MIKE RUPPERT - U.S. HAS ONLY WEEKS BEFORE ECONOMIC COLLAPSE

http://www.businessinsider.com/americas-most-bankrupt-cities-2010-12?slop=1
16 US Cities Facing Bankruptcy If They Don't Make Deep Cuts In 2011


San Diego, Calif
New York, New York
San Jose, Calif
Cincinnati, Ohio,
Honolulu, HI
Los Angels, Calif
San Francisco, Calif
Washington, DC
Newark, N.J.
Detroit, Mich
Reading, Penn
Joliet, Ill
Camden, N.J.
Hamtreamck, Mich
Central Falls, R.I.
Paterson, N.J.
Bonus: Chicago, Ill

Read more: http://www.businessinsider.com/americas-most-bankrupt-cities-2010-12?slop=1#ixzz19XiQRGko

Which 10 States – California, Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin. These 10 states account for over one third of the USA population and this is significant. Think of it is more then 33% of the USA going bankrupt.
http://www.panamalaw.org/10_states_ready_to_go_bankrupt_bad_implications_for_USA.html

Gerald Celente's Top Trends Of 2011
By Gerald Celente
12-28-10


Top Trends of 2011

KINGSTON, NY, 28 December 2010 - After the tumultuous years of the Great Recession, a battered people may wish that 2011 will bring a return to kinder, gentler times. But that is not what we are predicting:

1. Wake-Up Call The people of all nations, having become convinced of the inability of leaders and know-it-all "arbiters of everything" to fulfill their promises, will do more than just question authority, they will defy it. The seeds of revolution will be sown.

2. Crack-Up 2011 In 2011, with the bailout funds and arsenal of other schemes to prop up the economy depleted, teetering economies will collapse, currency wars will ensue, trade barriers will be erected, economic unions will splinter, and the onset of the "Greatest Depression" (a trend we forecasted before the massive bailouts existed) will be recognized by everyone.

3. Screw the People As times get even tougher and people get even poorer, the "authorities" will intensify their efforts to extract the funds needed to meet fiscal obligations. While there will be variations on the theme, the governments' song will be the same: cut what you give, raise what you take.

4. Crime Waves No job + no money + compounding debt = high stress, strained relations, short fuses. In 2011, with the fuse lit, it will be prime time for Crime Time. As Gerald Celente says, "When people lose everything and they have nothing left to lose, they lose it." And "lose it" they will.

5. Crackdown on Liberty As crime rates rise, so will the voices demanding a crackdown. A national crusade to "Get Tough on Crime" will be waged against the citizenry. And just as in the "War on Terror," where "suspected terrorists" are killed before proven guilty or jailed without trial, in the "War on Crime" everyone is a suspect until proven innocent.

6. Alternative Energy In laboratories and workshops unnoticed by mainstream analysts, scientific visionaries and entrepreneurs are forging a new physics incorporating principles once thought impossible, working to create devices that liberate more energy than they consume. What are they, and how long will it be before they can be brought to market?

7. Journalism 2.0 2011 will mark the year that new methods of news and information distribution will render the 20th century model obsolete. With its unparalleled reach across borders and language barriers, "Journalism 2.0" has the potential to influence and educate citizens in a way that governments and corporate media moguls would never permit.

8. Cyberwars In 2010, every major government acknowledged that Cyberwar was a clear and present danger and, in fact, had already begun. The demonstrable effects of Cyberwar and its companion, Cybercrime, are already significant ­ and will come of age in 2011. Equally disruptive will be the harsh measures taken by global governments to control free access to the web, identify its users, and literally shut down computers that it considers a threat to national security.

9. Youth of the World Unite University degrees in hand yet out of work, in debt and with no prospects on the horizon, feeling betrayed and angry, young adults and 20-somethings are mad as hell, and they're not going to take it anymore. Not mature enough to control their impulses, the confrontations they engage in will escalate disproportionately.

10. End of The World! The closer we get to 2012, the louder the calls will be that "The End is near!" Among Armageddonites the actual end of the world, and annihilation of the Earth in 2012, is a matter of certainty. Even the rational and informed may sometimes feel the world is in a perilous state. Both streams of thought are leading many to reevaluate their chances for personal survival, be it in heaven or on earth.

11. The Mystery Trend ... will be revealed upon publication of theTrends Journal in mid-January.

With (http://enews.trendsresearch.com/q/RJompqI9lbz7_qd5QPmu
kN0LR93DgZpXEF0SU5NXYLfYCsBGLEJaDgH42) an unexcelled track record to prove it, no one can provide a more accurate look into the future than Gerald Celente, Trends Journal Publisher.

