Americans Buying Gold/Silver: Big U.S. Pricing Advantage

Two years ago in this space, I penned an essay discussing how Americans – and other countries that are “dollarized” – where the local currency is either the USD or pegged to it – had a significant advantage when it came to getting the most for their money when exchanging dollars for precious metals.

Lately I looked into this issue again and the good news is – it’s still a good deal. In relation to a lot of other folks, even better than before! But the bad news is that this might not be the case much longer…

The Cando Disadvantage

The Canadian Dollar is known in the trade as a “Cando”. In 2008 it traded at US$ 1.10, which meant that at the time, Canadians could buy 10% more metal than Americans. In 2012 it had a high of US$ 1.01. In 2016 it bottomed at US$ 0.58 (ouch!), and today still trades at about 80 cents on the dollar. As the chart shows, Canadians get about 20% less gold and silver for their money than their southern neighbors (us).

Canadian Dollar vs US Dollar 01/12/2018 (Chart)

Courtesy stockcharts.com

Zim and Ven, racing for the bottom.

Then there’s the perennial currency basket case Zimbabwe – now entering its second hyperinflationary blowout in just the last couple of decades. Zim is currently playing touch and go with Venezuela to see if the latter’s “bolivar fuerte” (strong bolivar), transacted by the pound on a produce scale rather than from a wallet, will incinerate itself first.

Zimbabwe Banknotes

Zim’s previous “Paper Promise”- Angling for a rematch?

Bolivar Fuerte

Back in the day when the term “strong bolivar” meant something…

Fall in the Value of the Venezeulan Bolívar (Chart)

But not now… (Courtesy Sources listed)

Emerging Markets Purchasing Power Disadvantage

Buyers in Emerging Markets, in which gold prices are making new highs relative to their own fiat paper, are also paying more for their stash. Nevertheless demand there is rising as well – which as previously noted – is an important “tell” regarding the health and durability of the ongoing bull market. This is because even when facing a less advantageous exchange rate, emerging market gold customers are still solidly on the buy.

Additional evidence indicates that we are just now entering the second year of what could become a lengthier – and considerably more powerful than-expected upside run.

Gold vs Emerging Market Currencies

Courtesy allstarcharts.com

We say this in part because of some serious work done by Bob Hoye’s Institutional Advisors along with the Technical observations of Ross Clark They note that for the last 50 years, important lows for gold have taken place on a regular basis, stating, “The most recent (low) was in December 2016, one year after a premature low at 7.2 years in December 2015.”

In a January 2018 public domain post, they stated,

After an initial surge off the cycle lows, the price tends to move methodically higher for the first two years. During that period, we have found that a lower 20-week moving average envelope provides support. This was most recently tested in December 2017… Except for 2002, a trailing one-week stop after the 55th week, kept participants in the market until the first week after the top.

You might want to commit that last part to memory. If the 8-year cycle pattern continues to play itself out, not only could this nascent gold bull have a long ways to run in terms of time and price, but an attentive investor could use the kind of trailing stop-loss discussed, in order to stay with the trend as long as possible, holding onto significant gains before offsetting all or most of their holdings for a good profit.

Now for the Bad News…

The U.S. dollar has been “king of the hill” since its establishment as a backstop for the so-called petrodollar, in an agreement with Saudi Arabia and other oil producing countries as a result of the 1970’s oil spike. That idea was to create a stable and reliable revenue stream for oil exporters. The price of oil was thus set in dollars, in the process establishing the unit of account as the world’s reserve currency. Even so, the petrodollar’s purchasing power is, to some extent, predicated upon the rate of inflation and the value of the dollar on the FOREX.

Things worked well for quite awhile, but in recent years, for a number of reasons, the status quo has been increasingly called into question. A detailed rationale is beyond the scope of this report, but here are a few of the elements:

  • Profligate creation of dollars by the Federal Reserve, many of which have “migrated” offshore, driving down the recipients’ purchasing power.
  • Massive debt growth at all levels of the U.S. body politic – leading inevitably to more dollar creation in an attempt to pay the bill.
  • Unnaturally low interest rates since the 2008 melt-down, obscuring the “signals” given by rates that indicate if a given investment makes “dollars and sense”, leading to soaring mal-investment and speculation.
  • A changing geopolitical landscape, wherein the BRIC countries – Brazil, Russia, India and China (plus others) – have tired of the constraints placed upon them by restrictive U.S. policies.
  • The launch and coming build-out of The New Silk Road from Asia to Europe and the Middle East, encompassing 40 per cent of the world’s population in an economic-financial-political paradigm less-incumbent on the West’s wishes.
  • Lessening dependence on the US dollar as the world’s reserve currency in favor of loans and payments denominated in Chinese yuan, Russian rubles, commodities…and gold.

All these factors and more mean that right now and continuing during the coming years, the U.S. dollar is going to be buying less of just about everything, and that includes precious metals. The key elements of this sea-change as they relate to you?

  • Lower U.S. dollar-denominated gold and silver purchasing power.
  • Increased global demand for these metals, especially in the many countries seeing their local currencies strengthen vis a vis the dollar.
  • Depleting gold reserves due to a lack of big discoveries.
  • Lower head-grades across the board.
  • Increased cost of production due to environmental and “country risk”.

And this…

Weekly Gold with 50 Day Golden Cross (Chart)

Note established 50 day MA (blue line) “Golden Cross”

While just about everything in life is based upon probabilities, the odds right now strongly favor that the next leg of the secular bull run in the metals is underway. Four years of a cyclical bear market 45-50% retracement (2011-15); an 8 month initial bull counter-trend rally (most of 2016); and finally 18 months of retracement and consolidation (mid-2016 to December, 2017) have already taken place.

