The U.S. Economy & The Price of Oil: Could The Fix Be In?

     Today, I'm going to give a disclaimer, right off the bat.  I am no authority on economics, world politics, or how commodities are manipulated.  But I have pretty strong instincts; and something "just ain't right", as they say, about falling gas prices and the price of a barrel of crude oil.

     What I'm writing will come nowhere close to explaining all the manipulation going on among the world players.  I know I'm just scratching the surface, but perhaps you have been asking the same questions I have.  What's really going on, and what is the endgame in all this mad maneuvering?

     First of all, are you as quizzical as I am about how and why the price of a gallon of regular gasoline has dropped by 23 cents in the last month, and nearly one dollar (90 cents) since this time last year (according to GasBuddy.com)?  And why have the voices that just a few years ago were shouting, "Drill, Baby, Drill", are now quietly looking at slowing down production.   

     From what I can understand, part of the reason is pure economics.  With the success of the Bakken  reserves in North Dakota, and the Permian Basin and Eagle Ford shale fields in Texas, there is an oversupply of natural gas.  It's the old axiom we learned in Economics 101:  Prices are determined by supply and demand; and right now, our supply is growing faster than the demand for gasoline.  U.S. car manufacturers are building more fuel-efficient cars, which creates less demand for gas, which directly effects the bottom line of oil companies. 

     Although foreign markets, like China and India, are developing a market for increased supplies of gas and oil, there is not a huge desire for exporting our oil.  If you will remember, just a few short years ago, we were all screaming about the $4/gallon prices and calling for more domestic production; we all wanted energy independence.  So the American people are happy with the low gas prices, but the American oil companies are starting to fidget.  In fact, here in Texas, just two-three months ago, expectations were that the exploration activity would continue for another 15-20 years.  Just this last week, there are local rumors that production could start shutting down, as the companies drastically cut their risks.  They just can't afford to spend the huge outlays for speculative drilling, if the supply for their product is diminishing.  In other words, their businesses are becoming less profitable.  It's really this simple -- when you see your profit start to decline, you cut back on your expenditures.  

     I won't even begin to try to describe how this could potentially affect the banking industry who has provided extravagant loans to these oil companies.  What do you think happens to a bank's balance sheet when oil company executives decide that the costs of further exploration outweigh the risk or profits, and bankruptcy is the most prudent solution?  Even selling the loan for pennies on the dollar means huge losses to major financial institutions.  Think that might be the tipping point for our economy?

     But what else is causing what seems to be a drastic and sudden drop in oil prices?  This gets a little more complicated and hard for me to understand, but it's important for us to consider.  The Organization of Petroleum Exporting Countries (OPEC) met this past week, and decided to keep the price of a barrel of oil at just over $70/barrel.  In case, you're like me, I didn't have a clear understanding of exactly what OPEC was or how they operated.

     Here is the "official" explanation:  The purpose of OPEC for members is to "coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry."  Furthermore, OPEC member countries monitor the market and decide collectively to raise or lower oil production in order to maintain stable prices and supply.

     OK, now the picture is getting clearer ... wouldn't it be important to know who the major players are?  Because it sure seems to me that certain members could collude with other members to influence the market and economies of competing members.  And there is always the question of who is lurking in the background, influencing the decision-making.  Currently, OPEC members are primarily from the oil-rich Middle East, with Iran, Iraq, and Saudi Arabia being among the founding members.  

     From a purely political perspective, what better way for countries. who are antagonistic against the U.S., to harm our economy than to start effecting the most successful industry in this country, and start driving down profits?  Because make no mistake, even though the American people may not recognize it, foreign governments and economists are well aware that the U.S. domestic oil industry is propping up our economy.  Just let us experience another oil bust like we did in the 1980's, and the mask will come off.

     All the media propaganda, false GDP growth reports, bailouts, and failed banking schemes will no longer be able to hide the truth -- the American economy is nosediving, and we may not have the oil industry to continue the masquerade.  

     And who would love to see that scenario take place more than Russia?  Through our sanctions, we have attempted to compromise their economy.  So, through their alliance with oil-rich Iran, this would be an opportunity to reciprocate.  What better way to ensure their leadership in the world's oil supply, while striking a blow to our own status, and more importantly, our economy?

     I waived my rights at the beginning of this post, that I am no expert on the petroleum industry.  And I know these are all fractured thoughts and ideas, but when my spider senses are tingling like they are now, I have to give voice to what my instincts are telling me.  Things are not as they seem, and something tells me that the puppet masters are  working their strings and the game is rigged.  Is our house of cards about to come tumbling down?  

     If you have a more educated insight, I would welcome your comments.  It's a good time to engage with all of us who just want to know the truth.  After all, we're in this together.  So, my question is this:  Is what I'm sensing and seeing, really happening?  What's your opinion?

Psalm 2:1    "Why do the nations assemble with commotion [uproar and confusion of voices], and why do the people imagine (meditate upon and devise) an empty scheme?"

     

      

     

Our Loss of Economic Freedoms Echoes The Reasons We Fought the American Revolution

   