Carol, is that your subtitle saying that this will NOT happen, but you cannot say until next week? I'll be waiting to hear! Thanks, Linda

Good to see MR up and going strong again. He has had his share of problems lately. It is great that he is able to get his message out.

Many investors are seeing the writing on the wall and are trading US dollars for commodities. There is going to be a day where nobody is going to want US paper and it is approaching fast.

Yes Linda, my subtitle. Since this is the last day of the year here is an early 2011 gift. The dinar is going to pull many in the worlds economy out of the hole. It has been revalued and those holding dinars will have money to spend and pay off debts. The dollar is still being devalued but the dinar will prop it up for a bit longer while others financially position themselves to deal with what is happening with the dollar. The best places to invest dollars now is 1) Pay off any debt 2) buy silver 3) buy Swiss Francs 4) buy commodidies and store food (good trade items are sugar, coffee, powdered milk, spices like salt/pepper/cinnamon/etc)

Even thought Ruppert thinks China is going to implode, personally, I think the Chinese Yuan is going to hold its own as this is an emerging major world power and their government has taken a stand on going after corruption with political leaders. Also, they just got rid of all the internet porn sites saying its not good for the children. This shows an underlying morality that is to be admired. They are also going to build up their military (which is likely prop up their economy) and have taken over where the US left off with respect to factories. They just need to move toward alternative energy sources (wind, solar, free energy) to keep them going. If they converted their car factories to electric or steam cars this would be beneficial for them and also work out an alternate means of allowing people on the road (where even number on car licenses travel one day, odd number on the next day). Only they too will experience a slump when the US dollar tanks as they are still heavily invested in it. Yet I read where they are dumping dollars and made international agreements to do basket trading (not use US currency) with Russia and other nations. If the US dollar no longer becomes the worlds standard curreny - what's left? Precious metal.

However, paper is paper and precious metals always stands the test of time. If living in the US buy gold coins that are not US minted because the government has confiscated US gold coins in the past and will likely do so in the again in the future. There are also rumors that the government will eventually go after retirement funds and what is left in the banks. Best to get silver coins (which can be used as trade) and bars as the price of silver will go up. Some are predicting that 1 ounce of gold will eventually go for 5 or 6k and silver will go up to 1/16 of the value of gold. Silver is good. It is also recommended to have items that the government does not know about and that don't have to be reported. Again, this is where foriegn coins come in.

It is also recommened to live in rural areas or have someplace to go to with at least 6 months worth of food storage. If we were still living on the mainland I would get rid of any car and purchase instead a second-hand camper van as they are self-contained with all of the amenities (bed, toilet, sink, fridge, stove-top). I've seen some of the older models in good condition go for as little as 6k on Craig's list. We also do container gardening on the deck and grow lettuce, spinach, broccoli, garlic, squash, herbs, etc. One can grow salad items indoors in containers with some good light.

Funny I had a dream last night, and basically, what I remember was this sentence....

Divorce yourself from the American Dollar!

Very strange because I have never even heard it put that way, yet makes so much sense. I have some cash in a US dollar account. I will be converting it asap.


@Carol, thanks for the pm btw.

yw M. I have another concern with respect to the States going bankrupt. And that has to do with pensions and medical benefits that those of us earned through years of paying into the system. Will those be stopped? That would hurt the elderly, especially those who are on fixed incomes.

Singapore economy grows record 14.7% in 2010
http://www.breitbart.com/article.php?id=CNG.5a8be64a390a05a0616ab3f202e0a1bf.d1&show_article=1

States Budgets - Day of Reckoning

WATCH this 60 MINUTES segment on impending state and city defaults and bankruptcies. It's all dire but few grasp how major defaults on State and Muni bonds are going to gut the banking industry publicly. 2011 is the year we go over the cliff and here the Governors themselves are saying it. They just don't acknowledge Peak Oil. But from their tone it's pretty obvious they don't expect a recovery. --

(CBS 60 Minutes) By now, just about everyone in the country is aware of the federal deficit problem, but you should know that there is another financial crisis looming involving state and local governments.

It has gotten much less attention because each state has a slightly different story. But in the two years, since the "great recession" wrecked their economies and shriveled their income, the states have collectively spent nearly a half a trillion dollars more than they collected in taxes. There is also a trillion dollar hole iln their public pension funds.

