st Century version of the old Soviet Politburo.

    We are in a great deal of trouble, Greg.

    Frank Brady

  5. Jim Coath

    Things should have been allowed to reset a long time ago. The zombie economy lurches on, as we blow out our currency.

    • Greg

      Well said Jim!
      Greg

  6. Henry

    Greg, another good assessment as usual. As a good friend of mine likes to say, “we are so hosed”. The people running the show are either utterly clueless with no spine, or they are deliberately out to destroy our economy, and more.
    Speaking of deliberate destruction, I noticed that your list of favorite sites includes http://rememberbuilding7.org/ Anyone who has a basic knowledge of high school physics (or simply good mechanical common sense) can see that WTC7 was a controlled demolition. A steel framed structure can’t crush itself at the same rate it would fall through air. Free fall means free of resistance, and thousands of tons of interconnected steel columns will certainly produce resistance. A car will not accelerate down a steep hill at the same rate whether on the open road or through a row of parked cars (even if a few of them are on fire).
    WTC7’s free fall has been well documented, and is no longer denied or debated. Even the hired shills at NIST have finally acknowledged WTC7’s free fall. David Chandler, a physics teacher, has some excellent videos here: http://911speakout.org
    It’s was very refreshing to see that site on your list of favorites.
    Like the truth about our economy, the truth about 9-11 is actively suppressed by the media. 9-11 was clearly an inside job. It was the “New Pearl Harbor” desired by the authors of “PNAC”.

    • Greg

      Thank you Henery for the comment and links.
      Greg

    • Davis

      It seems like about once a month or so we get another article somewhere either raising questions if not making nefarious accusations about the fate of Building 7 at the World Trade Center. The latest being that it was deliberately brought down so that it could be done in a controlled manner so as to minimize any collateral damage of it coming down on its own.

      Whether it’s this scenario or any of the others, there are a couple of questions that I never see addressed. One: If it was a controlled demolition, how was it done so quickly? There exist many video productions of controlled demolitions. They all, without exception, document how it is a well thought out, planned and fully engineered process involving specific physical modifications to the structure that can take weeks if not months to put into place before the sirens go off and the button is pushed. Two: Even if one were to dismiss question #1 and contend that it was “rush job” executed to some pre- arranged plan, how can it be explained that during those events of that terrible day, as literally dozens if not hundreds of cameras both of the news media and private citizens, were focused on ground zero, no one has come forth with any video of these alleged demolition crews either going into or out of the building. Police, fire and rescue crews were everywhere, yet none have come forward to document any such “suspicious activity.”

      I do know that that the center of building 7 contained a large open area with large, long span beams supporting the structure above it. These beams, as manufactured and installed may well have been more than adequate to do the intended job and I’m sure calculated to factors of safety to withstand shock loads. Much of the strength of these kinds of beam structures comes from both the particular alloy used and from how they are heat treated to lock in particular grain structures in order to maximize and balance yield and tensile strengths. When these kinds of specially conditioned steels are subsequently subjected to prolonged exposure to heat, as with an uncontrolled fire, grain structures change, molecules revert from the stronger face centered structure to the weaker body centered structure, and their thermally engineered strength goes away. Already subjected to huge loads, coming out of design intent, that their new metallurgical condition can no longer sustain, they bend and collapse. Having been located centrally in the structure everything then fell into this now unsupported void, looking very much like a “controlled” event.

      Just my two cents worth, but I think it’s kind of an “Occam’s razor” kind of deal.

      • Henry

        Davis, WTC7 crushed itself with near perfect symmetry at a rate that is indistinguishable from free fall. That is quite literally physically impossible unless all the support columns lost all their integrity simultaneously. Ordinary, isolated office fires that didn’t even reach most of the steel frame could not possibly cause that sort of failure, nor could they cause the molten and vaporized steel that was documented by FEMA. Obviously, heat causes steel to lose its strength gradually, not instantly, and most of the steel frame was never heated. Please look at the WTC7 free fall videos at http://www.911speakout.org
        Also, some experts speak out about NIST’s nefarious “investigation”
        here. http://tv.globalresearch.ca/2011/08/911-explosive-evidence-experts-speak-out
        Obviously, the building was rigged for demolition prior to 9-11-01.