     Freedom and Free Enterprise ... they go hand-in-hand.  So when the Cato Institute released its 2014 Annual Report on the Economic Freedom of the World, it was bad news for the U.S. -- we didn't even finish in the Top Ten! And, yes, the Cato Institute is, by its own definition, "a public policy research organization — a think tank – dedicated to the principles of individual liberty, limited government, free markets and peace."  Those who will want to dispute its findings will do so on a partisan political basis, but the facts don't lie ... we are losing our economic freedoms; the very ones that preempted the founding of this nation.
     Breitbart.com, in their article on this Annual Report, informs us that "as recently as 2000, the US ranked 2nd in the world, in terms of boasting a free economy. The US's declining ranking will lower future economic growth."  That is something that should concern every American; and not just for the impact on our wallets! It has as much to do with the "freedom" part of the report, as it does the "economic".  And here's why:  The Cato Institute measures 5 broad factors in scoring each country's economic index ... 1. Size of government; 2. Legal structure and security of property rights; 3. Access to sound money; 4. Freedom to trade internationally and; 5. Regulation of Credit, Labor and Business.
     In case these considerations sound familiar, they are listed in our Declaration of Independence as reasons for our grievances against Great Britain, and became aligned with the eventual causes for our Revolution and the founding of a new nation.  But, today, are these causes even recognized as crucial to the American experience?  Have we lost the sense of who we are in the midst of a bloated government and a sea of entitlements?  Do we not see that the encroachment on our personal liberties, along with excessive regulations and the intrusion of the U.N. in our domestic affairs does not fit who the United States was designed to be?
     In case it has been a while since you had an accurate history lesson about our nation, let me remind you of what the Founders meant in the Declaration of Independence; that we "are all endowed by our Creator ... with Life, Liberty and the Pursuit of Happiness."  Those three principles are the bedrock of America's development -- no matter how they have been maligned.
     The meanings of "Life" and "Liberty" haven't changed much in 230+ years.  But it is important that we understand what was meant by "The Pursuit of Happiness".  To early Americans this phrase was known to represent the individual right of every free citizen to own property and pursue a living.  That was "Happiness", and Americans knew it was ours, by the grace of God.  Today, the American Dream still resonates around owning your own home and being able to receive fair wages for an honest day's work.  However, we've pretty much discarded the part about God being responsible for our blessings.  I'm absolutely convinced that has played a part in our failing economic condition.
     By including that phrase in the Declaration to the British Monarch, the Founders hoped that we would keep inviolate, not only our responsibilities to preserve the Constitutional Republic, but preserve our enduring hunger for personal rights and liberties that guaranteed not only a man's right to  personal property, but that resulted in competitive and fair enterprise.  This country was not founded on the beliefs of "community property" or "state-regulated commerce."  And that's what was at the center of our complaints against King George III.
     The list of "Oppressions" and "Grievances" by Thomas Jefferson and his Committeemen sound eerily familiar... the stalling and refusal to pass laws left the colonists "exposed to all the dangers of invasion from without, and convulsions within".  The King established "a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance" -- sounds like the IRS to me.  Furthermore, it was pointed out, King George "combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation."  And as it pertained to their Economic Freedoms, it was pointed out that the tyrant king was "cutting off our Trade with all parts of the world [and] imposing Taxes on us without our Consent."  Does this make you think of U.S. trade practices that hurt our economy, and the Supreme Court decision that rendered the Affordable Care Act a tax?
     But perhaps more than any other principle, it was the Rule of Law that the Colonists cherished the most.  And the Cato Institute's Annual Report sheds an unflattering light on just how much we have neglected that standard.  Per the report, "Protection of persons and their rightfully acquired property is a central element of economic freedom and a civil society. Indeed, it is the most important function of government. The key ingredients of a legal system consistent with economic freedom are rule of law, security of property rights, an independent and unbiased judiciary, and impartial and effective enforcement of the law."
     Breitbart.com summarizes it well:  "The increased use of eminent domain to transfer property to powerful political interests, the ramifications of the wars on terrorism and drugs, and the violation of the property rights of bondholders in the auto-bailout case have weakened the tradition of strong adherence to the rule of law in United States... The rule of law has long been the foundation of America's economic prosperity and liberty. The US ranking in this area has plummeted to a terrible 36th place in the world. This, combined with increased regulation is stifling US economic growth."  Quoting the Annual Report, the website observes, "[t]o a large degree, the United States has experienced a significant move away from rule of law and toward a highly regulated, politicized, and heavily policed state."
     So where do we go from here?  Needless to say we do not score well in the five categories for economic freedoms.  The size of our government is clearly prohibitive, and it is obvious we don't have access to sound money.  And as long as we continue to over-regulate Commerce and ignore the rule of law and property rights of individuals, our economic future will continue to slide.  Just as the Founders determined, when there is weakness in the Rule of Law, and an improper appropriation of property rights, economic freedoms will be inhibited.  It's time that Americans reacquaint themselves with trustworthy American principles.  It won't be a quick fix, or an easy one; but one that  is necessary if we are to regain our standing in the world... then, as now, our lives, our fortunes and our sacred honor depend on it.

James 1:25   "But he who looks into the perfect law of liberty and continues in it, and is not a forgetful hearer but a doer of the work, this one will be blessed in what he does."

   

The Numbers Matter

     During the Fall of 2013, the Federal Reserve conducted a survey of 4100 households to gauge their economic and financial well-being.  Newsmax is reporting the statistics, and they are not very encouraging:

•  13% said they were struggling to get by
•  34% reported they were "somewhat worse off" or "much worse off" than before the Great Recession hit in 2008.
•  33% of those who had applied for credit in the previous 12 months said they were turned down or given less than they requested.
•  24% had some type of education debt.
•  31% of people who aren't retired said they had no retirement savings or pension, including 19% of those aged 55 to 64.
•  Almost 50% of adults weren't actively thinking about financial planning for retirement, with 25% saying they had done no planning at all.
•  26% of homeowners said they expected prices in their neighborhood to increase by as much as 5% in the 12 months following the survey period.
     It's not hard to see why there is so much pessimism among American households.  The job market is still lagging far behind the needs of American workers; many are having to settle for part-time jobs when full-time employment is needed and wanted.  Manufacturing is stagnant; and credit card debt is almost a necessity in today's household.
     My family and I recently discussed the sad state of the country's economy and how it is affecting the generations.  If they had worked hard and diligently, the older generations used to look forward to leaving a comfortable inheritance to their children.  But today, with the uncertainty of government programs like Medicare and Social Security, they are not sure if they are going to have to use up their legacy.  Rising property taxes are a real threat for the elderly and retired; they fear losing the one asset that could benefit their children upon their death.  Leaving any kind of financial benefit is no longer taken for granted.
     Then I worry about the younger generation.  New college graduates and the young marrieds just starting their families do not see our future clearly.  They don't have enough experience to see that their economic future will not mimic that of their parents and grandparents.  Everything is going to cost more, and their salaries (if they are lucky enough to gain employment and keep a job) will not meet the demands of rising food costs, insurance, and mortgages.  They will not have the luxury of "security" that we have known in the past.  Everything is changing ... they just don't see it yet.
     Our Education standards are falling; our quality of healthcare is going to take a drastic nosedive; our privacy is disappearing; and our society and culture are in moral decline; and "believing in God" can even be widely divergent in its definition.
      If the signs of a dying culture are the lack of faith, a lack of a moral foundation (relative moralism doesn't count), the breakdown of the family unit, and a general lack of caring for other people --- then I guess we fit the bill.  The end of this republic may ultimately come at the hand of an external enemy, but the genesis of our demise will have been internal.  We simply did not guard what we were given by man or God.  And now we're paying the price; a just penalty, I might add.
     While the numbers don't lie, and I think we are reaping what we have sown, I can't help but believe that victory can still be ours.  I sense an awakening in the souls and minds of people who are forced to take a good, hard look at what's going on outside their personal domains.  How can they not?  The world is going to effect us all.  Whether it is a worldwide pandemic; a terrorist attack; communities overwhelmed with illegal immigrants; water shortages; or a natural disaster; we are all going to eventually have a crisis of faith.
     So it is my prayer each night that this nation will awaken to its need for God; to face our mistakes, our selfishness, and our transgressions, and seek His face as have we done throughout our past.  It is never too late to ask for forgiveness, and He is never too slow to respond when we are sincere in our repentance.  Is it too late?  I don't think so.  Nightly, I remind God that He has a faithful remnant in this country, and I ask for just a little more time to reach one more person for His kingdom.  He knows the exact number of the fullness of His kingdom on earth, and I hope there is still time to reach one or two more.  Lord, help me to add to Your number!

Revelation 7:9     "After these things I looked, and behold, a great multitude which no one could number, of all nations, tribes, peoples, and tongues, standing before the throne and before the Lamb,"
 
   
     

It's Time To Tighten Our Belts

     There are many of you that will think this is a "softball" post; but I am still amazed at the number of my friends and family who simply don't know how close to the edge of the cliff we are.  Perhaps it's that there are so many events that are capturing our attention -- the Russia/Ukraine crisis; the missing Malaysian flight; the 2014 mid-term elections; and the constant barrage of NSA-spying news, just to name a few.  And that's if you are paying attention.  But there are many among the millions of Americans who still don't have a clue about any of these topics and simply have their noses buried in their iphones, ipads or Facebook accounts.
     I point this out because all of these distractions keep them from focusing on the elephant in the room -- all the warnings by economists, as well as national security experts, that  we are on the verge of imminent collapse.  And it is to these folks that this post is directed.
     I know there are some who will think, "They have cried wolf too many times."  But I would contend that while their timing may be off, their logic is not.  Our government's spending is still out of control; we have lost status in the world due to our foreign policy; there is not a lot of faith in the U.S. dollar as the world's currency; foreign governments are moving into position to take down our economy, and there is not a lot we can do about it -- we don't have any counter-moves.

