Monday , 20 November 2017


What's Coming: A "Fiscal Meat Grinder," A "Fiscal Cliff" and a Potential "Major Market Meltdown"!

The International Monetary Fund, the U.S. Congressional Budget Office, the National Association of Manufacturers and many other authorities are now warning that with the largest tax increase in U.S. history — plus the largest government spending cuts our nation has ever seen – one of the deadliest financial crises in U.S. history is set to strike the U.S. economy beginning this coming New Year’s Day. Barring a miracle in Washington…..

  • America will fall “head first into the fiscal meat grinder (JP Morgan),
  • cause America to plunge off of the “fiscal cliff” (Bernanke) and possibly
  • suffer a “major market meltdown” (former Obama Treasury official Steven Rattner)
  • tearing hundreds of billions of dollars out of the hands of U.S. consumers and companies,
  • destroying thousands of businesses and
  • vaporizing millions more jobs in every sector of the economy
  • bursting Wall Street’s stock market bubble,
  • gutting the life savings of millions of Americans.

 

So says Martin Weiss (www.moneyandmarkets.com) in edited excerpts from his original article.*

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Weiss goes on to say, in part:

If you think this presidential election is routine or if you believe this political season is a time for investing as usual you’d better wake up and smell the coffee because a well-known, but rarely debated, financial monster is about emerge from the sidelines and explode into the forefront of the race for the White House. I’m talking about the most dangerous and destructive flood of fiscal red ink in the history of mankind -America’s gargantuan federal deficits.

In the current election cycle, even after adjusting for inflation and measuring it in proportion to the nation’s GDP, this monster is massive – MANY times larger than during prior presidential elections. It is:

  • nearly THREE times bigger than it was just four years ago when Barack Obama defeated John McCain.
  • over SIX times worse than it was in 1996, when Bill Clinton defeated Bob Dole, and
  • almost TEN times larger than in 1964 when Lyndon Johnson beat Barry Goldwater.
deficit chart

There’s no way a monster this big can be covered up or buried in a presidential election campaign. In fact, it’s already pervading virtually every debate. Every time they talk about

  • Medicare reform,
  • Social Security,
  • personal tax returns or
  • extended unemployment benefits,

it all ties back to the deficit – a deficit which has been a record $1 trillion or more for THREE consecutive years, with no end in sight – DESPITE some improvements in the economy since 2009. If the economy sinks back into deep recession, tax revenues will shrink and the deficit could DOUBLE in size.

For the first time in modern history Washington’s debt load has crossed a dangerous threshold of more than 100% of GDP!

US debt

 

 

 

 

Each year that Washington runs a deficit, it must borrow more money to finance the gap so, with each year of red ink, the government’s pile of debts gets bigger and bigger. Until now, the official tally of U.S. government debts was at least SMALLER than the size of the U.S. economy but this year, U.S. government debt is growing LARGER than the entire U.S. economy. This is a critical threshold for any country and we are in the process of crossing it right now! The sorry facts are very straightforward:

  • The U.S. economy is expected to clock in at around $15.6 trillion in GDP. Meanwhile …
  • The government’s debt load (excluding Medicare, Social Security, etc.) is going to be $16.3 trillion.

The above means that:

  • even if we gathered up all the income of every citizen, resident or company in the U.S for the ENTIRE year, and
  • even if we could use EVERY penny of that income to pay back the U.S. government’s creditors,

we would still be left with a pile of unpaid debts!

Washington will owe about $1.05 in debt for every dollar of products and services produced by every local government, company or individual in the USA! These facts should be setting off major alarm bells around the world. They mean that:

  • The United States of America is at an historic threshold, beyond which global investors are prone to panic and start dumping U.S. debts.
  • The United States is passing the point of no return, beyond which any new government initiative to “end the crisis” will probably just make it worse…
[All this is] a political landmine because the deficit and debt monster are nonpartisan! They were created by both Democrats and Republicans. They can wreak havoc on any presidential campaign or president, regardless of party affiliation and, most importantly, ANY so-called solution — whether proposed by Democrats or Republicans — is likely to backfire.

Why? Consider the alternatives:

  • If Washington lets government spending continue to grow, the deficit naturally gets bigger. But …
  • Even if Washington cuts spending, it can’t solve the problem any time soon! Just as in Spain and Greece, the cuts merely help sink the economy, producing much larger deficits anyhow.

As you can see, the deficit and debts are going to have a far bigger impact on politics and the economy than ever before… Although this historic deadline — January 1, 2013 — is still weeks away, it is already having a profound effect on the U.S. economy:

  • CNBC recently reported that corporate America is on hold — cutting hiring and expansion plans. And most are even refusing to provide any earnings guidance on conference calls — all due to the massive dangers this great fiscal cliff poses for them.
  • At the same time, millions of investors are frozen in fear, refusing to buy or sell anything until they get a clearer picture of how this unprecedented new crisis will impact the markets.