The states have been getting by on billions of dollars in federal stimulus funds, but the day of reckoning is at hand. The debt crisis is already making Wall Street nervous, and some believe that it could derail the recovery, cost a million public employees their jobs and require another big bailout package that no one in Washington wants to talk about.
continued at: http://www.cbsnews.com/stories/2010/12/19/60minutes/main7166220.shtml?tag=contentMain;contentBody

Carol wrote:yw M. I have another concern with respect to the States going bankrupt. And that has to do with pensions and medical benefits that those of us earned through years of paying into the system. Will those be stopped? That would hurt the elderly, especially those who are on fixed incomes.

Singapore economy grows record 14.7% in 2010
http://www.breitbart.com/article.php?id=CNG.5a8be64a390a05a0616ab3f202e0a1bf.d1&show_article=1

Carol, Ain't dat da truth! I paid into "FICA" or the social security fund, at a rate of up to 17% all of my working life, to the actual physical health detriment of my son, whilst trying to take-home enough salary to buy food when I was an office worker. I think that such a high percentage paid in, with the possibility of no payout now, should be considered as theft and usury. I often wonder how big the "savings fund" called Social Security, would be, had we never been robbed of funds out of the plan, in the first place. Think of the interest we should have accumulated by now! The first theft went straight to the military budget. You and I should be receiving a payout that would keep us in food and oh so much more, in our retirement years. We shall see if we receive much, if any, of the money that was taken straight out of our paychecks when we could have used it to feed our dependent children at the time...It really hurt to pay into the fund, truly. I'm so concerned about what will happen to those of us who were forced to buy into a fund that contains what,zero? at this point. There are terms for this type of financial dealing.

Ha ha Dinars and Swiss Francs? Where I live, they think Dinars are where you go to eat Swiss Francs like swiss steak or franks. Like in diner hamburgers and hot dogs. Oh yeah, this is getting very interesting...

coins do not devalue... go for older quarters and half dollars. Silver dollars if you can get them.

Go to your local bank first as it is straight across.

On ebay it's another story. http://shop.ebay.com/i.html?_nkw=+silver+dollars&_sacat=0&_odkw=morgan+silver+dollars&_osacat=0&_trksid=p3286.c0.m270.l1313

If the US economy crumbles, there will be one of two scenarios. One is another Great Depression. Deflation of prices and everyone out of work. This was caused by a contraction of the money supply. The Fed quit printing money and the economy shrunk. This is not what is currently happening.

The other scenario is one of Hyperinflation. This is caused by over printing of money to pay off banks' debts. This is happening. In a hyperinflation situation, goods go up in price over night, as there is so much demand for goods, and no one wants paper currency any more.

Ok, so one of the things that is being said is to pay off debt. Paying off personal debt actually helps shrink the money supply which causes a recession/depression.

Wouldn't it make more sense to borrow as much as possible and buy goods/silver/land/etc. as long as you lock in the interest rates long term? Hey if they'll lend it today, they may not tomorrow!



Look at it this way. You borrow $1000, and buy silver. The dollar collapses and tomorrow it takes $10000 to buy as much silver as you did today. Sell 10% of your silver and pay off the loan!

BRILLIANT!

if glas steagle is not re instated then any tinkering with fiat currencies is more bandaid. the debt mountain is created using fictisuous valueless derivatives. the usa recognizes this fact and presses the delete button on derivatives or the whole world goes down in the next 6 months.

some people may have forgotten that there is no way to bailout of pay back 1.4 quadrillion in fake paper.. its a con game. i wait to see ireland xplode in revolution first in 2011 then soon to be followed by the uk and the rest of the piigs.

This is from last September
The Road to World War III – The Global Banking Cartel Has One Card Left to Play
So brace yourself… unless we significantly change our present course, we are on the road to World War III.

The following is Part I to David DeGraw’s new book, “The Road Through 2012: Revolution or World War III.” This is the second installment to a new seven-part series that we will be posting throughout the next few weeks. You can read the introduction to the book here.

I: Economic Imperial Operations

When we analyze our current crisis, focusing on the past few years of economic activity blinds us to the history and context that are vital to understanding the root cause. What we have been experiencing is not the result of an unforeseen economic crash that appeared out of the blue with the collapse of the housing market. It was certainly not brought on by people who bought homes they couldn’t afford. To frame this crisis around a debate on economic theory misses the point entirely. To even blame it on greedy bankers, while essentially accurate, also misses the most vital point.