      "But we're America!", they will say.  "But not the America of old," I will answer.  Those who still have a paycheck must admit that it doesn't stretch as far as it used to.  Just compare what your grocery bill was -- even two years ago -- with what you will pay this week.  Are you driving a new car, or an older model?  Is it a given that your kids will go to the college of their choice; or are you considering the local junior college?  Do you still have health insurance; and if you do, have your premiums increased?
      These are just a few of the obvious examples that our economy is not flourishing -- no matter what the latest press release from our elected officials tell us.  We need to face it.  Things are not getting better!  More people are on food stamps than ever before.  It really is true that the rich are getting richer and those of us in the middle class are sliding down the economic scale.
     And this is not even considering the effect upon our economy should we suffer an attack upon our grid system or any other form of terroristic attack.  We are hanging on by a thread, my friends, so it's time that we all get serious about taking care of ourselves.  You know as well as I do, that we are able to provide for ourselves and our families better than any government institution.  America, in it's federal form, may have fundamentally transformed, but there are individual Americans who still retain that spirit of independence, ingenuity and courage that saw our forefathers survive and thrive through adversity.  Now it's our turn!
     It's time that we get back to basics.  Most of us, if we are honest with ourselves, have enjoyed advantages that our grandparents would consider luxuries.  To be completely honest, I'm afraid that they would think we've grown negligent in minding the store and living within our means.  So what are we to do about it?  To me, it's obvious that we need to get real and evaluate exactly what is necessary to live prudently and frugally.  Admit it.  There are conveniences we can do without, and ways we can tighten our belts; ways we must change our lives in order to make it through the coming storm.  Just consider these few options:
•  Mortgage/Rent:  Many Americans are struggling to pay their monthly mortgage.  It is a huge part of our monthly budget, and with unemployment at record rates, bank foreclosures are running rampant.  Refinancing or downsizing can help us get that expenditure under control, and save a lot of future heartache.
•  Car payments:  These days working families often need more than one car for transportation.  But expensive new cars for every member of the family are only viable for the rich.  Refinancing is also an option for this budget item, as well as getting rid of those oppressive loans by trading into older, less expensive models.  And if you can become a one-car family, then the sacrifice will be worth it.
•  Unnecessary indulgences:  Do you really need that extraneous gym membership or that deluxe cable TV package?  What about all those times you eat out, or the vacations that you can't really afford? What's your clothes budget?  Think you can reduce it?  And how much do you pay for those phone plans?  Take a look at your checkbook.  Other than food, shelter and transportation; where are your resources going?
      You see, we are still living as if American prosperity is still alive and well.  In the backs of our minds we know that all the signs are there for a downturn.  Even our bottom lines are telling us that there are potholes on Easy Street, yet we're trying to pretend that it's smooth sailing.
     I know I'm probably preaching to the choir --- in fact, I hope I am!  Because if you haven't already considered these options, and many more beyond these basic ones, then I fear that you will have a hard time adapting to leaner times, let alone survive them.  I know that sounds harsh, and to some it will sound extreme.  But I believe we can no longer ignore the writing on the wall.  These proposals for trimming your expenditures should already be on your "do to" list, and you should be looking towards long-term preparations for your family.
     I sometimes assume that everyone is on the same level and in the same place that I am.  If you are, then this post is just a friendly reminder to take another look at your strategy.  And if you are still finding it difficult to give up those self-indulgences, and putting off ways to cut back, then let this be a wake-up call.  It will soon be time to pay the piper.  Get prepared!

1 Timothy 6:17     "As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy."
   
   

The Growing Chasm Between The Classes

     In case you need proof that the gap is increasing between society's classes, let me give you a little information.  First, let's take a look at the rich Elite.
     USA Today revealed a report on the opulent apartment towers being built in Manhattan.  One such apartment tower under construction, 432 Park Avenue, will have a top floor higher than the Empire State Building's observation deck. Another will have a top floor higher than any in One World Trade Center, which is officially (by virtue of its spire) the nation's tallest building.

     But it's not only the height of these buildings that make them so grandiose; it's their cost.  The 432 Park penthouse has sold for $95 million; two duplex apartments at One57, now nearing completion, also are under contract, each for more than $90 million. Even a studio apartment on a lower floor at 432 Park (designed for staff — a maid or butler) costs $1.59 million.
     What is so hard to fathom is that we are a nation that has yet to recover from the 2008 financial crisis.  Those that proclaim that our economy is "recovering" are looked upon with skepticism by just about everybody.  So it should come as no surprise that these towers are occupied by a different clientele: a transnational nouveau riche looking for a second (or third or fourth) home. Having made fortunes in nations less regulated economically and less stable politically than the USA, these buyers want a safe investment as much as, or more than, shelter. And they don't want to pay New York resident income taxes.
     Want to get a picture of just who these investors are?   Well, the buyers often hide behind limited liability corporations and confidentiality agreements, but One57 says that more than half of its buyers come from outside the USA, including 15% from China. A Chinese couple recently bought a small, $6.5 million apartment for their daughter to use when she's in college — around 2030.
     So while New York City enjoys one of the biggest high rise building booms in its history, more than 51,000 people — 21,000 of them children — spend the night in city homeless shelters.  The contrast is hard to dismiss.
     So let's take a closer look at these lower income Americans, and see what the statistics tell us.  According to a report by Reuters, the Census Bureau will tell you that the number of poor people in the United States held steady at nearly 50 million last year; virtually unchanged from a year earlier with the overall poverty rate stuck at 16 percent.  But the data also revealed that without tax credits, Social Security payments and other benefits, it would have been higher for the very poor, the young and the old.
     "Millions more people would have been poor in 2012 in the absence of our safety net programs," said public policy and poverty expert Sheldon Danziger, who heads the Russell Sage Foundation social science research center.  There is supplemental data that takes into account benefits that many low-income residents receive, such as food stamps, subsidized school lunches, housing aid and tax credits. It also considers expenses such as taxes, child care and medical costs.
     A spokesman for the Center for American Progress stated, "The new supplemental poverty data show an economy that is not working for many people. But it also emphasizes that millions of Americans are being lifted up by effective work and income supports." -- which tells me that it is a false message of economic stability.  When the government can no longer support these programs, millions will fall into a real poverty zone, and the class disparity will grow wider.
     Now we come to the economic group that should interest us all the most... the middle class.  I would venture that most of us fall into this group, and we are facing a number of economic challenges. Incomes are stagnant or falling, while the costs of life’s necessities continue to rise, and the risks of falling behind grow.  Once again, you will find government and economic institutions that will paint a rosy picture; saying that the last three decades have seen a steady improvement in both the middle and lower income classes.
     In fact, Middle-class incomes have declined over the past decade, and for the past several decades the share of the economic pie that the middle class receives has decreased and fewer people have earned middle-class incomes. Moreover, the costs of middle-class basics have risen, and debt levels have increased.  But I don't need to present any further argument than the five following charts.  They tell the whole picture.

     So for all those who tell us that the economy is "thriving", I would like to remind them that the super-rich and the poverty-stricken are not the vital elements of a healthy economy.  It is a strong middle class that drives economic growth, and as this class is driven into extinction by policies that are designed to eliminate it, so will go the future of this country.  It's only a matter of time, at the rate we're going.

Psalm 52:6-7   "The righteous shall see and fear, and shall laugh at him, saying, “See the man who would not make God his refuge, but trusted in the abundance of his riches and sought refuge in his own destruction!"