While these and other authorities are issuing warning after warning, they are not telling YOU what you should be doing right now to protect your wealth. My team and I are changing that…[Visit my site to learn how.]

HAVE YOU SIGNED UP YET?
  • Go here to receive Your Daily Intelligence Report with links to the latest articles posted on munKNEE.com.
  • It’s FREE and includes an “easy unsubscribe feature” should you decide to do so at any time.
  • Join the crowd! 100,000 articles are read monthly at munKNEE.com.
  • Only the most informative articles are posted, in edited form, to give you a fast and easy read. Don’t miss out. Get all newly posted articles automatically delivered to your inbox. Sign up here.
  • All articles are also available on TWITTER and FACEBOOK

*http://www.moneyandmarkets.com/big-surprise-dead-ahead-in-race-for-white-house-50315

Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Related Articles:

1. Is TEOTWAWKI Imminent – Or Will It Be Deferred?

crisis

For those who didn’t get the memo, TEOTWAWKI stands for “the end of the world as we know it” and that is what David Korowicz predicts – a disaster of unprecedented proportions sometime this decade – an “ultimate” crash that will be irreversible – that will be TEOTWAWKI! Words: 1395

2. Abby Joseph Cohen: The State of the World Economy and Investment Environment in 90 Slides

world map

Goldman Sachs investment strategist Abby Joseph Cohen’s massive presentation on the state of the world economy and investment environment looks at the state of several key economic and financial market metrics in key countries around the world and discusses her outlook for the rest of 2012 and beyond.

3. Are Preparations Being Made For Worldwide Financial Collapse?

global_economic_crisis

Something really strange appears to be happening. All over the globe, governments and big banks are acting as if they are anticipating an imminent financial collapse. Here’s some of what is being said and is apparently happening. Words: 1200

4. Don’t Ignore the Coming Financial Storm – It IS Coming and Here’s How to Get Prepared

head-in-the-sand

Many people refer to me as a “doom and gloomer” because I run a website called “The Economic Collapse”. [Just because] I am constantly pointing out that the entire world is heading for a complete and total financial nightmare, [however,] I don’t think that it does any good to stick your head in the sand. I believe that there is hope in understanding what is happening and I believe that there is hope in getting prepared. [This article does just that.] Words: 2432

5. Nothing Can Be Done to Avoid Coming World-wide Depression! Here’s Why

Capture(74)

Governments everywhere are becoming more distressed and desperate as economic realities dominate the political doublespeak. The world is at a dangerous point. Much of what we thought we knew and assumed regarding governmental behavior and economics is beginning to be reassessed. Governments of the world are out of money and out of ideas. The ponzi scam that has been perpetrated for over fifty years is collapsing under its own weight. There are not enough suckers and capital left to sustain the fraud. [Let me explain further.] Words: 999

6. The Ultimate Fear Mongering Video – or the Ultimate in Insights, Forecasting & Sound Advice? You Be the Judge

global-financial-crisis

Warning: New evidence points toward an imminent financial collapse and the destruction of American wealth. Income, investments, retirement, and even personal safety are now at severe risk. In this new video I lay it all out for you. Words: 515

7. Regardless of Who Wins in November the U.S. Is Going Over the Financial Cliff! It’s Just a Matter of Time – Here’s Why

financial cliff

The outcome of the election of 2012 will [only] determine the rate of speed at which we approach the [financial] cliff [because] neither political alternative is willing to change course, to steer away from the cliff. The cliff is so high that whether we go over it at 200 mph (Obama) or whether we merely slip over the edge (Romney), the end result is the same — fatal for the economy and perhaps our entire political system. It is the fall that will kill us. [This article explains why that is going to be the case.] Words: 1135

8. U.S Likely to Hit the Financial Wall by 2017! Here’s Why

3b4cb322448cb9ca543ce1064c56

The deficits aren’t going to stop anytime soon. The debt mountain will keep growing…Obviously, the debt can’t keep growing faster than the economy forever, but the people in charge do seem determined to find out just how far they can push things….The only way for the politicians to buy time will be through price inflation, to reduce the real burden of the debt, and whether they admit it or not, inflation is what they will be praying for….[and] the Federal Reserve will hear their prayer. When will the economy reach the wall toward which it is headed? Not soon, I believe, but in the meantime there will be plenty of excitement. [Let me explain what I expect to unfold.] Words: 1833

9. This Will NOT End Well – Enjoy It While It Lasts – Here’s Why

Capture(74)