Taken together, this alignment of factors makes a compelling argument for completing your metals’ acquisition plan in a timely manner. And if you have still have yet to get started… what’s your excuse?

Precious Metals News & Analysis – Gold News, Silver News




Chinese Physical Gold Demand Surges; Americans Pile Into Stock & Crypto Bubbles

Chinese demand for physical gold investment surged in the first three-quarters of 2017 while Americans ditched the shiny yellow metal for increased bets in the crypto mania and stock market bubble market. Even though China’s Hang Seng Stock Market outperformed the Dow Jones Index last year, Chinese citizens purchased the most gold bar and coin products Q1-Q3 2017 since the same period in 2013, when they took advantage of huge gold market price selloff.

According to the World Gold Council, Chinese gold bar and coin demand increased to 233 metric tons (mt) in the first three-quarters of 2017 compared to 162 mt in the same period last year. Furthermore, if we include Indian gold bar and coin demand, China and India consumed nearly half of the world’s total:

Global Gold Bar & Coin Demand Q1 - Q3 2017

As we can see, China and India consumed 338 mt of gold bar and coin products which accounted for 47% of the total 715 mt Q1-Q3 2017. German gold bar and coin demand of 81 mt took the third highest spot followed by Thailand (49 mt), Turkey (47 mt), Switzerland (31 mt) and the United States (30 mt). Chinese gold bar and coin demand of 233 mt nearly equaled the total demand by German, Thailand, Turkey, Switzerland and the United States of 238 mt.

If we compare gold bar and coin demand by these countries in the same period last year, we can see some interesting changes:

Global Gold Bar & Coin Demand Q1 - Q3 2016

While the increase in Chinese gold bar and coin demand was the big winner (162 mt to 233 mt), Turkish demand nearly doubled from 24 mt in 2016 to 47 mt this year. However, the biggest loser in the group was in the United States. U.S. Gold bar and coin demand fell substantially to 30 mt Q1-Q3 2017 from 66 mt during the same period last year.

As I mentioned at the beginning of the article, Americans shunned gold to make it RICH in the rapidly rising Stock and Crypto Markets. We can see this quite clearly as investors choose to bet on the Dow Jones Index as it surged by 30% last year versus a mere 13.5% for gold:

Dow Jones Industrial Average INDX: Jan 12th, 2018

So, as the Dow Jones Index increased nearly 6,000 points, or 30% since the beginning of 2017, U.S. demand for gold bar and coins fell 55% (Q1-Q3 2017). Also, it makes perfect sense that American investors ditched gold for much larger 1,000+% gains in cryptocurrencies.

The stunning performance in the stock and crypto markets has frustrated precious metals investors to no end. Not only do I see this all over the internet, but I also receive a lot of emails and comments on my blog. And, it doesn’t help that some precious metals investors, now turned crypto specialists and aficionados, are only happy discussing assets that make 10-20 baggers. Forget about old fashion work and taking the time and money to build something real, we have now moved into a new investment strategy that to be successful, one must make 6-7 figure returns by clicking on a mouse.

All I can say is this… enjoy the Crypto fun while it lasts, because the forces of Gravity will once again bring us back down to earth where making a real living takes a lot of sweat and labor. While some followers sense that I am negative about the cryptocurrencies, I am. However, it is for a good reason. Even though the Blockchain technology offers interesting solutions, the speculative mania is a different story entirely. And, yes.. let’s not forget the tremendous amount of fraud and corruption in the crypto markets. If you don’t believe me, just wait around a while… LOL.

Regardless, while the Dow Jones Index jumped by 30% last year, the Chinese Hang Seng market did one better by surging 43%:

Hong Kong Hang Seng INDX: Jan 12th, 2018

Even with their Hang Seng Index up higher than the Dow Jones, Chinese gold bar and coin demand increased by 44% while U.S. physical gold investment demand fell by 55%. Now, some may believe that the increase in Chinese gold and bar and coin purchases were partly due to the Chinese government banning the trading on cryptocurrency exchanges in the country. However, the crypto exchange ban did not take place until the last quarter of 2017. So, the 44% increase in Chinese gold bar and coin demand occurred before the banning of their cryptocurrency exchanges. Because of the crypto exchange ban, we may see a spike in Chinese gold bar and coin demand during Q4 2017 when the statistics are released.

For whatever reason, Chinese physical gold investment demand increased significantly Q1-Q3 2017 while U.S. demand dropped like a rock. It will be interesting to see how 2018 unfolds and if the extreme leverage in the stock and crypto markets finally unravels. You see, it’s not a matter of if, it’s only a matter of time. And, while many believe the Dow Jones will continue higher forever, all markets have to correct. However, the next correction may turn out to be one heck of a crash.

Precious Metals News & Analysis – Gold News, Silver News




41 Million Americans Are Living In Poverty This Christmas

Even though the stock market continues to set new record high after new record high, poverty is exploding all over America.  It is being reported that 41 million people are living in poverty at this moment, and 9 million of them do not receive a single penny of income from anyone.  Once you have been unemployed for long enough, you don’t qualify for unemployment payments any longer, and once you are on the street there is nowhere for other governments programs to send a check to.  I have previously discussed the rising epidemic of homelessness in our nation, but most people don’t want to think about that sort of a thing these days.  Even though New York City has the most homeless since the Great Depression, and even though homelessness in Los Angeles is at an all-time record high, most people want to pretend that everything is just fine.

Well, the truth is that everything is not just fine.