As Goes Detroit, So Goes the Nation

     This is one of those subjects about which I wish I had been wrong.  For several years now, I have been trying to tell acquaintances not to count on their pensions and retirement vehicles.  But we Americans are so trusting in the financial wizards that we've entrusted our futures to, that we believe their empty promises and hear what we want to hear.  (I still laugh to myself when I think back to 2008, and our Edward Jones broker telling us "you need to be in the market for the long haul --- this is America; we will bounce back".

    But back in May of this year, Forbes.com was predicting "We are on the precipice of the greatest retirement crisis in the history of the world. In the decades to come, we will witness millions of elderly Americans, the Baby Boomers and others, slipping into poverty."

     Too many counted on the last three decades of so-called retirement innovations, most notably those promoted by the titans of the pension benefits consulting and mutual fund 401(k) industries.  We now know that 401ks will not provide the retirement security promised to workers.  In fact, Teresa Ghilarducci, a professor of economics at the New School for Social Research, estimates that 75% of Americans nearing retirement in 2010 had less than $30,000 in their retirement accounts.  A serious illness will wipe that out in a single heartbeat.

     As Forbes reported, even if you are among the lucky few that have a pension, you cannot rest assured that it will be there for all the years you’ll need it. Whether you know it or not, someone is busy trying to figure how to screw you out of your pension.

     And now the folks in Detroit are feeling that painful truth.  The civil servants and union members who never thought this day would come, are now finding out what happens when government entities spend too much money and can't keep their promises.  Basically, what happened is this:  the City of Detroit petitioned a Court for protection from their 100,000 creditors and was granted bankruptcy protection by the Judge.  An article on SHTFplan.com reports that unsecured creditors, such as pensioners and bondholders, will receive a $2 billion note for $11.5 billion in estimated debts — in other words, less than 18 cents on the dollar.  

     In essence, that means that the most vulnerable of those owed, the retirees who counted on that pension to see them through their golden years, will be the ones who will suffer the most.  Many of them will see an 80% decrease in the retirement funds they believed they’d receive until they died.  Add the uncertainty of their healthcare situation, due to Obamacare, and the future is looking mighty scary.  They are now facing the terrible truth that the magic spigot of imaginary money has been turned off.

     But when you look past the personal side of this Detroit bankruptcy, you realize that it is only the tip of the iceberg.  First it was Stockton, California; and now Detroit.  Waiting in the wings are East St. Louis, Illinois; Camden, New Jersey; New Orleans, Louisiana and Oakland, California -- all who have seen crime drastically rise as the city police force has been cut in an effort to stave off debt. 

     After the cities, we can expect the states that are in financial trouble to seek their own debt relief through bankruptcy.  And then, of course, there is the big Daddy of them all, our national debt.  We'd better face the reality that the Government will be forced to not only cut retirement benefits promised to federal employees, but will make the case that if they have to give up their retirement funds, you’ll have to give up your 401k, IRA or personal savings.  Think that can't happen?  Think again.... real hard!

     Congressional members have already been talking about a nationalization of America’s retirement funds, and when they are ready to do it they’ll pass the legislation just like they did when they seized 1/6th of our economy by nationalizing health care.  It's the only choice they will have!

     So, like I said at the beginning of this post, I was accused of being on the Crazy Train back in 2008, when I followed the logical progression of our national debt crisis.  Believe me -- I didn't want to be right, and it's not an argument that I wanted to win.  But I'm here to give the same warning I gave five, nearly six years, ago ... our future is not what you thought it was going to be.  Please plan accordingly! Get a second stream of income, stock up on food, and prepare for a rocky future ... Time is running out! That retirement or pension fund, and your 40l(k), are no longer the safety nets you thought they would be.  If the truth be told, retirement is a word that won't exist for many, while poverty may become the new reality.  Start swimming before this wave overtakes you.  You're going to have to save yourself!  

Ecclesiastes 7:10     "Say not, “Why were the former days better than these?” For it is not from wisdom that you ask this."

Fast Food Workers To Strike

     They say that the American public's memory is short-lived; if you've disgraced yourself, just disappear into the shadows for a little while and you can re-emerge with no one the wiser.  Such is the case with the Service Employees International Union ... remember them?  Yes, SEIU is back!
     If you will recall, this labor organization was involved in some pretty shady electioneering efforts during the last presidential campaign.  Furthermore, LaborPains.org reports illegally funneled money from various Locals into the campaign coffers of union-friendly candidates; along with questionable cash withdrawals from bank accounts, lack of documentation for outrageous travel expenses, and lucrative vacation buyouts that were not authorized by union boards.
     So I guess I shouldn't be surprised to see that they are back at it; stirring up trouble and creating havoc among the labor force.  This time they are backing a one-day strike by fast-food employees, who are demanding a $15-an-hour wage.  Union organizers have planned strikes in over 100 cities, including Charleston, South Carolina; Providence, Rhode Island; and Pittsburgh, Pennsylvania.  SEIU is also demanding that restaurants allow workers to unionize without the threat of retaliation.

     Here's the thing .... I am all for a worker getting paid a fair wage for what his work is worth.  Currently, the federal minimum wage is $7.25.  Have these workers given serious thought to the burden that doubling their wage will cause on the fast food industry, and what some of the likely results would be, should that wage be met?  If all fast food workers were paid $15 an hour, can you see that the cost of a meal would necessarily have to rise?  And remember, profit is the name of the game, so it makes sense that fast food restaurants would either consider turning to automation for some of their positions; or be forced to lay off workers, causing fewer employees to carry more of the load.  Kind of defeats the purpose, doesn't it?  Add to this, the fact that Fast Food Industry officials say that only a small percentage of fast-food jobs pay the minimum wage, and that those are largely entry-level jobs for workers under 25.  In other words, you may start out at the bottom, but you can climb the ladder in both pay and positions, just as in other industries.
     I personally know of several young people who started out at the entry level in well-known fast food chains, and through steady and reliable work, it didn't take them long to reach management level which came with a good salary and benefits package.  I guess it's all about your perspective ....
     To give a voice to the backers of this movement, they say that studies show that the average age of fast-food workers is 29 and that more than one-fourth are parents raising children.  Take the story of Simon Rojas, who earns $8.07 an hour working at a McDonald’s in South Central Los Angeles, and who said he would join the one-day strike.
      “It’s very difficult to live off $8.07 an hour,” said Mr. Rojas, 23, noting that he is often assigned just 20 or 25 hours of work a week. “I have to live with my parents. I would like to be able to afford a car and an apartment.”  Mr. Rojas said he had studied for a pharmacy technician’s certificate, but he had been unable to save the $100 needed to apply for a license.
     Now, I don't mean to unfairly question Simon's work ethic; there is likely more to his situation than presented here, but I have a couple of questions.  First of all, at $8.07/hr, it would take less than 12.5 hours to earn that $100.  OK, let's take into account the taxes that would be deducted from his paycheck.... it would still take less than one 20-week paycheck to get the money he needed for that pharmacy tech's license.  He's living at home, with no car expenses... maybe it's me, but that doesn't seem insurmountable.
     Secondly, if Simon is only receiving 20-25 hours a week, what's stopping him from getting a second job?  Doesn't it seem logical that another 20-hour week job would greatly increase his income?  I realize that he won't be buying a fancy car, or renting a penthouse on that salary in the near future, but by taking advantage of living with his parents, his options are actually quite good for taking night classes or going to a technical trade school, which would give him a bright future.
     How many of these fast food workers have set their eyes on a goal beyond working in the fast food industry?  Do they see it as a stepping stone, or do they just want to be paid more to stay at this level?  I am not putting down fast food workers... their job is not easy and it's long hours on your feet.  But I recently met an 18-year-old who was working the cash register at a local Burger King who offered the best customer service I'd seen in a long while.... smile, upbeat attitude, courteous and excellent service.  When I commented on his demeanor, he said, "Yes, ma'am, I plan on being a manager at this location in the next 18 months," and he quoted me a rather generous 5-figure salary that would accompany that position.  He then proudly announced that he would soon thereafter buy his first franchise of several he planned on owning.  I had no doubt that he would reach his lofty goal.  Furthermore, that's the spirit that no union can force at the bargaining table!