        • droidX-G

          I don’t see this as obvious. I’ve seen planned demos go wrong and you are using the debris field as proof that it was an inside job. How did they hide all the detonation cord explosives and wires? You couldn’t use radio. And what was the motive? If tihe US GOVT wanted to kill 3,000 people on one day they would not blow up a bldg to do it

        • Davis

          You are ignoring the point about the the large centrally located atrium in bldg #7. Phase trasitions can happen quite quickly once the transition temerature is reached and held. One the phase transition began the long support beams would indeed collapse quite quickly and pull everything above them into the void of the atrium in a near symetrical pattern resembling an implosion.

          • Henry

            You are ignoring the laws of physics. WTC7’s entire hurricane and earthquake resistant steel frame crushed itself at the same rate it would have fallen through air. Again, look at the WTC7 free fall video at http://911speakout.org Even the hired shill from NIST agrees that free fall can only take place when there is NO SUPPORT under the structure – but that was before NIST was forced to acknowledge WTC7’s free fall. If you think David Chandler and Sir Isaac Newton are mistaken, please tell us why, exactly. WTC7’s Free fall proves demolition, and demolition proves that 9-11 was an inside job. As for motive – thousands of SEC files were destroyed when WTC7 was demolished.

  7. brian

    It is no suprise that heads of foriegn governments like Russia are calling us here in the United States parasites on the world economy. Maybe Congress should take a vacation and go abroad, you know see the world, talk to some people besides the mindless morons in their media bubble.

    I think it is plain to see that foreign governments are steadily organizing to do more than just complain about the blatant abuse of the dollar supply, these governments are trying to find a way out from under our dollar and leave us behind………should they succeed we will all wish we were militarily invaded instead.

    • Greg

      Thank you Brian and G. Johnson for the good comments and for adding to the content of this post.
      Greg

  8. g.johnson

    just stumbled across keith olbermann’s comment on the “new deal”. powerful stuff. and very refreshing to notice that keith seems to have given up his old left wing ways.

    he is correct about this: if we do not get our asses off the couch and get into the streets now, we will not have the opportunity tomorrow.

    please do yourself a favor and watch:

    http://current.com/shows/countdown/videos/special-comment-the-four-great-hypocrisies-of-the-debt-deal

    henry, good job. but go easy. i get the feeling that most who come to this site are not ready for the whole truth quite yet. damn if they aint gettin there though 🙂

    • Greg

      G. Johnson,
      My only criticisum is that BOTH parties are respponsible for geting us into the giant mess we find ourselves now. Thank you for the comment and content.
      Greg

      • FamilyForce6

        I agree Greg. One of the big weapons used by the economic fascists (Congress) is the deception of choice between the parties. Anyone with the critical thinking skills of a high schooler can see there’s not a dime’s difference between the Ds and the Rs. e.g…
        -Secretary of Defense w/ Bush- Gates
        -Secretary of Defense w/ Obama-Gates
        -Tarp1- Republican president
        -Tarp2- Democrat president
        -Medicare partD (the largest corporate wellfare program in the history of the country to benefit big pharma)- Republican Congress/President
        Endless war on terror- pt1 Bush (R)
        Endless war on terror- pt2 Obama (D)(the peace candidate…RIGHT!)
        Party loyalty is for sheep being led to the slaughter, though many are waking up.

        • Greg

          Thank you FamilyForce6 and Master Luke.
          Greg

      • g.johnson

        huh?!

        not sure where that criticism comes from greg. olbermann has a long standing reputation for siding with the “liberal” point of view. my point above is that he seems to have come into the light and (in his criticism of the new deal) soundly and roundly condemns both parties as a bunch of go along to get along dead weight too busy working to keep their elected positions to actually do their jobs.

        i believe that i have been consistent in all my postings that i see the two party system as just two sides of the same coin. and both houses of congress eqally corupt on both sides of the aisle.