A reporter from the Guardian recently traveled with a special UN envoy to some of the most impoverished areas of the United States.  His report is extremely eye-opening, and I wanted to share a short excerpt from his story.  This portion of his article is about a 41-year-old woman named Ressy Finley who is desperately trying to stay alive on the mean streets of Skid Row in Los Angeles…

Ressy Finley, 41, was busy sterilizing the white bucket she uses to slop out in her tent in which she has lived on and off for more than a decade. She keeps her living area, a mass of worn mattresses and blankets and a few motley possessions, as clean as she can in a losing battle against rats and cockroaches. She also endures waves of bed bugs, and has large welts on her shoulder to prove it.

She receives no formal income, and what she makes on recycling bottles and cans is no way enough to afford the average rents of $ 1,400 a month for a tiny one-bedroom. A friend brings her food every couple of days, the rest of the time she relies on nearby missions.

She cried twice in the course of our short conversation, once when she recalled how her infant son was taken from her arms by social workers because of her drug habit (he is now 14; she has never seen him again). The second time was when she alluded to the sexual abuse that set her as a child on the path towards drugs and homelessness.

Los Angeles has declared a state of emergency because the number of homeless is rising so rapidly, and so have nine other cities along the west coast.  For much more on this, please see my previous article entitled “As America Gives Thanks, Homelessness Continues To Set New Records In Major Cities All Over The Nation”.

The sad thing is that there are more than a million homes sitting empty in America right now.  As economic opportunities have dried up, many communities in the middle part of the nation are becoming “ghost towns”, and it is getting worse with each passing day

There are nearly 1.4 million vacant residential properties across the country — abandoned, not for sale, mostly unoccupied homes. With vacant properties comprising as much as 30% of residential properties, some neighborhoods are starting to feel like ghost towns.

Many believe that the answer to the decline of the middle class and the growth of poverty is even more socialism.

But if you want to see where that road leads, just look at what is happening in Venezuela.  People are eating cats and dogs, and just today there were a whole bunch of mainstream news articles about how children are literally starving to death.

No, the real answer is to do what made our economy so great in the first place.  Between 1872 and 1913, we didn’t have an income tax or a central bank, and it was the greatest period of economic growth in U.S. history.

What we have today is not free market capitalism.  We have gone very far down the road toward government-controlled socialism, and it has created a giant mess.

If we want to have a healthy middle class again, we need to have a society that promotes entrepreneurs and the creation of small businesses.  Today we are literally choking the financial life out of entrepreneurs and small businesses, and when I am elected to Congress I am going to fight as hard as I can to change that.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




Remember This Friday The 13th – Americans Are More Optimistic About The Stock Market Than They Have Ever Been Before

Happy days are here again for the U.S. economy – at least temporarily.  On Friday, U.S. stocks hit another brand new record high.  It seems like we are saying that almost every day lately, and most investors are absolutely thrilled by this seemingly endless surge.  Global stocks are surging too – today world stocks hit a new record high for the 4th consecutive day in a row.  But of course it isn’t just stock prices that are rising.  As the week ended, pretty much everything was up, and we also got some good news about consumer sentiment.  According to the new University of Michigan survey that was just released, U.S. consumers are the most optimistic about the economy that they have been since 2004

The consumer sentiment index, a survey of consumers by The University of Michigan, rose to 101.1 in October, far ahead of the 95 economists polled by Reuters anticipated.

“Consumer sentiment surged in early October, reaching its highest level since the start of 2004,” Richard Curtin, chief economist for the Surveys of Consumers, said in a statement.

And according to that same survey, we have never been more confident that the stock market will continue to go up than we are right now

Americans have never been more confident that that stock market will rally further in the next 12 months…

Of course it kind of makes sense why U.S. consumers would be feeling so good about the markets.  After all, stocks have only seemed to go up and up and up since the end of the last financial crisis.

But as I have written about so frequently in recent months, our financial markets are even more primed for a crash than they were in 2008, and we have received warning after warning that stock valuations are ridiculously inflated and must come crashing down at some point.

Plus, the “real economy” continues to send us some very troubling signals.  The U.S. economy lost jobs last month for the first time in seven years, and we just learned that General Motors is laying off more workers

Starting in mid-November and going through the rest of the year, General Motors will close its Detroit-Hamtramck assembly plant – its only remaining factory in its hometown – and lay off about 1,500 workers, “people familiar with the plan” told the Wall Street Journal. When the plant does resume production, output will be cut by 20%, and 200 people will be out of a job.

Back in 1999, the plant produced over 200,000 Cadillacs and Buicks a year. This year, it might barely produce 80,000 vehicles.

The truth is that we are in the terminal phase of the greatest debt bubble in human history, and all over the planet prominent names in the financial world are warning about what is just around the corner.  For example, German finance minister Wolfgang Schäuble is deeply concerned about what he is seeing

Outgoing German finance minister Wolfgang Schäuble has warned that spiraling levels of global debt and liquidity present a major risk to the world economy.

In an interview with the Financial Times, Schäuble said there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets.

He also warned of risks to stability in the eurozone, particularly those posed by bank balance sheets burdened by the post-crisis legacy of non-performing loans.

And James Rickards is completely convinced “that a financial crisis is certainly coming”…

The bottom line is that a financial crisis is certainly coming. In my latest book, The Road to Ruin, I use 2018 as a target date primarily because the two prior systemic crises, 1998 and 2008, were 10 years apart. I extended the timeline 10 years into the future from the 2008 crisis to maintain the 10-year tempo, and this is how I arrived at 2018.

Yet I make the point in the book that the exact date is unimportant. What is most important is that the crisis is coming and the time to prepare is now. It could happen in 2018, 2019, or it could happen tomorrow. The conditions for collapse are all in place.

It’s simply a matter of the right catalyst and array of factors in the critical state. Likely triggers could include a major bank failure, a failure to deliver physical gold, a war, a natural disaster, a cyber–financial attack, and many other events.