Proverbs 16:3    "Commit your work to the Lord, and your plans will be established."

Look What Happens When the Government Spends Less

     At the end of last month, the U.S. Treasury Department that the government has, for the first time in five years, run a budget deficit below $1 trillion.  The deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012.  That’s the smallest imbalance since 2008, when the government ran a $458.6 billion deficit.
     I am not an economist, and maybe I see this whole scenario all wrong .... but it's really very simple to understand ... this deficit is the difference between tax revenue and spending. The deficit for the budget year that ends on September 30th narrowed because spending decreased while tax revenues increased.  Naturally, the White House is eager to take full credit for this decrease in spending.

     “Under President Obama, the nation’s deficit has fallen for the past four years, the fastest pace of decline over a sustained period since World War II. It is now less than half of what it was when the President took office,” said Treasury Secretary Lew. “Congress must build on this progress by crafting a pro-jobs and pro-growth budget agreement that strengthens the economy while maintaining fiscal discipline.”
     “We must remain focused on measures that will support the middle class, strengthen the economic recovery, promote the nation’s long-term competitiveness, strengthen national security, and protect the least fortunate among us,” said Office of Management and Budget (OMB) Director Sylvia Burwell. “The President’s Budget showed how we can do this while at the same time improving our long-term fiscal outlook.” 
     Excuse me??? The President's Budget?  Isn't it a little presumptive to take credit for a decrease in spending, when in fact the deficit had risen $221 billion between 2008 and 2013, the years that Mr. Obama has been in office?
     Now, I don't mind giving credit where credit is due, so let's take a closer look at just what caused this decrease in the federal deficit.  It seems that revenue did indeed jump 13.3 percent to $2.77 trillion.  But why?  Oh, here's our answer ... higher tax rates.
     And, yes, government spending declined 2.4 percent to $3.45 trillion.  Again, one must ask the reason this occurred.  Well, it was, in part, because of the automatic spending cuts that kicked in March 1st (also known as “sequester”).  Hmmm .... wasn't the Administration loudly berating the Sequester; predicting that it would lead to massive layoffs and the cutting of programs that would hurt the poor and the elderly?
     Maybe I am over-simplying the whole process.  But it just seems so obvious:  when you spend less, you owe less, and save more.  At this point, don't we need to take a sober and serious look at how Washington handles the business of the country?  Although I will admit that Sequestration may have limited some valuable programs, and led to unfortunate layoffs; if we are truly honest with ourselves, we would admit that at least some of what we've asked government to do, we are better able to do ourselves.  We have become too reliant on government to take care of us, cradle to grave.
     And the fact that the bloated bureaucracy of the Federal Government would be part of the job layoffs should probably be looked into more closely.  Just how many of those jobs are essential?  Should the American taxpayer be burdened with the cost of paying for health and retirement programs of non-essential workers?
     I want to make it clear that I am thrilled our budget deficit has dropped $1.09 trillion!  But let's not be satisfied with that achievement.  Let us cut deeper and make it possible for American business entrepreneurs to afford their taxes so that they can create more job opportunities, which will result in more taxpayers  --- the American economy and everyone will benefit.  But, I'm sorry to say, that this is just a drop in the bucket, and I'm afraid too little, too late.

Luke 14:28     "For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?"

From the Suburbs to the Trailer Parks

     I am no financial guru, but I ran across an interesting article on ZeroHedge that caught my eye.  Understandably, people (especially the retired) are edgy about their investment dollars.  There is no safe vehicle that guarantees a profitable return.  So consider the following strategy by the third largest private equity firm in the world, who just happens to be noted for its association with influential political figures, such as George H.W. Bush.
     That firm is the Carlyle Group, which is a very successful American-based global asset management firm, specializing in private equity, and based in Washington, D.C.  The Carlyle Group operates in four business areas: private equity, real assets, market strategies, and fund of funds.  OK, I'll admit that I don't really understand what all that means, so after a little research, I dumbed it down for myself, so I could try to explain it to you.
     Private equity - In finance, private equity is an asset class consisting of equity securities and debt in operating companies that are not publicly traded on a stock exchange.
     Real assets - This is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; in short, real estate.
     Market strategies - I believe this can be summed up by saying that asset management firms invest in a diverse range of markets and use a wide variety of investment styles and financial instruments to gain the most bang for their investor's buck.
     Fund of funds - This is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities.  It makes sense that this would increase the diversity of investments.

     So why is any of this information important to us?  Because the Carlyle Group has decided it was time to exit the suddenly extremely crowded “buy-to rent” residential real estate market, and focus their investments in areas such as senior housing, self-storage units and manufactured homes.  Just this week, the Wall Street Journal reported that the investment firm has added "Trailer Parks" to its diverse portfolio.
     Are you reading between the lines here?  In fact, the Carlyle Group recently struck a $30.8 billion deal, in which they bought two trailer park communities in Florida.  Analysts said the deal is evidence that big investors are betting that the demand for low-cost manufactured housing, the latest generation of trailers or mobile homes, will rise as other housing alternatives become too expensive for a number of Americans, especially senior citizens.  The industry spin is that it is a good investment because landlords like the steady income stream—tenants tend to stay put, especially retirees—and the low maintenance costs are attractive.
     But perhaps the truth behind the Carlyle Group's move into this new investment market is that the Baby Boomer Generation, which is beginning to retire (some forcibly), can no longer afford their lifestyles of the past due to poor return on their investments.  When you consider increased medical costs (including health insurance), increased property taxes, and inflated food prices, it will become more difficult to make it on a retiree's income.  That means downsizing from their current homes to a less expensive residence.
     So do the investment "specialists" in D.C. anticipate that our seniors are going to experience a decline in their value of living?  Are they betting on it, with this new direction in investment strategy?  It sure doesn't give me much confidence that the future is going to be looking up.  I'd feel a whole lot better if Papa Bush thought the next trend was in free market venture capitalism.

Luke 14:28      "For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?"

A Sign Of The End?

     I remember when the reality of our nation's decline was sinking in during the bailouts of 2008.  People began waking up to the possibility that America was in serious trouble and we might be headed toward an irreversible crash.
     "Prepping" came into vogue, and at the same time, Americans began rediscovering just what our Constitution meant to us.  Those of us who were out ahead of the curve took steps to gain more knowledge about things our ancestors took for granted, and we actually began visualizing a quite different future for America than our friends and neighbors who were still focused on the latest version of the iPhone.
     We began listening to economists who were outside the Wall Street institutions, and who predicted various signposts that might possibly forecast an imminent collapse.  It might have simply been a convenient symbol of our culture, but Wal-Mart was always used as the indicator.  And wouldn't you know it ... Wal-Mart just played a significant role in the economic news of our nation.
     It wasn't quite the TEOTWAWKI scenario that has been commonly accepted as the tip-off to collapse; this weekend's incidents fell just short of rioting at the local Wal-Mart as angry, starving hordes salvaged for food.  Notice, I said just short ....