        • Greg

          G. Johnson,
          You are correct. Thank you for pointing that out.
          Greg

    • Henry

      G. I wouldn’t have brought WTC7’s demolition into the discussion if I hadn’t seen it in Greg’s favorite website list. 😉 I think ten years is long enough to wait for those who are a little uneasy about accepting the whole truth… 😉

  9. Davis

    Down Grading the Debt? It will never happen, not for now at least

    There are far too many pension funds, insurance companies, endowments, foundations, banks and mutual funds that are limited, by charter, to only owning AAA-rated debtpaper . If U.S. Treasuries were to be down graded to AA or AA+, the amount of Treasury dumping would utterly paralyze The Great Ponzi scheme. There is no way that a U.S.-based ratings agency will be ALLOWED to downgrade. You will see more of what we saw last night with Moodys. “AAA with a negative outlook” is as far as they will be allowed to go. Keep in mind these guys are paid by the banks for their services, and it the same bunch that rated all those worthless mortgage backed securities at AAA. They are as much a part of the scam as Ben and Timmy and company.

    • Greg

      Thank you Davis, I feel your frustration!!!
      Greg

    • MasterLuke

      They should call this time period “The Great Cover-Up”. Nothing to see ladies and gentleman just murder, rape, pillage . . .

    • Art Barnes

      I agree, what you said about the rating agencies has not been said, at least in public or on CNBC, etc. They will not be allowed to downgrade. If they were on the up and up to begin with they would have downgraded a few years back when the debt more than doubled. As with the government & the politicans the agencies are a farce and never truthfull designed to keep the ponzi in tact.

  10. Mountainaires

    Peter Schiff nails it again. Thanks Greg, great blog post.

    h/t to Financial Armageddon:

    Scott Walker’s warnings sound even more urgent lately:

    “We are less than three years away from where Greece had its debt crisis as to where they were from debt to GDP,” he said.

    The US is nearing the 100 percent threshold which historically shaves about one percentage point off GDP, which was just 1.3 percent for the second quarter and 0.4 percent for the first quarter.

    With the recent increase in the debt ceiling and continued higher budget deficits at the federal level, the US is on course for its own crisis, Walker said.

    “We are not exempt from a debt crisis,” he said. “We’re never going to default, because we can print money. At the same point in time, we have serious interest rate risk, we have serious currency risk, we have serious inflation risk over time. If it happens, it will be sudden and it will be very painful.”

    http://www.cnbc.com//id/43984077

    • Greg

      Mountainaries,
      Thank you for adding to the content of this post!
      greg

  11. Sam mass

    Greg,

    I agree with your economic analysis, but on your politics and thinking on the Tea Party types, you have completely lost me. These are the same people who blew the Social Security Surplus on Iraq and Afghanistan. They know nothing about anything.

    To think they have any answer than more wars and spending on the military.

    Thinking that any idiot politician has any answer is beyond ludicrous. They are a reflection on what we the people wanted and voted for.

    Sure the Tea Party wants to roll back the 13, 14, and 15 Amendments to the Constitution, but I do not consider that positive.

    Social Security is a net plus for the budget and has been since 1986 and the higher taxes put in at that time. Is it a problem in the future, sure, but if we use net present value, then Social Security should have a positive balance considering how much we the people and businesses have put in.

    • Greg

      Sam,
      The U.S. borrows 43 cents of every dollar it spends. The country needs big (and I mean very big) cuts to avert a dollar crisis. That includes Military, banker bailouts and some cuts to entitlement programs. If we do not get our financial house in order we will not have a country to argue about. Think Wiemar Germany, after their currency hyper-inflated to oblivion. Things got so bad there, Germans thought Hitler was a good idea. Of course it was a disaster for the entire world. America could be the next Germany and WE HAVE NUKES! I guess if I said I agree with Democrat Charlie Rangel that we need a draft if we go to war (which I do) that would make me a big liberal? Yes, I know Rangel is an alleged tax cheat, but that does not mean he is not able to come up with a good idea. There are (some) good ideas on all sides, but unfortunately way more bad ones. I appreciate your spirit and comments. Please keep them coming.
      Greg