This crisis is the direct result of a strategic economic attack on the existence of a middle class and democracy worldwide. The stock market and economy have become weapons of mass oppression manipulated by an imperial banking cartel to impose order and exploit the masses. This crisis boldly represents the manifest evolution of the fascist spirit reasserting itself as the dominant ideology.

Any fairytale notions of the United States being a democratic republic built on the rule of law have been utterly dispelled. As a nation we have been bred and conditioned to be dangerously naïve to the darker forces which operate beyond the spotlight of the mainstream media. We have been blinded to what has been developing throughout the world.

The economic imperialism that has now blown-back to the United States and Europe has been evolving for decades and can be directly traced back to the end of World War II, to the birth of the CIA, International Monetary Fund (IMF) and World Bank.

For those of us who have been paying attention to economic imperial operations that have been carried out against countries throughout the world, this looks all too familiar. The IMF and global bankers have conquered the second and third world, and they have now moved on to countries within the first world. Western European and American working classes are in the cross-hairs now.

Economic and societal indicators, along with recent G-20 policy decisions, clearly demonstrate that they are carrying out and escalating systemic economic attacks throughout Europe and the US.

To put it in technical terms, the United States government has been taken over by a financial terrorism network. They have bought off leaders of both the Republican and Democratic parties, and have established a dominant role in all three branches of government and throughout the mainstream media. They have complete control of the economy, stock market, US Treasury, Federal Reserve, World Bank, IMF and global banking system. Free market capitalism has collapsed; it’s now a rigged global market. This is an organized criminal operation, an imperial fascist movement that is determined to destroy our very way of life.

A war has already been launched against us.

In just the past three years we have lost an unprecedented amount of national wealth, trillions upon trillions of our tax dollars have been looted by Wall Street, endless wars, enormous subsidies for the most profitable global corporations and tax cuts for the richest one percent of the population. Never before, in the history of civilization, has a nation been so thoroughly and systematically fleeced.

This is all the result of a coordinated economic attack by a global banking cartel against 99 percent of the US population.

Until we can become politically intelligent enough to see this as the reality and root cause of our current crisis, we will not be able to overcome it, our living standards will continue to decline and we will all be sentenced to a slow death in a neo-feudal system built on debt slavery.

The average American is horribly naïve to just how depraved, corrupt and addicted to power this banking cartel is. Through their control and domination of the mass media, they have kept their crimes against humanity out of public consciousness. We have been shielded from the global devastation and death toll that they have already wrought. The result is an unsuspecting population of confused and passive people having their future ripped out from under them, right before their eyes, without any organized defense or resistance.

II: Violence on the Horizon

As the entrenched global banking cartel continues to control domestic political policy, the next phase of this crisis will inevitably feature an escalation into mass violence. As the Army War College stated, the Pentagon is preparing for “violent, strategic dislocation inside the United States” and “widespread civil violence” due to “purposeful domestic resistance.”

In clear signs of what is to come, rioting and violence as a result of economic turmoil has already been experienced in many countries throughout the world. However, civil unrest has not yet occurred within the United States. There are many theories as to why there has been so little resistance from the US population thus far, and several factors play into it. The most significant factor is that social safety net programs have been vital in preventing people from resorting to extreme measures. Currently, a stunning number of Americans, 52 million, are receiving life-sustaining assistance from government “anti-poverty” programs, such as food stamps, unemployment benefits, Medicaid and Medicare. This has already stretched a social safety net system that is designed to handle significantly less people to its limit. This safety net system has now been drained of all reserve resources over the past two years, and is obviously not sustainable under current economic and political conditions.

As social safety net programs have been drained of reserves, many US citizens have also been burning through their personal savings. Over the past few years the percentage of Americans living paycheck to paycheck has dramatically increased. In 2007, 43 percent of Americans were living paycheck to paycheck. In 2008, the percentage increased to 49 percent. In 2009, the number skyrocketed up to 61 percent. The most recent number for 2010 has exploded to a shocking 77 percent. This means in our nation of 310 million citizens, 239 million Americans are one setback away from economic ruin and millions more are in danger of having to rely on government assistance for survival.