…The US Government and its catastrophic fiscal morass are now viewed by the world as a ‘safe haven’. This would easily qualify for a comedy shtick if it weren’t so serious….[but] the establishment is thrilled with these developments because it helps maintain the status quo of the dollar standard era. However, there are some serious ramifications that few are paying attention to and are getting almost zero coverage from traditional media. [Let me explain what they are.] Words: 1150

10. Events Accelerating Towards an Ultimate Dollar Catastrophe! Here’s Why

economic-collapse

With the U.S. election just months off, political pressures will mount to favor fiscal stimulus measures instead of restraint. Such action can only accelerate higher domestic inflation and intensified dollar debasement culminating in a Great Collapse – a hyperinflationary great depression – by 2014. [Let me explain why that is the inevitable outcome.] Words: 2766

11. Major Inflation is Inescapable and the Forerunner of an Unavoidable Depression – Here’s Why

dollar down drain

Whether our current economic crisis will end with massive inflation or in a deflationary spiral (ultimately, either one results in a Depression) is more than an academic one. It is the single most important variable for near and intermediate term investing success. It is also important in regard to taking actions which can prepare and protect you and your family. [Here is my assessment of what the future outcome will likely be and why.] Words: 1441

12. An Inflation Inferno is Expected – but When?

inflation

Daniel Thorn­ton, an econ­o­mist at the Federal Reserve Bank of St. Louis, argues that the Fed’s pol­icy of pro­vid­ing liq­uid­ity has “enor­mous poten­tial to increase the money sup­ply,” result­ing in what The Wall Street Journal’s Real Time Eco­nom­ics blog calls “an infla­tion inferno.” [Personally,] I think it’s too soon to make sig­nif­i­cant changes to a port­fo­lio based on infla­tion fears. Here’s why. Words: 550

13. Major Price Inflation Is Coming – It’s Just a Matter of Time! Here’s Why

inflation

The developed economies of the world have opened the money spigots…[and this] massive money and credit creation is sitting in the banking system like dry tinder just waiting for a spark to set it ablaze. How quickly it happens is anyone’s guess, but once it does we are likely to be enveloped in a worldwide inflation unlike anything before ever witnessed. [Let me explain further.] Words: 625

14. 2012: More Money-printing Leading to Accelerating Inflation, Rising Interest Rates & Then U.S. Debt Crisis! Got Gold?

inflation

Evidence shows that the U.S. money supply trend is in the early stages of hyperbolic growth coupled with a similar move in the price of gold. All sign point to a further escalation of money-printing in 2012…followed by unexpected and accelerating price inflation, followed by a rise in nominal interest rates that will bring a sovereign debt crisis for the U. S. dollar with it as the cost of borrowing for the government escalates…[Let me show you the evidence.] Words: 660

15. Current Distortion of Interest Rates is Unsustainable & Will Have Dire Consequences

Interest-Rates

Interest rates have been manipulated to keep them extremely low in an attempt to stimulate the economy but…unless deficits are dramatically reduced…. interest rates will eventually rise and government interest expense will double or triple from the amounts being paid today. That potentially triggers a debt death spiral, where government has to borrow more than otherwise expected. It also raises the credit risk and could ratchet interest rates up again. It has happened to Greece, Portugal, Spain and other European countries already this year and could well happen in the U.S. too. Words: 595

16. Eventual Rise in Interest Rates Will Be Downfall of U.S. – Here’s Why

Interest-Rates

Everyone who purchases a Treasury bond is purchasing a depreciating asset. Moreover, the capital risk of investing in Treasuries is very high. The low interest rate means that the price paid for the bond is very high. A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign. The question is: when is sooner or later? The purpose of this article is to examine that question. Words: 2600

17. Oh My GAWD! This Infographic on US Debt Is Frightening

10623945-the-word-debt-in-the-american-flag-colors-americans-in-debt

LOOK! Everyone needs to see this. United States owes a lot of money. As of 2012, US debt is larger than the size of the economy. The debt ceiling is currently set at $16.394 Trillion, estimated to be hit around Sep 14, 2012. In the infographic below that enormous amount is illustrated in $100 bills. It’s frightening! Words: 605

18. The U.S. Debt Spiral: When Will it End? More Importantly, HOW Will it End?

shapeimage_25

The U.S. already has more government debt per capita than the PIIGS (Portugal, Italy, Ireland, Greece and Spain) do and it just keeps getting worse and worse thanks to both political parties. We are on the road to national financial oblivion yet most Americans don’t seem to care. They don’t realize that we have enjoyed the greatest prosperity we will ever see…and that when the debt bubble bursts there is going to be an immense amount of pain. That is a very painful truth, but it is better to come to grips with it now than be blindsided by it later. [Let me explain.] Words: 1140