    • FamilyForce6

      The godfather of the Tea Party movement is Ron Paul. Paul is a military non-interventionist (NOT an isolationist as often portrayed in the MSM) and directly attributes our debt crises to our foriegn policy. NO ONE talks foriegn policy change and that’s where we need to begin.
      The Neocons have hijacked the tea party movement and turned in to a bunch of tax-cut whiners that blame everything on Obama and have no real proposed cuts to spending. These are the same people that made fun of Paul during the 08 primary when he discussed monetary policy and the folly of our trillion-dollar endless war policy. He was right then and he’s still right. However, I saw personally the way the Republican party machine controls the selection of every candidate, even if it requires the breaking their own party rules and policies. It’s a rigged game, but the day of reckoning is arriving quickly.

  12. Mitch Bupp

    Inflation is Bernanke’s plan …. He suggested such when he talked to the Kansas FED about the stagflation of Japan. Bernanke said this in, “Japanese Monetary Policy: A Case of Self-Induced Paralysis?”
    He gave this speech to the Kansas FED in 1999.
    Here are some quotes from it and a link where I found it.
    Bernanke wrote, “The general argument that the monetary authorities can increase aggregate demand and prices, even if the nominal interest rate is zero, is as follows: Money, unlike other forms of government debt, pays zero interest and has infinite maturity. The monetary authorities can issue as much money as they like. Hence, if the price levels were truly independent of money issuance, then the monetary authorities could use the money they create to acquire indefinite quantities of goods and assets. This is manifestly impossible in equilibrium. Therefore money issuance must ultimately raise the price level, even if nominal interest rates are bounded at zero. This is an elementary argument, but, as we will see, it is quite corrosive of claims of monetary impotence.”

    I can not believe any economist or banker could ever honestly write, “Money, unlike other forms of government debt, pays zero interest and has infinite maturity.” I for one am glad to hear that we don’t pay interest! Has Bernanke, told anyone else in the government? Where does Bernanke think money comes from? The National Forest Money tree?

    Then the “master of the economic disaster” went on to qualify some foundations that would be essential to his economic theory. Bernanke added, “Well-designed and transparent legal and accounting systems, a sound regulatory structure that helps limit the risk exposure to banks and corporations and prudent fiscal policies that help instill public confidence in economic fundamentals, are all vital components of an overall strategy.”

    This must be a good joke … because we have no well-designed legal system or transparent accounting system. The only thing left to say is Bernanke’s last part of the speech which should make al of us demand his head on a proverbial stick!

    Bernanke concluded his speech this, “Most striking is the apparent unwillingness of the monetary authorities to experiment, to try anything that isn’t absolutely guaranteed to work. Perhaps it’s time for some Rooseveltian resolve in Japan.”

    http://www.princeton.edu/~pkrugman/bernanke_paralysis.pdf

    • Greg

      Mitch,
      You are correct! Inflation is the only thing you can count on!
      Greg

    • Art Barnes

      Here is a unique policy, abolish the Fed, it was voted in and it can be voted out. Its track record hasn’t exactly been good over the years and the few decades of properity it did help to manage we are now paying the price for that.

  13. M SMITH

    Greg, I spent all day Monday in a meeting, as a volunteer on a non profit agency to help the disabled. We use to have a small office, but now the State has stepped in & put us under their heavy hand. We now have to follow federal guide lines, instead of the ones where all monies went to help the disabled except 1% for operating cost to cover the overhead & operating cost to ensure ever one who qualified for our services got the help they needed. Now we have less money due to the agencies who are over us. It’s like we have become a part of the federal government with waste at so many points it’s damn right sickening. Here are some stats I want your readers to see, this was sent to me by a friend when I told them what had happen to use. Before you open your pocket books to help those in need, read this.