     Over the weekend, the Electronic Benefits Transfer system (that's a nice way of saying food stamps) crashed.  The "official" statement from Xerox, the company that runs the system for 17 states, was, you guessed it .... technical difficulties.  Xerox rushed to assure folks that it had nothing to do with the government shutdown.  (I personally would not be surprised if there weren't some secret emails emanating from DC that encouraged "a little pain" among the recipients.  Why not?  Politicians have caused pain at the War Memorials and the State Parks.  EBT recipients are a logical choice for the next "nudge".)
     With the unexpected crash, we witnessed another example of the moral decline and utter dependency of our citizens.  In Georgia, frantic consumers left full shopping carts in the aisles when they discovered their EBT cards weren't working.  As a result of their full reliance on the government, these people were rendered helpless, weak and vulnerable when they couldn't get their free food.  Yet they all owned phones on which they could tweet and facebook their consternation at being denied what they feel entitled to .... I got kids to feed!  Just because the government is shut down, my kids are supposed to go hungry?
     Are you as amazed as I am that these people have no other means by which to feed their families?  Luckily for them, the computer glitch was corrected within a few hours and their taxpayer subsidized shopping could continue.  But what would have happened if that couple of hours had turned into a couple of days, or a couple of months?  Would they still be standing around bemoaning the failure of the government?  Personal responsibility is a fading character trait among this segment of society!
     Then there was the different EBT experience in Louisiana.  In this case, the greed of the underprivileged was prominently on display.  For some reason, Wal-Mart cashiers discovered that there were no limits on the EBT cards of consumers.  After calling corporate headquarters, cashiers were told to honor the purchases anyway.  So you can imagine the chaos and avarice as shoppers loaded up their carts with food they were not entitled to.  Did even one single person consider who would be paying for the hundreds of dollars of food they were indulging for themselves?  Did they think it just came from some "secret stash" in DC?
     And to make matters worse, once the cards came back online a couple of hours later, and the consumers knew their purchases wouldn't be honored, they just left stacked and loaded carts sitting in the aisles.  You can't convince me those people didn't know that this was fundamentally wrong!  They are aware of how much, down to the penny, are on those cards and when they are due to receive their monthly allocation.  One woman had $700 worth of food, and when she arrived at the checkout stand, she was angry to discover that the glitch had been corrected and her purchases would not be allowed .... even though she only had 49 cents on her card!
     Although these scenes might not be the precise sign that tips the scales toward complete economic collapse, they are close enough to signal the immoral and debased state of our society.  Temporary computer malfunctions resulting in both deprivation and gluttony, and then evolving into similar events involving unruly crowds and social disorder should make us sit up and take notice.  It won't take much more to fulfill "the Wal-Mart prophecy", and I'm afraid we don't have much longer until we witness the manufactured and desired chaos that marks our final slide.  This was just a test.

Philippians 3:19    "Their end is destruction, their god is their belly, and they glory in their shame, with minds set on earthly things." 

Alert: The Middle Class Is Hurting!

     OK, I know I promised that I would take a real vacation, but I just can't help sharing with you some things that I am seeing as we travel across this great land of ours.  First of all, you must know that I am an avid people observer ... not just people watcher, but I love to take note of their opinions, their actions, and above all else, their thoughts about the future.
     PLW and I have some very good friends who are always a "must-see" whenever we travel.  They were young-marrieds that we met when we all worked for one of the big three insurance companies in America.  We have watched them grow into middle-aged parents with four beautiful girls; and we have watched them work hard to achieve "the American dream".
     Well, in a private moment, Mrs. B shared with me how financially strapped they are.  Their oldest daughter is preparing to attend a major university next year, with her sister following a couple years behind her.  The two youngest will be several years behind that.  Of course, that kind of obligation would be enough to keep anyone up at night.

     But that wasn't even her point.  Her husband has risen to a respectable middle-management position in his company; he has paid his dues and climbed the ladder.  My friend said that Mr. B had put pen to paper a few weeks before and was shocked when he came to this realization:  in the last 5 years, while his salary has grown, his bonuses have declined.  This has resulted in the fact that his yearly salary in 2013 will be $1000 less than it was in 2008.  That's a big deal when prices are going up across the board in everything!
     I noticed that they are cutting back on all the niceties that they used to enjoy .... eating out is curtailed; they now use skim milk in their morning coffee instead of the fancy coffee additives;  they no longer trade their car in when it gets over 70,000 miles; and budget cutting is taking place at the grocery store, TV cable channels, higher insurance deductibles, and anywhere else they can save a dime.
     Seeing and hearing that this average, normal, middle-class American family is beginning to be alarmed over their future made me clearly see a dynamic that I fear is sweeping the land.  The Upper Class is still feeling no pain.  They can absorb the higher prices easily, and are still able to enjoy their second homes and their luxury items.  A slight hiccup in their yearly income just means they take three extravagant vacations a year, instead of four.
     The Lower Class is still groovin' along.  The entitlements are still there and, in fact, they are promised even more in the future ... free healthcare!  They have nothing to worry about.  The Nanny State is going to take care of all their needs.  No job?  They don't need one!  And let's be honest --- they don't want one!  All this good livin' would disappear and they'd have to take care of themselves.  Who would want to do that?
     No, it's the Middle Class that is hurting and will ultimately pay the price for all our folly.  But then we know that's the ultimate goal, right?  Hasn't that been the objective of every major regime that sought extreme power over the people?  Get rid of the Middle Class.  The Elites gain control, destroy the Middle Class and push everyone to the bottom.  When the masses are all pushed into the Lower Class, look how easy it is to manage them!  Didn't they do that in the Russian Revolution?  And what about China?  Guess there's no mistaking the purpose behind "Top Down, Bottom Up" is there?  Pretty good strategy, if you can pull it off.
     And from what I am seeing as I travel across this land, the strategy is beginning to work.  It may not be "in your face" obvious yet, but I would be willing to bet that there are more and more Middle Class households across America experiencing the same realizations that our friends, Mr. and Mrs. B, are facing .... our future is looking dimmer.   As this becomes the recurring testimony across the American Middle Class, we will know that America's shining beacon is being systematically dismantled.  We don't have much time to save her!

John 16:33   "I have said these things to you, that in me you may have peace. In the world you will have tribulation. But take heart; I have overcome the world."
     
   

Does Anyone Honor Their Labor Anymore?

      Today marks a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.   But I am asking myself if anyone truly knows the deeper meaning behind an honest day's work?  Does Labor Day have any real significance when so many have joined the ranks of the unemployed?  With over 47,000,000 Americans choosing a welfare card over a paycheck, have we lost the value of work?
     I would like to explore a quote from one of Dr. Martin Luther King's sermons which I believe sums up how we should approach our jobs.  He said, "Even if it falls your lot to be a street sweeper, go on out and sweep streets like Michelangelo painted pictures; sweep streets like Handel and Beethoven composed music; sweep streets like Shakespeare wrote poetry… We need more people who are competent in all areas and always remember that the important thing is to do a good job. No matter what it is. Whatever you are doing consider it as something having cosmic significance, as it is a part of the uplifting of humanity. No matter what it is, no matter how small you think it is, do it right. As someone said, do it so well that the living, dead, or the unborn could do it no better."
     You see, we are in danger of no longer appreciating a hard day's work, regardless of what the world thinks of us, or how much money we make.  Instead, we tend to glorify what brings us recognition and social status; only pursuing work or employment that enhances our reputation or our bank account.
     Dr. King admonishes us to approach our daily tasks with enthusiasm and passion -- no matter how insignificant or trivial someone else may find it.  Because it is not the title on our resumé that matters, it is how well we do the job.  The successful in life always approach their vocation with this attitude:  Whatever needs to be done, I am willing to do it .... and I will finish my assignment beyond all expectations.   They are not so self-important that they refuse to do jobs "beneath" themselves; nor do they have their own glory in mind.
     Not just the individual, but all of society benefits when we have a workforce that makes "excellence" their motto; when employees are not seeking "instant" rewards and look at what they can contribute instead of what they can get.  With this change of attitude, I might concede that we deserve a day of rest and leisure from our honest toils.  Until then, we're probably looking at more strikes by fast-food workers who think they deserve double their salary for working half the hours.  Of course, it's going to take a major change of attitude and policies on the part of our national leaders as well.  In fact, they could spend a little more time "working" for us, don't you think?