So as this prolonged economic crisis continues, these safety nets, that are already overwhelmed, will have to support more and more people and will inevitably break down. As we have just begun to see, budget cuts to vital social programs on the state and federal levels will become increasingly severe right at the point when many more Americans will need them. As the 52 million Americans currently surviving in “anti-poverty” programs are gradually cutoff from life-sustaining government assistance – and as the 239 million people now living paycheck to paycheck, buried in debt, stressing out and working their asses off just to make ends meet realize that things are not going to be getting any better — and are only going to get worse — social unrest and outbursts of violence will eventually start to bubble up to the surface and the ruling elite will no longer be able to maintain power by simply deceiving the masses via mainstream media propaganda.

When an overwhelming majority of the population directly feels negative effects upon their own living standards, the propaganda system collapses. The illusion comes crashing down and people will finally start to get wise to the horrific scam that is being played on them. When they wake from their media-induced American dream state and realize that they are now living in a nightmare, as crazy as it may sound, people will actually stop voting against their own interests. The apathetic majority, that doesn’t vote, will become active in the interests of self-preservation as their survival instincts kick in.

The handwriting is on the wall and the ruling class has to realize that by the time 2012 rolls around, their puppet politicians will be voted out of office, or their heads will roll, quite literally.

Looking at this from a purely technocratic sociological viewpoint, avoiding mass riots and violence while this many desperate people lose life-sustaining programs appears to be an impossible task, and given our current economic and political environment this seems inevitable.

In an article titled “A Planet at the Brink: Will Economic Brushfires Prove Too Virulent to Contain?” Michael T. Klare explained:

“As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants, and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a ‘lost decade,’ the result could be a global landscape filled with economically-fueled upheavals.”
continued at link

http://www.pakalertpress.com/2010/09/29/the-road-to-world-war-iii-the-global-banking-cartel-has-one-card-left-to-play/

Definately preplanned.

30 Reasons Why 2011 Is Going To Be Another Crappy Year For America’s Middle Class

http://www.blacklistednews.com/index.php?news_id=12149

Do you think that 2011 will be a good year for America’s middle class? Well, you might not be so optimistic after you read the 30 statistics posted below. The truth is that 2011 is going to be another crappy year for America’s middle class, and there is not a whole lot that you or I can do about it. Sadly, what we are facing as a nation is not just a short-term economic downturn. Rather, there are some very serious long-term economic trends that are absolutely ripping apart the U.S. middle class. For example, did you know that even though our population has been growing at a brisk pace we have lost about ten percent of our middle class jobs over the past decade? The vast majority of jobs that have been created have been low paying service jobs. We now have hordes of highly educated young people that are waiting tables and that are welcoming customers to Wal-Mart. Without good paying jobs there is no middle class, but today American corporations are actually creating more jobs overseas than they are inside the United States. This has helped pad the profits of the big corporate fatcats, but it has been devastating for middle class communities across the United States. Every time a factory gets closed down in America and gets set up in some other country instead, it means that the U.S. middle class is shrinking just a little bit more. The new “global economy” has been good for the bottom line of the largest U.S. corporations, it has been great for countries like China and India, but it is absolutely wiping out the U.S. middle class.

If you still have a good paying middle class job you should be very thankful. The total number of those jobs is rapidly decreasing. Millions of those that have lost their jobs over the last several years have been forced to take lower paying jobs or even part-time jobs in an attempt to fill the void. Millions of others have not been able to find a job at all.

Meanwhile, the price of everything is going up. Have you been to the supermarket lately? The price of food is going up substantially. Many analysts are already talking about $5 a gallon gasoline in 2010. Utility bills are going through the roof. Health care premiums are soaring. Many state and local governments are seriously hiking up taxes and fees.

Tens of millions of American families are going to be forced to make what they do have stretch even farther in 2011. But for many American families the breaking point has already been reached. An all-time record number of Americans is on food stamps. An all-time record number of Americans is living below the poverty line. Personal bankruptcies and mortgage defaults continue to hover around record levels.

The U.S. economy is shaking like a leaf, and the people that are feeling it the most are the hard working American families that just want to make an honest living, pay the mortgage and feed their families.

Unfortunately, 2011 isn’t going to be any easier for those families. As a nation we continue to pursue the exact same economic policies that have allowed these horrible long-term economic trends to develop. Things are not going to change until our country starts moving in a fundamentally different direction.





The following are 30 reasons why 2011 is going to be another crappy year for America’s middle class….