    The American Red Cross CEO and President ‘Marsha J. Evans’ salary for this year is $657,957.00 plus Expenses. Also the A. Red Cross signed a pack to work with Obama & FEMA & other government disasters relief agencies’

    The United Way President ‘Brian Gallagher receives a base salary of $375,000.00 plus many expense benefit & they give to illegals.

    UNCEIF CEO Caryl M. Stern receives $1,200,000.00 a year(100K a Month)plus all expenses & a Rolls Royce. Less than 5 cents of your dollar goes to the cause.

    The Salvation Army’s Commissioner Todd Bassett receives a salary of $13,000.00 a year(plus housing)for managing this 2 billion organization , 96% of all monies go to the cause!

    The American Legion National Commander receives $0.00 salary, your donations go to helping all Veterans, their families & the youth, no other words needed on this groups activities!
    No wonder why so many have chose to give less or they give to local run out fits that steer clear of any thing related to the government because of the mis-use of monies by their leaders & all the waste.

    What you wrote today was brought up during our lunch break, the group is made up of people from all walks of life,rich & poor. The CPA had some very interesting things to say about what was going on in Washington, he brought up ‘Chain CPI’ & what those in Washington ‘do not want’ the public to know. He said the CPI is already a crock & Chain CPI only makes it worse for the disabled & older retiree’s we set here trying to help! While the Obama admin adds more agencies the cost to tax payers will result in higher taxes in some form, be it inflation or deflation of the assets you now hold except PM’s & a few select items he went over with the group. Our CPA volunteer gave a free how to protect yourself against the bunch of old guard in Congress & why! He said just about the same thing you laid for us today before it ever was signed by Obama. He then gave a list of web sites to follow to stay current on news, I was pleased to hear your site was at the top of the list with the others he named.

    The question I have, where is all the big money parked at & where will it go next? If it’s now in bonds, will it start to flow into stocks & PM’s? I don’t have the answer, but what Obama & congress have done has proved to the world they do not have a clue on what they are doing. Gold & silver has yet began the crazy strong moves up & down, but when it does it will be a ride like never seen before in my life time & knowing when the time to get off will take having the skills that Jim Sinclair teaches you & I hope I have been a good student. I hope others will follow your news Greg, it will be more important as the days wind down to 2016!
    Thanks again I had to let folks know about how these non profits have been high jacked.

    • Greg

      Good stuff M.Smith!!
      Greg

  14. joe johnson

    When you starrt quoting holy rolling lunatics like michele Bachmann you’ve just lost all credibility. Is she really pointing to mass layoffs as an exaqmple of the need for strict austerity measures. maybe if the U.S. government ends all it’s deficit spending these companies will immediately begin investing the trillions they are sitting on into the economy. Than again maybe they’ll just continue what they’ve been doing for the last few decades and invest in expanding overseas workforces and facilities. After all, paying themselves ever larger bonuses with the labor savings has been part of the U.S. multinational business model for a very long time. We see how well it’s worked so far.

    • Greg

      Joe,
      If you think we can simply “grow” our way out of this you are in dreamland, and do not grasp the dire situation the U.S. is in. We should have taken the big banks to receivership in 2008 but instead we transferred the debt to the taxpayer. Now the government can and will ultimately default and it will take the form of hyperinflation. You are stuck in the phony Right-Left paradigm. The so-called liberal President Obama is backed by the big banks just like the Republicans. Why aren’t the ultra left liberals talking about the ongoing bank bailouts? Please do not come on this site and attack my credibility with your narrow one sided point of view. The U.S. borrows 43 cents of every dollar it spends. This is only possible because the U.S. dollar is the world reserve currency. This will not be the case in the not too distant future. Thank you for your comment.
      Greg

      • joe johnson

        Greg,

        Sorry I offended your delicate sensibilities, after all, it is your site. What I don’t understand is what part of my comment led you to believe I was stuck in a left-right paradigm. Any fool can see that Obama represents the same Wall Street gansters and big business interests as did the majority of his predecessors. He’s at best a used car salesman and more likely a two-faced con artist and a crook. I just get irritated at seemingly intelligent folk invoking the inane ramblings of a disturbed individual such as Bachmann as words to be heeded. If pointing to the economic assessment of a zero accomplishment religous zealot is the best there is to offer, then why bother. That being stated, I must say I am impressed with the fact that you will actually post comments from people who disagree with you, at least people that you perceive as disagreeing with you.