Genesis 2:15   "The Lord God took the man and put him in the garden of Eden to work it and keep it."

  
   

The Truth About The Economy

    Last week I published my 500th post, and look how far we've come down this path since the first day I decided to share my thoughts!  I want to thank everyone who encourages me to continue writing, and I want you to know that I am honored that you give a small part of each day to consider my opinions.  I am no different than you, and we are all concerned about the state of our country and the world.  It amazes me that readers from all over the world tune in to this small blog; I have no power and no real influence.  But to know that even one person from China, Pakistan, Ukraine, Latvia, Poland, many other countries, or my beloved United States receives a glimpse of how the Lord is working in my life, is very humbling.  Thank you for sharing your time and your comments.  On towards the next 500 posts!

   Until the last few days, the Mainstream Media would have you feeling pretty good about the state of our economy.  The stock market has been up; the unemployment rate is falling; retail sales are increasing; and the dollar is getting stronger.  The MSM has been extremely optimistic about our future!

     But with the recent events in Boston and Texas, the stock market is taking a dive.  These are only distractions, as are the losses in the paper market for gold and silver.  And if you listen to the media puppets, the days of gold as a viable hedge are over.  (However, bullion sellers are reporting a sharp incline in sales).  I'd love to tell you that I'm buying into their misleading mumbo jumbo.  But you see I don't really believe anything they're forecasting right now; nothing makes sense!
     Money is fleeing Europe into the U.S. dollar, because there is nowhere else to go; but that will most likely be temporary.  And the gold sell-off is happening in Europe to cover debts; and in the U.S. to cover margin calls on a panicked Wall Street.  I wouldn't be surprised to see the stock market climb again in the next day or so.
     But all this shouldn't cause us to take our eye off the massive national debt.  I will confess that I don't understand how the facts and figures are being manipulated; I just know that our economy -- and the world's -- is far from healthy.
     The signs are everywhere:  Bitcoin, the online digital currency, was supposedly safe from governmental interference; yet it is crashing.  Besides the plunging prices for commodities like gold and silver, the price for oil and the demand for energy is declining, as well.  Just look at the collapsing markets in Europe and the lack of consumer confidence here at home, and you get a pretty accurate picture of failing economies.
     Various economic sources say it feels eerily like 2008, when we felt like "something bad was coming."  And since our economy is becoming increasingly intertwined in a One World Economy, we have to take into consideration how the economies of other countries affects ours.  While the indicators I've already mentioned appear to be forecasting a gloomy financial picture, there are also other signals that all is not rosy in the land of economics.
     Retirement Accounts.  According to Wells Fargo, the number of Americans taking loans from their 401(k) accounts has risen by 28 percent over the past year.  "Of the participants who took out loans, the greatest percentage were to people in their 50s (34.2%), followed by those in their 60s (28.9%) and then by those in their 40s (27.3%). The increase among participants in their 50s was nearly double the increase among those under 30."
     It's not hard to figure out why.  Rising costs of food, health care and property taxes make it difficult for people to live within their means.  The worry is that by the time these folks actually retire, there won't be anything left.
     Casino spending is one of the most reliable indicators about the overall health of the economy.  Interestingly enough, casino spending crashed during the last financial crisis as well.  That is why it is so alarming that casino spending is now back to levels that have not been seen since the last recession.
     Employment numbers in Greece.  Over in Europe, things just continue to get worse.  According to numbers that were just released, the unemployment rate in Greece has soared to 27.2 percent, which was up from 25.7 percent the previous month.  That means that the unemployment rate in Greece rose by 1.5 percent in just a single month.  That is not just a crash - that is an avalanche of unemployment.
     European Finances.  European financial stocks have been hit particularly hard lately.  And for good reason actually -- most of the major banks in Europe are essentially insolvent at this point -- hence, the selling of gold reserves.  This week, European financial stocks fell to seven month lows, and this is probably only just the beginning.
     The Cyprus Situation.  This is the most frightening for me.  It can't be a good sign when a country's solution to its financial problems is to confiscate the private money of its citizens.  Couple this alarm with the number of Spanish companies going bankrupt rising by 45 percent over the past year, and you begin to wonder if these are the beginning of a domino effect.

     Demand For Energy.  Just like we saw back in 2008, the overall demand for energy in the United States is falling rapidly.  When people's incomes and savings decline, so does their use of energy.  They  curtail their driving and gasoline usage, and alter their thermostat temperatures.          While the environmentalists think it is good for people to use a bit less energy, it is also a clear indication that economic activity is really starting to slow down.
     So now, I have just one question .... with all these indicators of stressed domestic and international economies, why have the Dow and the S&P 500 been setting new record highs?  It just doesn't make any sense!  And why would you put your confidence in something that goes against all the economic fundamentals?  Any Economics 101 student can tell you that the stock market is not functioning in reality.
     In an interview on CNBC's Squawk Box, Economist Marc Faber said, "If [the stock market] continues to move up, the probability of a crash becomes higher."  He also said, "It could happen sometime in the second half of this year."  But the rest of the MSM talking heads want you to think that this stock market bubble can go on indefinitely.  But as other more level-headed economists have pointed out, isn't a bubble always biggest right before it bursts?
     Unfortunately, a great percentage of Americans choose to listen to those who lull them into a false sense of security.  A recent CNN poll claims that Americans are now more optimistic than they have been in six years.  Somehow, I can't help but see these folks as walking in the shadow of those people who refused to listen to Noah.... and then the rains came.

Psalm 52:6-7      The righteous shall see and fear, and shall laugh at him, saying, “See the man who would not make God his refuge, but trusted in the abundance of his riches and sought refuge in his own destruction!”

Watching Our Pennies

     The situation in Cyprus does not bode well for the rest of the world.  I'm not a financial wizard, but I'm smart enough to know that what happened to the citizens on this Eastern Mediterranean island could happen anywhere in this global economy.  Each troubled economy has their own problems and point of origins, but this unique solution could be applied across the board.
     Here's Cyprus's story:  their failing economy required a bailout from the EU, (just another in a long line), but the consequences of this one held some foreboding news for unsuspecting Cypriots.  Over the weekend, a bank holiday was declared, and the good people of Cyprus woke up Monday morning to find out that the government had seized up to 10% of everyone's savings from their bank accounts ... without warning.  Bank deposit holders had no idea they would be footing part of the bill.  Panic ensued, there was a run on ATMs, and those funds were quickly depleted by mid-afternoon.