Financial Bubble Alert:: "Backdoor Bailouts" and The Creation of Bogus Money
by Mike Whitney
January 7, 2011
Global Research, Information Clearing House

Counterfeiting is an effective way to stimulate the economy, but the costs can be quite high. For example, if trillions of dollars in fake cash was injected into the financial system (undetected), we'd probably see the same type of thing that we see when a credit bubble is inflating; asset prices would rise, unemployment would fall, economic activity would increase, and GDP would soar. But when people figured out what was going on, investors would panic, the markets would crash, and the economy would go into a deflationary nosedive.

So here's the point: Deregulation allows the banks to create as much bogus money as they want in the form of credit. When a bank issues a loan to someone who can't repay the debt, it's counterfeiting, which is the same as stealing. This is what the banks did in the lead-up to the Market Meltdown of '08; they issued trillions of dollars of mortgages to people who had no job, no income, no collateral, and a bad credit history. The banks abandoned all the standard criteria for issuing loans, so they could increase the quantity of loans they produced. Why? Because bankers get paid on the front-end of the transaction, which means that when they make a loan, they mark it as a credit on their books so they can draw a hefty salary and a fat bonus at the end of the year. In other words, there are powerful incentives for bankers to do the wrong thing, which is why they act the way they do.

Now that the economy has begun to stabilize, there are signs that the whole process is starting over again and another bubble is already emerging. Check out this clip from an article in The Tennessean titled "Auto lenders approve more subprime borrowers": "As the auto industry continues to make a slow recovery from tough times of the past two years, lenders are finally loosening credit restrictions and approving car loans for customers with less than prime credit ratings. In the third quarter last year, for instance, the share of new vehicle loans to "credit-challenged" consumers rose 12.7 percent compared with the same period in 2009, said Experian, one of the nation's major credit reporting agencies.

Loans to borrowers with subprime credit scores as low as 550 were among categories that grew the most....Credit restrictions were the biggest reason people stopped buying new cars during the recession, but "that's not a problem anymore," said Marty Horn, sales manager at Nashville's Crown Ford.

"We're not having any trouble finding financing for anyone with a score in the 600s," he said. "We can get most people financed through Ford Credit, and if that's not available, we have other lenders ready to step in."...

"We're seeing loans of up to 140 percent of value from some lenders, and Capital One is by far our best lender for the subprime customer, which is below a 620 score," said Michael Creque, general manager of Alexander Chevrolet-Cadillac in Murfreesboro." ("Auto lenders approve more subprime borrowers", The Tennessean)

Can you believe it? Auto finance companies are lending up to "140 percent of value" of the loan to "credit-challenged" consumers? And this is going on just two years after the biggest meltdown since the Great Depression.

Keep in mind, that the housing/credit bubble cost ordinary working people $12 trillion in lost retirement savings and home equity while the perpetrators on Wall Street have seen their profits skyrocket. Bubblenomics is not "innovation" and it certainly does not increase productivity. It merely transfers wealth from one class to another via credit manipulation.

Consider the recent reports about improvements in the economy. While it's true the data is looking better (retail sales, personal consumption, manufacturing, car sales etc) it's also true that the credit cancer is spreading again. Consumer demand is still weak because unemployment is nearly 10 percent and wages remain flat. So the only reason spending is up, is because credit is expanding. But that means more lending to people who are incapable of repaying their loans which will inevitably lead to another bust. Here's an excerpt from an article titled "Zero-down mortgages endure in rural areas" from bankrate.com which proves my point: "The zero-down mortgage is still alive in the form of the USDA home loan....People buy houses without down payments or mortgage insurance under the Department of Agriculture's rural development housing program. The catch? The property must be in a designated rural area. The surprise? Some eligible properties are in places that most people would not consider rural....

The borrower pays an upfront guarantee fee of 3.5 percent of the loan amount, which most opt to roll into the loan. Under some first-time buyer programs, borrowers can have their closing costs paid....Unlike most low or no-down-payment loans, Defngin points out, USDA loans do not require mortgage insurance...... USDA does not set a minimum credit score, and lender minimums vary." (bankrate.com)

So a mortgage applicant can purchase a home with no down payment, no mortgage insurance, and no minimum credit score from the USDA? What the heck is the USDA even doing in the real estate business? This is just a sneaky way of creating another asset bubble. It's just more counterfeiting.

Now take a look at this from torquenews.com. Same thing. It shows that the big auto manufacturers are jumping on board the credit bandwagon, too. Here's a clip: "Major auto makers and dealers will start the day after Christmas by pushing their zero percent down deals and hopes toward more year-end car sales....TorqueNews' screening of five top U.S. and Japanese automakers' year-end offerings shows all of them having some type of zero down deals to attract more car shoppers....