If you look at how stock prices have behaved so far this year, it looks suspiciously just like the bubble that formed in 1987 just before the market crashed.

The conditions for an absolutely historic stock market crash already exist, and they have existed for quite some time.  None of our long-term problems have been solved, and with each passing day this colossal financial bubble just keeps getting bigger and bigger and bigger.

I definitely concur with James Rickards.  A major financial crisis “is certainly coming”, and because of all the irrational optimism that we are witnessing at the moment most Americans will be completely and utterly blindsided by what is ahead.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




The Equifax Hack Is The Most Disastrous Data Breach In History Because Now Hackers Have The Credit Information Of 143 Million Americans

Talk about a nightmare.  It is being reported that criminals were able to hack into Equifax and make off with the credit information of 143 million Americans.  We are talking about names, Social Security numbers, dates of birth, home addresses and even driver’s license numbers.  If this data breach was an earthquake, we would be talking about a magnitude-10.0 on the identity theft scale.  We have never seen anything like this before, and to say that this will be “disastrous” for the credit industry would be a massive understatement.

What really disturbed me about this story is that this hack reportedly occurred between “mid-May and July of this year”

Credit monitoring company Equifax has been hit by a high-tech heist that exposed the Social Security numbers and other sensitive information about 143 million Americans. Now the unwitting victims have to worry about the threat of having their identities stolen.

The Atlanta-based company, one of three major U.S. credit bureaus, said Thursday that “criminals” exploited a U.S. website application to access files between mid-May and July of this year.

So why didn’t we learn about this until September?

Somebody out there really needs to answer that question for us.

And even though the “143 million” number is being thrown around constantly, according to USA Today we may never know the true number of victims…

When asked if there’s a way to quantify how many people have been harmed, John Ulzheimer, a credit expert and former employee at Equifax and credit score firm FICO, said: “There’s no way to know, and there may never be a way to know.”

Personally, I don’t see how Equifax can possibly survive after this.  Their stock price is already crashing, and now it has come out that they had put a “music major” in charge of data security…

When Congress hauls in Equifax CEO Richard Smith to grill him, it can start by asking why he put someone with degrees in music in charge of the company’s data security.

And then they might also ask him if anyone at the company has been involved in efforts to cover up Susan Mauldin’s lack of educational qualifications since the data breach became public.

It would be fascinating to hear Smith try to explain both of those extraordinary items.

Also, we are now finding out that Equifax has not just had security problems here in the United States.

According to the New York Post, data breaches have been taking place all over the globe…

Hackers had access to the names, dates of birth and e-mail addresses of nearly 400,000 people in the United Kingdom, said Equifax’s British subsidiary in a statement last week.

In Canada, sensitive data belonging to 10,000 consumers may have been hacked in the breach, said a statement from the Canadian Automobile Association.

In Argentina, one of the company’s portals was so easily accessible that it allowed quick exposure to the personal information of more than 14,000 people.

As noted above, the public didn’t learn about any of this until September.

But once top Equifax officials learned what had happened, some of them started dumping their shares of Equifax very rapidly

Three Equifax executives — not the ones who are departing — sold shares worth a combined $ 1.8 million just a few days after the company discovered the breach, according to documents filed with securities regulators.

Equifax shares have lost a third of their value since it announced the breach.

Needless to say, the SEC is going to be looking into this very closely.

As we move forward, there is a tremendous amount of concern as to how much this data breach will affect the U.S. economy.

Only time will tell, but without a doubt it will have an impact.  For example, according to Bloomberg this data breach could potentially have an absolutely disastrous impact on store-branded credit cards…

Equifax Inc.’s massive data breach could make an already tough market outlook even more daunting for the firms behind Gap Inc.’s and Ann Taylor’s store-branded credit cards.

Those retailers’ banking partners, including Synchrony Financial and Alliance Data Systems Corp., could see fewer account originations as more consumers freeze their credit to avoid hack-related fraud. Consumers have to take extra steps — including calling the credit bureau, going online or paying fees — to lift a block and get a new card.

“If people are defaulting to credit freezes, then if you’re a Macy’s retailer trying to sell credit cards, you can’t get that done at the point of sale,” said Vincent Caintic, an analyst at Stephens Inc. “It could become a regular thing, these freezes. It does slow down the origination process and it’s probably going to increase acquisition costs.”

If you believe that your data may have been compromised in this breach, there are some things that you can do right away to help protect against identity theft.  You can sign up for 24 hour a day credit monitoring, you can request fraud alerts, you can enable “two factor authentication” and beyond all of that you could go as far as to freeze your credit.

But if everybody in America suddenly started freezing their credit, that would slow down economic activity dramatically.  So needless to say authorities are hoping that does not happen.

In this case, Equifax needs to step up and do the right thing.  They need to inform all of the victims (even if that means reaching out to 143 million different people), and they should automatically provide free credit monitoring for all of those that were affected.

I seriously doubt that Equifax will take these measures, and I also seriously doubt that Equifax will be able to survive much longer.

When you bungle something as badly as Equifax has done, it is nearly impossible to restore faith in an organization.  The credit information of 143 million Americans is now in the hands of criminals, and the potential damage that could be done is absolutely off the charts.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




The Middle Class Is Being Destroyed: Now Only 25 Percent Of All Americans Have $10,000 Or More In Savings

We just got more evidence that the middle class is being systematically eviscerated.  According to a GOBankingRates survey that was just released, more than half the country has less than $ 1,000 in savings.  So in the event of a major economic disaster of some kind, over 50 percent of the nation is going to be completely out of cash almost immediately.  For years I have been writing about the steady decline of the middle class in the United States, but I still get astounded by numbers such as these.  According to this new survey, only 25 percent of all Americans have $ 10,000 or more in savings at this point…

$ 0 saved: 39 percent
Less than $ 1,000 saved: 18 percent
$ 1,000 to $ 4,999 saved: 12 percent
$ 5,000 to $ 9,999 saved: 6 percent
$ 10,000 or more saved: 25 percent

Other surveys have come up with similar results.  One discovered that about two-thirds of the country is living paycheck to paycheck, and another which was conducted by the Federal Reserve found that 44 percent of all U.S. adults do not even have enough money “to cover an unexpected $ 400 expense”.