        • Greg

          We’ll just have to disagree on the veracity of Bachmann’s statement. That said, I appreciate your whit and passion, so please keep commenting.
          Greg

  15. Ambrose

    Greg,

    One thing I would like to point out is that most companies that announced big layoffs are actually making money now. These layoffs are the results of restructuring the corporations to squeeze EVEN MORE PROFITS for their shareholders. I have seen so many big corporations make so-called “profits” by cutting their payrolls, even they get less sales in business. President Obama looks silly every time he turns to Big Corporation CEO for advices to solve the high unemployment problem in the U.S. Does he realize that these CEO are actually the causes of our high unemployment rates. They receive millions and millions of dollars in bonus by layoff more workers? The jobs are not gone – they are just replaced by oversea workers.

    While our government is in chaos, where are the nine “High Gods” of the U.S. Supreme Court? After we were “robbed” by big banks and big corporations from Wall Street in 2008, the Court was silent. I don’t know if there is anything they can do. All I know is that crimes were committed and justices were not served.

    Unfortunately our voices are weaker than those who can afford to pay thousands of dollars at the dinner tables with the U.S. President or members of the Congress.

    Ambrose

    • Greg

      Spot on Ambrose. Thank you!
      Greg

    • Art Barnes

      The nine high gods of the supreme court are just more politicans in black robes, they always remain loyal to the hacks who placed them in their mysterious chambers. Most of them have law graduates writing their rulings because they are too busy golfing and taking vacations to do any real work. Further, most of them, if not 90 percent, never tried more than one case in a real court, they rose up the judge circuit and got use to free government money freshh out of school. Oliver Wendel Homes they simply are not!

  16. Charles

    Please don’t fall for Bachmann’s act. Ron Paul was Ron Paul before Michelle Bachmann became Ron Paul.

  17. Baja Bryan

    Nobody plans on failing but our elected representatives have completely failed to plan. Unless of course that plan is to completely destroy the dollar, our economy and our collective futures. It’s high time for a reality and accountability check mixed with a large dose of objective action. I’m sick of the political theatrics and nonsense.

  18. Jerry

    Baron Nathan Mayer Rothschild once said, “I care not what puppet is placed on the throne of England to rule the empire…The man that controls Britain’s money supply controls the British Empire. And I control the money supply.”

    As most of you may know, The House of Rothschild banking empire (cartel) also owns and controls our nations money supply at the Federal Reserve Bank in the USA.

    WE will be slaves to their inflationary policies forever if we do not wake up and end their control of our money in their central bank and it’s fractional reserve monetary system here in America and the world.

    Our forefathers had a monetary policy before the Revolutionary war that used the currency called “Colonial Scrip.” This money was printed only when a true value on a commodity was established. There was no inflation, just honest money creation thru wealth generation created by a real product or service. The Colonial Scrip could be added or taken out of circulation as something of value was created, or depleted of value. Our forefathers had it right and Britain didn’t like it. They wanted to control our money…so the Revolutionary war begins.

    Thanks for your hard work and insight Greg, I look forward to reading your thoughtful column daily.

    • Greg

      Thank you Jerry for the comment and support.
      Greg

  19. Rick

    Another excellent and informative article.. Thank you Greg.

    • Greg

      Thank you Rick and M. Smith.
      Greg

  20. M SMITH

    Are you responsible enough to invest in gold & silver? The title seems fitting to the millions who hang on to every word put out by the MSM’s elite teams of so called economic experts taught buy the best elite Keynesian schools of finance offered in the USA & the rest of the western world. What is said here in this small article is so true is should bring those asleep at the wheel a wake faster than a deer in your head lights at midnight after work. http://news.coinupdate.com/are-you-responsible-enough-to-gold-and-silver/.

