7 Reasons to Be Concerned About the Future, Today we are facing major issues that will ultimately affect each one of us. They are real possibilities…and they will happen. They are bigger than our country. Bigger than our elections. Even bigger than the Fed actions. Here are 7 reasons to pay attention to what is happening in the world today.
Reasons to Be Concerned About the Future
We don’t trust our leaders, both political and economic. When trust is broken, big time problems occur.
Do you trust your political leaders? Most of us don’t. I just read a survey that stated the U.S. congress had an approval rating of 11%–which was lower than the approval rating of Fidel Castro. Yet we continue to elect these leaders back, again and again. Why? I have no idea.
Yet I do know that there is a loss of integrity of national political and economic leadership. It matters not what party. I am now convinced that they are just two heads of the same monster. We don’t trust our leaders, understand them, or sadly, even believe what they say. What really scares me is how they are connected at the hip with the large corporate banks and investment houses. The politicians are controlled by corporations.
And we keep electing them over and over and over…The result of this situation is a full loss of the RULE OF LAW in our country when it comes to financial and economic crimes. Consider how there have been NO CONVICTIONS of persons who instigated and propagated the lies and cover-ups of the large housing mortgage crisis and the other commodity firm improprieties.
The United States debt and budget deficit have paralyzed our options and our future…and that will never be paid back.
Yes, you hear me right. The debt won’t be paid by our grandkids. It is mathematically impossible. Even Paul Ryan can’t fix it. In fact, the debt will continue to increase regardless of what the politicians tell you. There is no political will to change our country’s habits and work toward a real solution.
This goes as well for European and Asian countries. The debt is so large that it cannot and never will be repaid. The only other option is an ultimate default of our debt, which would also include the Social Security Trust Fund. The United States spends almost an additional 43 cents for every dollar that the US government takes in through all sources.
It will tap the US credit card and put that amount on our tab. So nearly one third of every dollar spent by the US government is magically generated through additional debt. Remember the big debt argument in Congress a couple of months back? The argument that nearly shut down the government? Do you know that they were arguing about $30 billion of expenditures?
These guys in DC couldn’t even agree on how to manage this, and it is only about 1-2% of the total budget they were trying to cut. That would be like you or me arguing over whether we should cut one or two lattes a week out of our lifestyle. There is no backbone to do anything substantive–regardless of party. It’s sad, but this is a hopeless exercise.
I haven’t even brought up the future entitlement obligations, municipal and state debt (California and Illinois are effectively bankrupt), bank derivatives, and pension plan obligations that can’t and won’t be met. But because these numbers are so big, it is hard to get a real grasp of what they mean. We could put this discussion into terms we can better understand. Consider the United States as family that brings home $50,000 year but spends a total of $71,000.
They argue that they need to get their spending under control. Why? Because they get the extra $21,000 from a credit card…each year. Right now, their balance is $125,000. The good news is that interest rate is only 2%. But the bad news is that credit card company is getting concerned about their huge balance and may start cutting them off and increasing the interest rate.
What do you think will happen when the market decides to do that? Trying to put together a plan to fix this when that happens will result in only one option…default and bankruptcy. Ever wonder why we have to have a zero interest policy initiated by the Fed? The amount of interest increase would IMMEDIATELY bankrupt the US.
So, they penalize all savers by giving them NO interest on their investments. At the same time every pension plan in the US is bankrupted, as these plans REQUIRE an 8% return on their funds in order to keep their funds in the black and pay back obligations to retirees.
Jobs are not coming back. And the unemployment rate in the US is not 8%. It is actually closer to 23%!
Like most government statistics, the reported unemployment rate makes no sense. When you look deeper you see that the numbers are purposely wrong, and there’s no integrity in attempting to quantify what the unemployment rate really is. If officials admitted the extent of the true unemployment rate, it would burst the idea that we are not in a recession right now.
The 8% rate is based on the assumption that when people drop off of the unemployment compensation rolls, they are happily employed. That is inaccurate. Many Americans lose their unemployment compensation because their allotted time ran out, not because they became employed. Shadowstats.com, which tracks the real unemployment numbers along with other statistics, indicates that the true unemployment rate is close to 23%. This figure includes those who have been dropped from the unemployment rolls but are still unemployed.
It also includes those discouraged workers who cannot find a job at all and those who want a full time job but are working only part time. In fact, one of the largest sectors in employment that actually is increasing is part-time minimum wage employment. Desperate people will take any jobs they can find. As far as job availability, there is no indication at all of any growth engine that will fuel growth.
The government will try its own programs, but those are limited and 100% financed by debt. Unless there is some new discovery or growth engine, high unemployment isn’t look to get better, but worse. The jobs that were once here were fueled by debt, and are not coming back.
Housing is not recovering. In fact, it has yet to hit bottom.
Unless you live in Washington DC or New York City, the value of your house is not increasing. There is lots of noise that things “might” be getting better. These same ideas have been circulating since 2009, when no one could believe that real estate could really go down. But beware, those buying now may soon find themselves underwater as another leg down in housing value hits.