Most of us have grown accustomed to barely scraping by from month to month.  But that is not what being “middle class” is supposed to be about.  If you are in the “middle class” you should be making more than you are spending and building long-term wealth.

But just like our federal government, most of us are spending money like there is no tomorrow.  If we don’t have quite enough money for what we want to do, we just borrow more.  Right now, U.S. consumers are more than 12 trillion dollars in debt, and it is impossible to build any real wealth when you are constantly drowning in red ink.

We are willingly enslaving ourselves, but most people were never even taught about the dangers of going into too much debt.

Another major factor in the decline of the middle class is the fact that we have been shipping millions of good paying jobs overseas.  We have lost more than 70,000 manufacturing facilities since China joined the WTO, and we have been replacing good paying manufacturing jobs with low paying service jobs.

Without enough good paying jobs, our middle class has been steadily shrinking.  In 2015, the middle class became a minority of the population in the United States for the first time ever recorded.

If you go back to the early 1970s, the middle class was well over 60 percent of the population, but now that number is hovering in the high 40s.

And things continue to get even worse.  For example, NBC News recently reported that the number of Americans that can’t afford to be living in their own homes has more than doubled since 2001…

Over 38 million American households can’t afford their housing, an increase of 146 percent in the past 16 years, according to a recent Harvard housing report.

Under federal guidelines, households that spend more than 30 percent of their income on housing costs are considered “cost burdened” and will have difficulty affording basic necessities like food, clothing, transportation and medical care.

But the number of Americans struggling with their housing costs has risen from almost 16 million in 2001 to 38 million in 2015, according to the Census data crunched in the report. That’s more than double.

If we want to turn things around for the middle class, we need more entrepreneurs and more small businesses.

Small businesses have traditionally been the primary engine for job growth in this country.  But instead of encouraging small businesses to start and grow, the federal government has been absolutely killing small businesses with red tape and high taxes.

If I win my election, I am going to do all that I can to fight for entrepreneurs and small businesses.  Today, the percentage of Americans that work for themselves is close to a record low, and we desperately need to get that turned around.

So I I go to Congress, one of the first things I plan to do is to push for the elimination of the “self-employment tax”.

If you are an entrepreneur, then you already know how painful that particular tax can be.

We have got to get this economy growing again.  Barack Obama was the only president in our entire history never to have a single year when the U.S. economy grew by at least 3 percent, and overall we have not had a year when our economy grew by at least 3 percent in over a decade.

And as I noted earlier this week, “our economy has still only grown at an average rate of just 1.33 percent a year over the last 10 years.”

Is that acceptable to you?

I hope not, because it sure is not acceptable to me.

What we have been doing is simply not working.  In fact, if we were not propping up the economy with the greatest debt binge in human history, we would be a in a rip-roaring economic depression right now.

If we want America to once again become the greatest economic machine on the planet, we need to do the things that made us great in the first place.  We need an extremely limited federal government that stays out of the way of business, and we need to once again embrace the principles of free market capitalism.

Free markets work tremendously well if you allow them to do so.

But if we continue to march down the road toward big government socialism, we will get what we deserve, and it won’t be pretty.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




Dying Middle Class: The Number Of Americans That Can’t Afford Their Own Homes Has More Than Doubled

Have you lost your spot in the middle class yet?  For years I have been documenting all of the numbers that show that the middle class in America has been steadily shrinking, and we just got another one.  According to a report that was produced by researchers at Harvard University, the number of Americans that spend more than 30 percent of their incomes on housing has more than doubled.  In 2001, nearly 16 million Americans couldn’t afford the homes that they were currently living in, but by 2015 that figure had jumped to 38 million.

When I write about “economic collapse”, I am writing about a process that has been unfolding for decades in this country.  Back in the early 1970s, well over 60 percent of all Americans were considered to be “middle class”, but now that number has fallen below 50 percent.  Never before in our history has the middle class been a minority of the population, but that is where we are at now, and the middle class continues to get even smaller with each passing day.

So these new numbers saddened me, but they didn’t exactly surprise me.  The following comes from NBC News

Over 38 million American households can’t afford their housing, an increase of 146 percent in the past 16 years, according to a recent Harvard housing report.

Under federal guidelines, households that spend more than 30 percent of their income on housing costs are considered “cost burdened” and will have difficulty affording basic necessities like food, clothing, transportation and medical care.

But the number of Americans struggling with their housing costs has risen from almost 16 million in 2001 to 38 million in 2015, according to the Census data crunched in the report. That’s more than double.

Sometimes people try to convince me that the economy is doing “well”, but when I ask them how they are doing personally the news is almost always dreary.  I know so many people that are working for close to minimum wage that used to be solidly in the middle class.

One of the biggest reasons why the middle class is shrinking is because paychecks are staying about the same while the cost of living continues to rise steadily.  Of course one of the biggest factors in the rise of the cost of living is health insurance.

There are many people out there that have seen their health insurance premiums double since Obamacare went into effect.  And one health insurance company actually tried to do this to me and my family too, and so at that time I immediately switched carriers.