     But there could be an even more mysterious reason behind this particular resolution.  According to The Guardian, it seems "there is a lot of Russian money in Cyprus, much of it from somewhat dubious sources. With the richer countries of the eurozone suffering from bail-out fatigue, there was resistance – particularly in Germany – to the idea that ordinary European taxpayers should be writing blank checks to Russian oligarchs who might have been using Cyprus as a money laundering destination.".  Whoa!  Is there more to this story than meets the eye?
     According to an interview with Jim Sinclair, founder of The Sinclair Group (1977), and a respected precious metals specialist, as well as a commodities and foreign currency trader, this Russian money could be ex-KGB money!  To say that taking Russian money is a foolish idea is over-simplifying; but when you couple it with using Cyprus as the test model for bank account confiscation, you have a dangerous mix that is going to obviously explode.  Never mind the fact that normal everyday citizens are being hurt in the process, but now they must pay the price for the immoral business decisions of their banking officials, who, by the way, operated with the full approval of their government!  That seems to be a universal practice of all corrupt governments, doesn't it?
      On the one hand, you have the Russian problem.  But is this also a foreshadowing of a solution other failed economies could utilize?  Will bank holidays and purloined deposits become a matter of policy for determining how other bailouts will be paid back?  And will the citizens of other troubled countries fear the same type of confiscation, and cause a global run on the banks?  People in Cyprus are protesting in the streets, and there's no end to the fear and anxiety.  Calling the theft of private funds a "tax" doesn't alleviate the hostility or rage towards the government.
     But don't think that just because we are an ocean away, we don't face the possibility of similar "solutions".  In an article on KingWorldNews.com, Former Assistant of the US Treasury, Dr. Paul Craig Roberts, reported that our very own J.P. Morgan "now threatens the stability of the entire global financial system.  And if the Fed loses control and we collapse, Nothing and no one would be safe anywhere.”  Well, that's going to help me sleep tonight!
     Dr. Roberts points out that the Student Loan problem in this country is a huge bubble ready to pop; and when it does, it stands to devastate our banking industry.  Combine that with the fact that we are an import-dependent country.  He states that we no longer produce our own manufactured products, clothes, or shoes anymore.  And these import items dwarf the import of oil or energy!  So the potential for what happens when these bubbles burst is widespread unemployment, and a rapid increase in inflation, and needless to say, we don't have an effective economic policy in place to deal with this kind of crisis!  We've heard this talk of economic gloom and doom for some time now, but the advent of the recent Bank Holiday adds a whole new level of trepidation.
     That's why what happened in Cyprus over the weekend could be a warning sign for troubled economies around the world.  If you think your bank accounts, money market funds, retirement plans, IRAs, mutual funds or stock market portfolios are ‘safe’ assets just because they've been recommended by your financial adviser, then in the words of SHTFPlan, you are "playing Russian roulette."  That seems to be what the government of Cyprus did, and look where it got them!

  Isaiah 56:11-12      Yes, they are greedy dog which never have enough. And they are shepherds who cannot understand; they all look to their own way, every one for his own gain, from his own territory.  “Come,” one says, “I will bring wine, and we will fill ourselves with intoxicating drink; tomorrow will be as today, and much more abundant.
   

What Sequestration Will Mean For Our National Defense

     It's time to have a serious discussion about Sequestration.  First of all, we need to be on the same page as to exactly what this term means.  MoneyWatch gives the simplest explanation I have heard:  Sequestration is the fiscal policy procedure adopted by Congress to deal with the federal budget deficit; an "automatic" form of spending cutback.
     And here is how it came about:  The Budget Control Act of 2011 (BCA) established a 12 member Joint Select Committee on Deficit Reduction  (or “super committee”)  charged with reducing the deficit by an additional $1.2 - $1.5 trillion over ten years. The BCA also included a sequestration hammer should the super committee fail, a provision intended to “force” the super committee to act.
     Guess what?  They failed.  So, as mandated in the BCA, sequestration was triggered when the super committee failed to reach an agreement. Sequestration generates automatic cuts for each of nine years, 2013-2021, totaling $1.2 trillion. Sequestration was originally scheduled to take effect on Jan. 2, 2013. However, it was delayed for two months - until March 1, 2013, by the deal struck on New Year's Eve, called the American Taxpayer Relief Act of 2012.
     Since Congress failed to act to stop sequestration, we are looking at the first round of cuts to take place on March 1st.  You might think automatic spending cuts are the way to go if Congress can't do their job and reduce the deficit.  If that's what it takes.....

          But here is the downside: the 2013 cuts apply to “discretionary” spending and are divided between reductions to defense ($500 billion) and non-defense ($700 billion).  Now you might not immediately see the ramifications of this split, but let me put it to you in simple-to-understand language .... nearly half of the budget cuts are at the expense of the military.  And not only will these spending cuts cripple the proficiency of our military; but with the socio-political state of the world, can we afford the effects of such a reduction to our defense capabilities?
     Consider this.  There are many factors of our military preparedness and readiness that will be affected by these drastic cuts.  Think about Military Intelligence.  It is part of the Defense budget scheduled for cuts.  With the troops that we still have stationed in Afghanistan and Iraq, along with Benghazi-style attacks, Intelligence is important in keeping our troops safe and effective.  On top of that, deployments may be extended, adding an even heavier burden to our exhausted troops.
     With the impending budget cuts in view, Defense contractors have begun layoffs, which can only mean that our troops will pay the price with a lack of equipment and supplies.  The U.S. Navy has announced plans to reduce the number of ships in its fleet from 285 to 235 over the next 10 years.  Don't you think that is welcome news to our enemies and a source of consternation to our allies?
     I don't see how anyone can refuse to see that the world is becoming increasingly dangerous.  We see  chaos and war throughout the Middle East; Syria and Egypt are on fire; and Jordan, Libya, Yemen and Turkey are smoldering.  We have nuclear threats from Iran and North Korea, Russia rattling their sabres, and Africa becoming the new radical Islamic playground.  And let's not forget China and the threat it imposes! So why in the hell are we talking about disarming our nuclear arsenal and dismantling our fighting force?
     A Heritage Foundation blog pointed out this interesting fact:  "When President Eisenhower coined the phrase, “the military-industrial complex” in 1961, 51 cents of every dollar spent by the federal government was spent on defense, while 37 cents of every dollar spent by the federal government was spent on domestic programs. Today, less than 20 cents of every dollar spent by the federal government is spent on defense, while more than 70 cents of every dollar spent by the federal government is spent on domestic programs."
     I will agree that we need to strike a balance between defense and domestic spending.  A bloated military-industrial complex is not good for the country either, because that monster has to be fed.  And unnecessary wars and the loss of our best and brightest are not worth the cost.  But these figures now reveal that 3.5 times of the Federal Budget is spent on entitlement programs and "Departments", rather than on strengthening and maintaining the defense of this country.   Now tell me, just what have Food Stamps, Medicaid, Medicare, and the Departments of Education, Energy, Agriculture and Labor done to secure our freedoms?  Have any one of these "distribution" programs or swollen bureaucratic systems contributed to the protection or security of your family?
     Our national security is at risk!  While we disembowel the finest military on the face of the earth, our enemies grow in strength, capability and courage.  Why would they not see us as weak and potentially defenseless?  We are gambling with our future!  Sequestration sets us on the road towards destruction; and who, in DC, will stand for our brave troops, safeguard our homeland, and defend the stature and respect of the United States?  This is a disgrace!

Psalm 89:42-44     "You have exalted the right hand of his foes; you have made all his enemies rejoice.  Indeed, you have turned back the edge of his sword and have not supported him in battle.  You have put an end to his splendor and cast his throne to the ground. "