Just think a moment. Who is buying houses now? It’s not young people. They are so saddled with student loans, a great number are back to living with Mom and Dad. Prospects for future home purchases are dim because of their debt repayment of their loans. They can’t qualify for loans with that much debt. It’s not the parents trying to move up to larger homes more suitable for their growing families.
How could they do that when they can’t sell their existing homes because they are underwater with their mortgages and would have to come up with huge amounts of cash just to get out from underneath those existing houses? This severely limits their mobility to the point that if people find jobs other cities, they’d have to turn them down or take on long-range commutes…because they can’t sell their homes.
It’s not retiring boomers. In fact, they too are trying to sell their houses and move into smaller ones, but no one is buying the larger homes. In the past, many people wanted to move up to a larger home, but because they can’t sell the one they are in, they can’t make the change.
Finally, the existing foreclosures will continue as so many who are underwater with their mortgages will ultimately have to default. The banks have been dragging their feet on foreclosing…and they continue to do so. If they allowed it to continue at a normal market pace, the value of the housing market would immediately begin its next leg down. In a nutshell, this market is resetting. It will be fully reset when the foreclosure and underwater mortgage issues are fully worked out.
The Fed has printed so much…the purchasing power of the US dollar is a fraction of what it once was.
So what happens when you print lots of money? The value of the money drops. What it will purchase will drop, when measured against hard goods. So take a serious look at the following; my guess is that you will be surprised at how the purchasing power of the $ has decreased.
If you had $100 in 1970, you could purchase a certain basket of goods. But today, that $100 will only purchase 17% of the same basket of goods. It has lost nearly 83% of its value.
Surprised? That is slow inflation designed to tax you unknowingly, which our banks and the Federal Reserve have done to our currency. And it is getting worse. The Fed has just announced an unlimited printing program to ultimately put more money into the system.
The plan is to purchase bad assets (mortgages) from the big banks and giving them free money. The Fed say this will trickle down to the consumer, but that hasn’t happened in similar situations in the past. What is important for all of us though is the purchasing power of our $$. Because of the Fed’s actions it will continue to decrease–however, it will accelerate. Measuringworth.com is a great site to help you make your own analysis. Here are a couple of examples:
- Did you know that the government calculates inflation without the cost of food and energy? Again, statistics are artificially low to get us all to buy into their games.
- When I learned to drive in the early 70s, a gallon of gas cost 20 cents, or two silver dimes. I can still buy that gas for two real silver dimes. Two silver dimes used to be worth 20 cents, but now they are worth nearly $5.00. What has happened? Well, the value of the gas is the same. The value of the silver is the same. The difference is the value of the dollar currency. It has decreased. It will continue to do so.
- A final example–just an observation though. When I was growing up, it took only one wage earner to make a living for a family. As I started my family, that changed. Soon it took both parents working , or two wage earners, to make it. Now even two wage earners in a family are having a difficult time…and it is getting worse. Why? Stuff is costing more because are wages in USD buy less and less.
Geopolitical events may lead to a major catastrophe or even war.
I don’t think we really understand how strongly we are tied to the hip with the rest of the world. If the country of Greece financially defaults, it will have huge impact not just on Europe but on the US as well. A default in Europe will greatly affect US banks, as they own much of the sovereign debt that will be defaulted on.
That’s why the US treasury secretary is over there constantly trying to calm things down. Keep an eye on the demonstrations occurring in Spain, Italy, Portugal, and Japan. These result from governments trying to cut back their spending and the hard consequences that are bringing many people out on the streets. Could this happen in the US when they start “cutting the budget”? I believe so.
The Middle East uprising is another issue to watch, though it is too complicated for me to comment on here. But I do know that the US is now sending a third carrier group to Iran. Some see this as a potential start of WW III. Japan and China are at each other’s throats arguing over real estate in the South China Sea. What next?
And how about some other issues:
Student loan debt is now higher than consumer loan debt. Interesting that our existing system funds student loans by giving FREE money to the banks, which then charge 6-8% to the students. Gee…who profits here? Ever wonder why the government, which blusters how important higher education is, gives the money to the banks so they can make a huge killing, instead of loaning directly to the students at the same rates they give the banks (namely, 0%)?
Banks are feeding off of students, many of whom have entered into this lifelong debt serfdom without understanding the full implications. There are more big issues with healthcare, bank bailouts, homeland security, undeclared wars that we could discuss as well. There are so many things to be concerned about.
Why, in spite of all that, I don’t live in fear
At another time, I will describe what I am doing about all this for my family. But my very first thought of what I should do is the number one reason why I can rest in the middle of all these concerning issues:
The reason I don’t have to fear the future is that we have a heavenly father that loves us and is with us all.
No sermon here from me. The reality of God’s love is so great, that even if I don’t see what is happening in my life, I can trust him. So I do.
If some crisis scenario hits our nation–perhaps a crashing economic system or even worse–on that day, my wife and I will get up in the morning like we always do and go outside to feed our pigs and chickens, check on the dogs, and do the rest of our daily chores. I have chosen to refuse to live in fear…rather I choose to live by faith.