But even though virtually every single Republican in Congress campaigned on repealing Obamacare, it doesn’t look like it is going to happen.  In fact, on Sunday Senator John McCain told Face the Nation that the effort to repeal Obamacare is “probably going to be dead”

Sen. John McCain, R-Ariz., said Sunday the Republican bill to repeal and replace Obamacare is “probably going to be dead.”

“My view is that it’s probably going to be dead,” he said on CBS’s Face the Nation.

Support for the bill has been eroding over the July 4th recess, and McCain said he believes Republicans should work with Democrats to craft health care legislation.

As a voter, this greatly frustrates me.  The Republicans got a bill to repeal Obamacare through the House and through the Senate and on to Barack Obama’s desk in early 2016.  So why can’t they get that exact same bill to Donald Trump’s desk now?

We worked really hard to give the Republicans control of the White House, the Senate and the House, and now they are stabbing us in the back once again.

This is just one example of why I intend to be a “wrecking ball” if I get the chance to go to Washington.

We have got to lower health care costs on the middle class.  There is no other option.  Millions of families all over the country are being absolutely suffocated by rising health insurance premiums.  Sometimes I get so frustrated with these RINOs (Republicans In Name Only) that I want to scream.

So many families are living on the edge right now.  Various surveys have discovered that somewhere around two-thirds of the entire nation is living paycheck to paycheck at least part of the time, and one study found that 69 percent of all Americans do not have an adequate emergency fund.

But when you are living on the edge, there is always a danger that you could go over.

Every month, more Americans fall out of the middle class and into poverty.  Even during this so-called “economic recovery”, we are seeing alarming spikes in poverty all over the nation.  For example, the number of homeless people living on the street in New York City has increased by 39 percent over the past year…

Street homelessness in New York increased by 39 percent in 2017, according to the latest annual survey by the Department of Homeless Services.

There were 3,892 homeless and unsheltered people on the night of February 6, 2017, up from 2,794 people at the same time last year, said the report, which is conducted on one night of the year. This is the highest increase since 2005, when Michael Bloomberg was mayor.

And bankruptcies continue to rise as well.  Consumer bankruptcies were up once again last month, and commercial bankruptcies continue their very disturbing climb

Commercial Chapter 11 bankruptcies – an effort to restructure the business, rather than liquidating it – jumped 16% year-over-year in June to 581 filings across the US. Total commercial bankruptcies of all types, by large corporations to tiny sole proprietorships, rose 2% year-over-year to 3,385 filings, according to the American Bankruptcy Institute. This was up 39% from June 2015 and up 18% from June 2014.

Since the end of the last recession, the middle class has continued to get smaller and smaller in this country, and now it appears that another economic downturn is upon us.

Are we just going to stand aside and do nothing as the middle class in America dies?

The Democrats don’t seem to care.

The Republicans don’t seem to care.

If we continue to do the same things that we have been doing, we are going to continue to get the same results.

In other words, unless we start doing things differently the middle class in America is going to continue to be systematically eviscerated.

Wake up America.  The middle class is dying and if we want to save it we have to take action now.

The Economic Collapse




69 Percent Of Americans Do Not Have An Adequate Emergency Fund

Do you have an emergency fund?  If you even have one penny in emergency savings, you are already ahead of about one-fourth of the country.  I write about this stuff all the time, but it always astounds me how many Americans are literally living on the edge financially.  Back in 2008 when the economy tanked and millions of people lost their jobs, large numbers of Americans suddenly couldn’t pay their bills because they were living paycheck to paycheck.  Now the stage is set for it to happen again.  Another major recession is going to happen at some point, and when it does millions of people are going to get blindsided by it.

Despite all of our emphasis on education, we never seem to teach our young people how to handle money.  But this is one of the most basic skills that everyone needs.  Personally, I went through high school, college and law school without ever being taught about the dangers of going into debt or the importance of saving money.

If you are ever going to build any wealth, you have got to spend less than you earn.  That is just basic common sense.  Unfortunately, nearly one out of every four Americans does not have even a single penny in emergency savings…

Bankrate’s newly released June Financial Security Index survey indicates that 24 percent of Americans have not saved any money at all for their emergency funds.

This is despite experts recommending that people strive for a savings cushion equivalent to the amount needed to cover three to six months’ worth of expenses.

For years, I have been telling my readers that at a minimum they need to have an emergency fund that can cover at least six months of expenses.  It is great to have more than that, but everyone should strive to have at least a six month cushion.

Unfortunately, that same Bankrate survey found that only 31 percent of Americans actually have such a cushion

The June survey also found that 31 percent of Americans have what Bankrate considers an ‘adequate’ savings cushion — six or more months’ worth of money to pay expenses — which means that nearly two-thirds of the country isn’t saving enough money.

That means that a whopping 69 percent of all Americans do not have an adequate emergency fund.

So what is going to happen if another great crisis arrives and millions of people suddenly lose their jobs?

Just like last time, mortgage defaults will start soaring and countless numbers of families will lose their homes.

If you do not have anything to fall back on, you can lose your spot in the middle class really fast.  And in the case of a truly catastrophic national crisis, trying to operate without any money at all is going to be exceedingly challenging.

Just recently, the Federal Reserve conducted a survey that discovered that 44 percent of all Americans do not even have enough money “to cover an unexpected $ 400 expense”.

That is almost half the country.

And a different survey by CareerBuilder found that 75 percent of all Americans have lived paycheck to paycheck “at least some of the time”.

Unfortunately, in a desperate attempt to make ends meet many of us continue to pile up more and more debt.  According to Moneyish, Americans have now accumulated more than a trillion dollars of credit card debt, more than a trillion dollars of student loan debt, and more than a trillion dollars of auto loan debt.