The U.S. luxury automobiles are offered with zero down year-end sales deals. All of the GM's products on its website are offered at with zero percent down-payment. GMC has no monthly payment until spring and $1,500 total allowance if the shopper finances with Ally. The 0% APR apply to qualified buyers on any GMC...." (torquenews.com)

"Zero down"; Weeee! "No monthly payment until spring", Weeeee! "$1,500 total allowance if the shopper finances" with us; Weeeee! Free money, never pay, borrow your way to prosperity; Weeeeeeeeeeee!

Haven't we seen this movie before? Is Congress really so lazy and corrupt that they're willing to let the economy drop back into the shi**er just so some shifty bankster can buy a few more baubles at Tiffanys?

Then there's this from yesterday's news: Allstate vs. Bank of America. Allstate wants to get its money back from B of A on toxic mortgage-backed securities. Here's the drift from the LA Times: "The case pits insurer Allstate against Bank of America and Countrywide, the giant mortgage lender that Bank of America bought in 2008. The suit claims that Countrywide misrepresented the risks posed by the bundles of mortgages it sold to investors such as Allstate, which sank $700 million into the securities from 2005 to 2007. After the housing bubble burst, the mortgages in those securities started defaulting at a torrid pace, causing the value of the securities to plummet.

..... A Bank of America spokesman suggested that Allstate was "a sophisticated investor....looking for someone to blame." But Allstate's examination of a sample of the mortgages in each bundle found that Countrywide's disclosures consistently understated such important indicators as the percentage of mortgages with low down payments or with no proof of the borrower's income (so-called liar loans). And by Allstate's analysis, Countrywide's disclosures weren't off by a little bit. For example, in 11 securities that were supposedly free of "underwater" mortgages, up to 14% of the loans turned out to be larger than the value of the house." ("Housing Shocks", editorial, Los Angeles Times)

The "sophisticated investor" defense is an excuse that fraudsters use when they've just ripped you off. They say, "I thought you were smarter than that. I thought you were a "sophisticated investor."...which just dumps a little salt in the wound.

The truth is, Countrywide clipped Allstate for $700 million in garbage loans and now claims that it procured the money "fair and square". Right. But they do have a point. In a system where there are no rules, anything goes. Allstate might lose their suit simply because the laws now mainly protect the interests of the predators rather than the victims. The banks are free to whip-up their junk debt-instruments (comprised of liar's loans etc) and peddle them to anyone who is gullible enough to invest their money. It's a con-game.

One last example. Many people have noticed that there was a slight uptick in credit in the Fed's latest report. That's good, right? But, as it turns out, the only area where credit really improved was student loans which grew about 80% year-over-year, or roughly $120 billion. So why the sudden and explosive growth in student loans? The answer appeared on an economics blog called benzinga.com via firedoglake. Here's an excerpt: "The Federal Family Education Loan program (FFEL) allows private financial institutions to provide students with loans, but the government assumes the risk of default, and pays the financial fees while the student attends college. This amounts to privatized gains combined with socialized loans....

Under the FFEL program, financial institutions like Sallie Mae, Bank of America, National Education Loan Network, JPMorgan Chase, Wachovia, and Wells Fargo would originate these FFEL loans with students, and then sell them on the secondary credit market. In 2008, the credit market dried up, and the private lenders had nowhere to sell these government guaranteed loans. So, the government stepped in to buy up these loans and protect a program that was already a massively wasteful corporate boondoggle.

The bailout was authorized with HR 5715 Ensuring Continued Access to Student Loans Act (ECASLA). The bill allowed for the Department of Eduction to produce three different programs, the Loan Purchase Commitment Program, the Loan Participation Purchase Program, and a buyer-of-last-resort Asset-Backed Commercial Paper Conduit.

This purchase program — which amounted to the department of education buying privately-originated student loans that were intended to be securitized but now could not be — was radically expanded in 2009 and 2010, with a purchase amount target of about (you guessed it) $120bn. ("The hidden message of the consumer credit release" )

So, there is no improvement in credit. Not really. It's just more backdoor bailouts that are dolled up to look like things are getting better. But things aren't getting better; we've simply restored the same crisis-prone wholesale credit system ("shadow banking") with trillions of dollars of government subsidies, bailouts, stimulus and guarantees, and now we are speeding towards the next big collision. That's not what I'd call "economic recovery". I'd call it stupidity.