    Greg, I had to get back in when you were attacked for telling the truth, no matter what, it will be those who keep track of the truth & use those facts that will have less harder rows to hoe! This little article speaks to how the real world around us works. Just the plain simple facts, no more,no less. You may say what you wish,but when it comes to 98% of the politicians over my life time, they were out for one thing only, themselves, like it or not, that the ways it has been & is now only coming to hit millions in the face as they see their world fall apart around them. Now we will always have those that cling to the hope that, yes the check is coming tomorrow, the gov has never let me down, well it has been doing that for more than a hundred years now & the chairs are all filled but the music still plays on as if there is no end in site. Let tell you, after what I wittiness Monday, the Crap has hit fan, but there’s no power to blow it your way Yet! What was it W. Earp said ,hells coming & it’s coming for you! In the movies things always seem to work out, but this ain’t the movies folks, fasten your seat belts, it’s long ride to the bottom!

  21. Bob

    I don’t even get mad about the fake money system and the so called free trade anymore. 10 YEARS and the fake government leaders are still lying about 9/11. The dollar is the last worry I have because we are living in a lawless land so that fact alone means we are screwed. Maybe the few honest leaders in DC will form a gang and start a truth movement. I have stop reading most of the good information you put out and the same with most other sites. I just like to read the comments. All the good ideas and how 2+2=4 has no meaning without the rule of law. It’s so crazy , because we are sitting just waiting. Who ever is controlling the fools in DC, they must have the gun power to blow up a whole city. Some gang is Black mailing this nation , it’s just to crazy. The killers will be at are door steps with the failing dollar. They will try and kick us good and hard before we can regroup. You see once are dollars is worthless we won’t be useful to the killers but will be a threat. It’s how the street rules are. We are in a life an death street fight.

  22. Jan

    Greg,
    I think you are correct about the hitting the debt ceiling before the election. The President wanted a free pass to do what he does best, campaign.

    We are in deep trouble then one of his Economic Advisors tells the Chamber of Commerce members to start hiring at the same time he is closing factories, shipping jobs overseas and keeping taxable profit out of the US until he gets a tax free pass.

    http://theeconomiccollapseblog.com/archives/ge-ceo-jeffrey-immelt-the-head-of-obamas-jobs-council-is-moving-jobs-and-economic-infrastructure-to-china-at-a-blistering-pace

    We can vote with our dollars and thank these CEO’s by not buying their products.

  23. Willard Ferch

    When our inner voice speaks, we should listen. When I first heard an Obama campaign speech, I told my wife he was a ringer, not who he appears to be. When he was elected, I told my Lib brother that O had one aim, and that was to bring this country to its knees. If he believed in capitalistic free enterprise and a free market, everything he’s done would be considered illogical, but if he’s a Marxist, everything he’s done, economy-wise and regulations-wise, is completely logical. The super-rich desire socialism, and according to the news, the super-rich have donated $35 million to his campaign already. I heard Larry Kudlow wondering in wonder why O and the Dems were doing what they were doing; it was senseless. I wanted to yell at him, “Just plug into your formula that they want to bring this country to its knees, then it will all make sense!” Sometimes you have to demolish in order to rebuild. Fiddlin’

  24. M SMITH

    Greg, in 2008 you & Jim spoke & the video is on http://www.jsmineset.com today, readers should view it. Like Jim said, try to get out debt,the common mans guide to not fall off the cliff with rest of the herd. If you got early on PM’s you are in better shape than those who have relied on the MSM to tell the truth. Jim never said to buy gold or silver if you had to go into debt, get your house in order was top of the list, if can get debt free, do so, if not do not go deeper in debt, you will only be helping the big bankers and they have suck trillions out Americans pockets already along side with the government! PM’s,food, shelter and personal protection will let you sleep better at night. The markets are swinging wildly today around the globe as gold hit $1682.00 & then fell back as did silver. Jim said that to hold your ground, Alf Fields & Armstrong’s numbers look more real than before! Money is moving in to bonds again, why are bonds seen as a safe haven, Martin Armstrong has answered a question sent in by a professional trader and the his here for those asking the same questions about the future of bond & stock markets. http://armstrongeconomics.files.wordpress.com/2001/08/armstrongeconomics-why-bonds-always-rally-080111.pdf. Reading it & understanding are two different things. If anyone understands Martins views, I would like to hear them. I don’t play with the big boys, but I want to stay on top of of the base metals & PM’s moves up & down, like todays action!