We’ve racked up $ 1 trillion in credit card debt — and that’s just a fraction of what we owe. That’s according to data released this year from the Federal Reserve, which found that U.S. consumers owe $ 1.0004 trillion on their cards, up 6.2% from a year ago; this is the highest amount owed since January 2009. What’s more, this isn’t the only consumer debt to top $ 1 trillion. We now also owe more than $ 1 trillion for our cars, and for our student loans, the data showed.

Overall, U.S. consumers are now more than 12 trillion dollars in debt.

We often criticize the federal government for being nearly 20 trillion dollars in debt.  And that criticism is definitely valid.  What we are doing to future generations of Americans is beyond criminal.

But are we not doing something similar to ourselves?

When you divide the total amount of consumer debt by the size of the U.S. population, it breaks down to roughly $ 40,000 for every man, woman and child in our country.

When someone lends you money, you have to pay back more than you originally borrow.  And in the case of high interest debt, you can end up paying back several times what you originally borrowed.

If you carry a balance from month to month on a high interest credit card, it is absolutely crippling you financially.  But many Americans don’t understand this.  Instead, they just keep sending off the “minimum payment” every month because that is the easiest thing to do.

If you ever want to achieve financial freedom, you have got to get rid of your toxic debts.  There are some forms of low interest debt, such as mortgage debt, that are not going to financially cripple you.  But anything with a high rate of interest you will want to pay off as soon as possible.

And everyone needs a financial cushion.  Unless you can guarantee that your life is always going to go super smoothly and you are never going to have any problems, you need an emergency fund to fall back on.

Yes, you may need to make some sacrifices in order to make that happen.  Nobody ever said that it would be easy.  But just about everyone has somewhere that a little “belt tightening” can be done, and in the long-term it will be worth it.

When you don’t have to constantly worry about how you are going to pay the bills next month, it will help you sleep a lot easier at night.  Many of us have put a lot of unnecessary stress on ourselves by spending money that we didn’t have for things that we really didn’t need.

And now is the time to get your financial house in order, because it appears that another major economic downturn is not too far away.

The Economic Collapse




The Real Unemployment Number: 102 Million Working Age Americans Do Not Have A Job

Did you know that the number of working age Americans that do not have a job right now is far higher than it was during the worst moments of the last recession?  For example, in January 2009 92.6 million working age Americans did not have a job, but we just found out that in May the number of working age Americans without a job increased to just a shade under 102 million.  We’ll go over those numbers in more detail in a moment, but first I want to talk a bit about the difference between perception and reality.  According to the bureaucrats in the federal government, the “unemployment rate” in May was the lowest that we have seen in 16 years.  At just “4.3 percent”, we are essentially at “full employment”, and so according to them anyone that really wants a job should be able to find one pretty easily.

Of course that is a load of nonsense.  John Williams of shadowstats.com tracks what our economic numbers would look like if honest numbers were being used, and according to his calculations the unemployment rate is currently 22 percent.

So what accounts for the wide disparity between those numbers?

Well, the truth is that the official “unemployment rate” that the mainstream media endlessly hypes is so manipulated that it has essentially lost all meaning at this point.

In May, we were told that the U.S. economy added 138,000 jobs, but that is not even enough to keep up with population growth.

However, when you look deeper into the numbers some major red flags quickly emerge.  You won’t hear it on the news, but in May the U.S. economy actually lost 367,000 full-time jobs.  That is an absolutely nightmarish figure, and it confirms the fact that economic activity is starting to dramatically slow down.

But somehow the “unemployment rate” in May fell from “4.4 percent” to “4.3 percent”.

How in the world can they do that?

Well, for years the government has been taking large numbers of people from the basket known as “officially unemployed” and dumping them into another basket known as “not in the labor force”.  Since those that are “not in the labor force” do not count toward the official unemployment rate, they can make things look better than they actually are by moving people into that category.

In May, the government added a staggering 608,000 Americans into the “not in the labor force” category.  So now the number of working age Americans “not in the labor force” has reached a total of 94.98 million.  When you add that total to the number of Americans that are “officially” unemployed (6.86 million), you get a grand total of 101.84 million.

In other words, when you round up to the nearest million you get a grand total of 102 million Americans that do not have a job right now.

If you go back to January 2009, there were 81.02 million Americans that were “not in the labor force” and 11.61 million Americans that were considered to be “officially unemployed”.  And so that means that according to the federal government there were 92.63 million working age Americans that did not have a job at that point.

So if the number of working age Americans without a job has risen by 9.21 million since January 2009, are we really doing so much better than we were during the depths of the last recession?

Another way to look at this is by examining the civilian employment-population ratio.  Just before the last recession, about 63 percent of the working age population had a job, but then during the recession that number fell to between 58 and 59 percent for quite a while.  We have finally gotten back to the 60 percent mark, but we are still far, far below the level that we were at before the last recession struck.

And of course all of the above assumes that the numbers that the government is giving us accurately reflect reality, and that is highly questionable.

For example, according to one recent analysis the “business birth and death model” has accounted for 93 percent of all “new jobs” reported by the government since 2008…

As our friends at Morningside Hill calculate, a full 93% of the new jobs reported since 2008 – 6.3 million out of 6.7 million – and 40% of the jobs in 2016 alone were added through the business birth and death model – a highly controversial model which is not supported by the data. On the contrary, all data on establishment births and deaths point to an ongoing decrease in entrepreneurship.

In essence, government bureaucrats pull a number out of the air and add jobs to the report based on an estimate of how many new businesses they think are being created in America in a particular month.

Is it possible that there is a chance that they are being overly optimistic when they make this estimate?

Most people have no idea that the “official numbers” that we get from the government are highly speculative, and there is always a temptation to make things look better than they actually are.