Check out Whitney's economics blog at Grasping at Straws

SOURCE: http://globalresearch.ca/index.php?context=va&aid=22679

Bedtime for the Poor and the Middle Class - Welcome to the 2011 American Dream
By SAUL LANDAU
07-01-2011

"What’s good for General Motors is good for the country,” was a statement attributed to former GM CEO Charles Wilson in 1953, during hearings before the Senate Armed Services Committee. Could he, as Defense Secretary, make a decision adverse to the interests of General Motors? Wilson assured the Committee such a situation was inconceivable "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement got reduced.

But the words resonated because, GM employed more workers than the US government – second only to the number on payroll for Soviet state industries. In 1955, General Motors became the first American corporation to pay taxes of over $1 billion. (Wikipedia)

Behind Wilson’s apparent gaffe, however, GM had its gigantic reality base. It did create many millions of jobs, not only in the direct manufacture , shipping and sale of cars, trucks, and other products, but in its peripheral stimulus for rubber, glass, and all the other components required to make a car.

In the 1950s, the United States was the producing mammoth of the world. Banks made loans to companies that then produced goods. That America has evolved into a center for exporting jobs and playing with (gambling) money not investing it in US production.

General Motors executives could claim today “what’s good for their company is good for the country” if they referred to China where it manufactures more autos than in the United States. GM now earns more from foreign sales than it does from US car sales. A skilled welder for GE in Michigan in the 1980s earned $35 an hour; his equivalent in today’s Mexico doesn’t earn that much in a day.

The much heralded – by Bill Clinton, for example – “globalization process” stimulated General Electric, once the company who hired Ronald Reagan as a TV host to represent their “Americanism,” has repeatedly reduced its US staff. Recently, however, it announced plans to hire more than 1,000 Brazilian workers for a new plant it will initiative down there for a cost of over half a billion dollars. GE also plans to invest $2 billion in its Chinese operations.

Corporate headquarters can remain in the United States, but the guts of the old companies – remember “as American as Mom, apple pie and Chevrolet”? – reside in greener pastures for production and sales. US workers became simply too costly, even as the corporations cut their wages and benefits steadily from 1973 on.

When the credit bubble burst along with the inflated housing bubble, the companies looked to India, China, Brazil and Indonesia where economies were growing and wages remained “reasonable.” They could produce and sell their goods more easily there and slice higher US payrolls. That equals profit – or capitalism.

Corporate profits rise, meaning good news for the stock market, and wages drop or stagnate (more productivity per worker). In addition, the large pool of long-term unemployed tends to keep wages down. Without full employment, credit and housing US sales will not make robust comebacks and poor people will not return to their consumer habits quite so easily.

After a decade of depression in the 1930s, US entry into World War II brought a monster-sized surge in government spending, which also translated into massive job creation – and economic boom. As corporate profits rose in manufacturing, the companies hired more workers and expanded, because paid workers bought stuff – even before some genius thought of developing shopping malls.

In 2011 consumers in the consumer society don’t have the money or credit to do what they’ve been conditioned for. They owe money and struggle to pay their rent or mortgage payments and worry about not having a pension; and the now seemingly uncertain future of social security.

The media duly reports the condition of the Dow Jones Industrial Average although most of those who say those words – like their listeners – don’t understand what they mean. Wall Street has risen. The GM that needed our bail-out money makes its products elsewhere; its executives shudder at the notion they had to take money from the hated government.

Investors and traders celebrated the new year, thinking the market will boom in 2011. The tens of millions unemployed, foreclosed or already homeless went to sleep early – to escape the pessimism that has descended on the middle and lower middle classes in much of the country. Their home prices, the basis of their future, have slipped, their jobs if they still have them have grown insecure and their grown kids have moved back in.

The Republicans who control the House will try to cut Social Security and Medicare – they don’t dare tinker with the useless defense budget. Some Democrats will get bought by the usual buyers. Members of both Houses will demand more tax cuts – from which banks, corporations and the disgustingly rich will benefit – on the grounds that this will create jobs; not. The energy lobbies will successfully deter moves to make serious inroads in emissions and our leaders will continue to talk of the American dream – which will still be there for the poor and much of the middle class, when they’re sleeping.

Saul Landau’s new film is WILL THE REAL TERRORIST PLEASE STAND UP. CounterPunch published his book A BUSH AND BOTOX WORLD.

SOURCE: http://www.counterpunch.org/landau01072011.html