    The economy has people selling things so cheap compared to 4 years ago, bargains are every where, the banks have so many houses they can’t sell they are listing above ground pools with all the decks & other stuff that goes with them for free if you will come and remove them from the property, it’s cheaper for them to give them away than having to maintain them & insurance cost! Keep a eye on the weekly local for sale ads, every thing from scrap metal to lawn & garden equipment is selling so cheap, it really shows how bad the folks are hurting from the actions of Wall Street & Washington DC law makers follies. Even as most of congress have gone home, their are some staying to keep the current session of congress open to stop any recess appointments by Obama, the same was done when Bush was in office by the Dem’s. Obama picks so far have cost tax payers & job seekers little to look forward to while wall street banks rakes in the profits as they plan to make lay offs & add more to the bad job numbers growing as each day passes.

    • Greg

      Thank you M.Smith I am also posting this video today.
      Greg

  25. John

    When are people going to wake up and realize they are being pimped out by the ruling elites that really run the country. This whole debt ceiling “play” we were forced to watch for the past several months was deserving of an Oscar! PEOPLE WAKE UP! The debt ceiling “fake drama play” was created—made up—by the ruling classes highly paid politicians. Those politicians serve in BOTH parties. There is no left/right paradigm. Their real plan is to make regular Americans (95% of us) think that we need to cut benefits to all government programs—Social Security, Medicaid, Medicare and other key programs that are good for regular Americans. They LIE about these being the cause of our huge debt problem. IT IS NOT!

    The REAL causes of our debt problem are as follows:

    1. The FED(private bankers) and the interest they charge the treasury to issue OUR money.

    2. Huge military spending and military adventures around the world since Vietnam to today—think military industrial complex (IKE warned us and JFK took them on along with the bankers and the CIA and where is he?)

    3. Corporate welfare — Our tax dollars going to HELP corporations profiting millions and billions of dollars.

    4. The decline in top marginal tax rates on the most and outlandishly wealthy in this country—individuals and corporations.

    Today voting is a joke, because every vote for 95% of us is a waste. It doesn’t matter who is elected and what party is in power. They all get their marching order from the same people. Finally, no one on the MSM gives you real information, because again the elites own that too. Which is why they have their well paid hacks telling every regular American to get back into the markets.

    The ruling class want a stupid, uniformed society and it seems they are getting exactly what they want, again.

  26. John

    Congresswoman Michele Bachmann is a huge hypocrite! Look into her real story and you will realize that Michele Bachmann and her husband have been taking advantage of many government programs that she publicity ridicules and now wants to destroy.

  27. robert heartland

    You have to grow an economy out of a Great Depression not make all kinds of cuts. But people will have to relearn this lesson all over again won’t they! And it’s going to really cost them to do it. Maybe their house,their savings,their job,possibly the nation. This congress is full of losers and posers. Maybe it’s time for a new national election before they do anything even more stupid.

    • Greg

      Robert,
      You are correct but, you cannot grow the deficit exponentially right along with the economy. I agree with you though, there must be some growth and some pain. Yes Congress is a giant letdown. There are no statesmen, just “losers and posers.”
      Thank you for the comment.
      Greg

  28. markm

    Hey Greg,

    So, you would vote for Obama over Bachman?

    Forget the dog-catcher, I would vote for the dog over Obama!

    markm

    • Greg

      Markm,
      I think I’ll vote for the dog too! Thanks MarkM for the comment.
      Greg

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