There is no way in the world that we are anywhere near “full employment”.  I hear from people all over the country that say that it is exceedingly difficult to find good jobs where they live.  And according to a brand new report that was just released, the number of job cuts in May 2017 was 71 percent higher than it was in May 2016.

We also know that over the past ten years the average rate of economic growth in the United States exactly matches the average rate of economic growth that the U.S. experienced during the 1930s.

I don’t see how anyone can possibly claim that the U.S. economy is doing well.  Just prior to the last recession there were 26 million Americans on food stamps, and now we have 44 million.  We are on pace to absolutely shatter the all-time record for store closings in a single year, and the number of homeless people living in Los Angeles County has risen by 23 percent over the past 12 months.

But once again, it is a battle of perception vs. reality.  Their televisions are endlessly feeding them the message that everything is just fine, and most Americans seem to be buying it, at least for now…

The Economic Collapse




Free Money: Potential Presidential Candidate Mark Zuckerberg Suggests That All Americans Should Get A ‘Universal Basic Income’

Should everyone in America receive a “basic income” directly from the federal government?  Considering the fact that we are already 20 trillion dollars in debt, such a concept may sound quite foolish to many of you, but this is an idea that is really starting to gain traction in leftist circles.  In fact, Facebook CEO Mark Zuckerberg suggested that this was something that we should “explore” during the commencement speech that he just delivered at Harvard.  For quite a while it has been obvious that Zuckerberg is very strongly considering a run for the presidency in 2020, but up until just recently we haven’t had many clues about where he would stand on particular issues.  If he is serious about proposing a universal basic income for all Americans, that would make Zuckerberg very appealing to the far left voters that flocked to the Bernie Sanders campaign.

Yesterday, I discussed the fact that the number of Americans that are receiving money from the government each month has reached an all-time high, but Zuckerberg would take things much farther.  According to Zuckerberg, society would be far better off if everyone got an income from the government

“Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract,” Zuckerberg said during his speech. “We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.”

Zuckerberg said that, because he knew he had a safety net if projects like Facebook had failed, he was confident enough to continue on without fear of failing. Others, he said, such as children who need to support households instead of poking away on computers learning how to code, don’t have the foundation Zuckerberg had. Universal basic income would provide that sort of cushion, Zuckerberg argued.

Such a proposal is going to look really good to a lot of people at first glance.

But who is going to pay for this?

Of course the truth is that the money for the people that are not working would come from taxing the people that are working.

I don’t think that Zuckerberg has really thought this through.  Are young people going to have an incentive to work if they can just stay home and watch movies and play video games all day while collecting their “universal basic incomes” from the government?

And why would anyone want to bust their rear ends working for a living when their incomes are just going to be taxed extremely heavily to pay for all the people that aren’t working?

We are already 20 trillion dollars in debt, but politicians on the left just want to keep giving even more free stuff to people.  During his presidential campaign, Bernie Sanders suggested that everyone in America “deserves a minimum standard of living” and that every citizen is “entitled” to universal health care, free college education and basic housing…

So long as you have Republicans in control of the House and the Senate, and so long as you have a Congress dominated by big money, I can guarantee you that the discussion about universal basic income is going to go nowhere in a hurry. But, if we can develop a strong grassroots movement which says that every man, woman and child in this country is entitled to a minimum standard of living — is entitled to health care, is entitled to education, is entitled to housing — then we can succeed. We are living in the richest country in the history of the world, yet we have the highest rate of childhood poverty of almost any major country and millions of people are struggling to put food on the table. It is my absolute conviction that everyone in this country deserves a minimum standard of living and we’ve got to go forward in the fight to make that happen.

In previous generations, very few people would have ever taken someone like Bernie Sanders seriously.

But in our day and time socialism is really starting to catch on.  In fact, one survey found “that four out of every ten adults say they prefer socialism to capitalism”

The American Culture and Faith Institute recently conducted a survey of adults 18 and older. It shows not only how deeply divided Americans are on some issues but also how their view of the nation stands in many cases in stark contrast to our nation’s founding principles. Most Americans (58 percent) see themselves as politically moderate, while a quarter identify as conservative, and 17 percent as liberal. Those who were both socially and fiscally conservative, the group tracked by the ACFI in greatest detail, were 6 percent of the population.

But those differences don’t reveal the greatest divide and danger to America’s future. “The most alarming result, according to [George] Barna, was that four out of every ten adults say they prefer socialism to capitalism,” the ACFI noted in its commentary on the poll. “That is a large minority,” Barna said, “and it includes a majority of the liberals — who will be pushing for a completely different economic model to dominate our nation. That is the stuff of civil wars. It ought to set off alarm bells among more traditionally-oriented leaders across the nation.’” That 40 percent of Americans now prefer socialism to capitalism could spell major change to the policies advanced by legislators and political leaders and to the interpretations of judges ruling on the application of new and pre-existing laws.

And as I noted yesterday, Millennials are particularly attracted to socialism.  This could have dramatic implications for our society as older generations of Americans slowly die off.

Unfortunately, there is just one huge problem with socialism.

It doesn’t work.

If you want to see the end result of socialism, just move to Venezuela or North Korea for a while.

In socialist nations, there is very little incentive to work hard.  Instead, people tend to become very lazy and expect the government to provide everything that they need.

When people work hard and are productive, the overall wealth of a society goes up.  And when people sit around and wait for someone else to provide for them, the overall wealth of a society goes down.

Would Mark Zuckerberg have worked so hard to develop Facebook if he knew that the government would just come in and take most of the money away so that others could have a “universal basic income”?

Yes, we want to do all that we can to reduce poverty and to build a strong, vibrant middle class.

But socialism is not the answer and it never will be.

The Economic Collapse