19. Government Can’t Prevent the Next Financial Diaster – Here’s Why

economy2

Even as I write these words, the world’s largest economy — the E.U. — is coming unglued at the seams, the world’s second largest — the U.S. — is careening headlong toward a fiscal cliff that promises to gut its GDP, nearly all of Asia — including Japan, China and India — is slowing…and yet most investors still don’t get the message. [Let me go on to explain just what that message is.] Words: 1357

20. Martin Weiss: You Are Being Forewarned – Again – About an Imminent Financial Megashock!

economy2

[You are being forwarned – again – that Europe and the U.S. are now on a collision course with a second Lehman-type megashock….A snowball of events – bank runs spreading across Europe – are bringing us a few steps closer. What [can we expect] next? Let me explain. Words: 1795

21. The State of the Global Economy in 27 Charts

global-financial-crisis

Goldman analysts Noah Weisberger and Aleksandar Timcenko are out with their July presentation on the state of the global economy…[and while] the charts paint a decidedly negative picture of the global economy…some of Goldman’s proprietary indicators – including their Global Leading Indicator and the Swirlogram – suggest there may be bright spots.

22. Influential Analysts, Economists, Hedge Fund Managers and Traders Watch These Charts Closely – Now You Can Too

a5321_market-analysis

We love charts….so we reached out to some of the world’s most influential analysts, economists, hedge-funders and traders and asked them a simple question: “What charts are you always keeping your eye on?” [Here they are!] Words: 440

23. These 63 Charts Say: The Economy Is MUCH More Important Than the Election or Either Political Party

economy8

“The most important issue in this year’s election is the economy. Unfortunately, this topic has now been “politicized,” which means that you can’t talk about it without being instantly cheered or jeered by fans of each respective political team…[the truth of the matter, however, is that] the economy is much more important than this year’s election or either political team….The first step is getting past the political blame-game and understanding what’s wrong…. Let’s go to the charts.”

24. David Rosenberg: These 51 Charts Show the Economy to be a Total Disaster

economic-train-wreck

The U.S. economic recovery has been weak and the looming fiscal cliff threatens to act as a further drag on the economy. Europe is imploding with the chances of a ‘Grexit’ increasing, and Spain’s economy deteriorating and risking contagion. David Rosenberg looks at the state of the U.S. and global economy via 51 depressing charts.

25. Worldwide Decline in July Manufacturing Indices Say…a Recession is Now Here! Take a Look

recession1

One of the best leading indicators to shed light on the health of the economy is the Purchasing Managers Index (PMI). The latest local readings of the manufacturing PMI for countries around the world, as provided below, collectively give investors a critical insight into the pace of economic growth. Words: 944

26. Update: This Video – Now Viewed by 1,323,000 – Explains Why Economic Collapse of U.S. Is Inevitable!

us-collapse1

This short video – on the unsustainability of government spending – should be watched by everyone, including those not yet old enough to vote. It should be shown in every high school and college classroom. Anyone that cannot understand this presentation should not be allowed out without a guardian.

3 comments

  1. As humans we have become accustomed to the fast easy everything on tap life. Consider how many electric gadgets you own and what they do. Then consider how many you actually need. They may simply be idiotic eg. electric tin opener or simply require a design change. Or my personal favourite. The electric soap dispenser. (this one kills me!) Tiles or wooden floors instead of carpets – no vaccuum cleaner. This ever increasing consumption of Finite resources to make products that are in effect garbage, products which even worse consume finite electricity and resources and to top it all then get binned. This is the fundamental problem. You have to understand why this lunacy prevails. Our Greed growth based capitalist system that we have been brain washed since birth to love has a fundamental flaw. The flaw is starting to manifest itself as cracks in the foundations right now. The flaw lies in the very fundamentals of the capitalist equation. Infinite growth with finite resources driven by unsustainable populations. The first cracks would always be in the financial system. Countries are no longer sustainable in their own right. They have forgotten the fundamentals of security of life. Food water shelter and health. Instead we are in a headlong rush to produce nonsensical wasteful products and services and yet no single country can sustain itself in it’s own right. Eventually what happens and it’s happening, is countries can no longer sustain themselves even in a global sense. i.e. selling and exporting good is still insufficient to cover local demand. (Only so many people can be supported in any economic model.) Then the countries borrow……eventually they borrow so much that even the interest payments are a problem. Forgetting about the principal. They long ago gave up the concept of repaying the principal! (it’s a snowball system) That in itself proves my point. In a nutshell the financial crisis is a crack in the wall. What is coming ito of the resources crunch is a wrecking ball. The world (with us as a part of it) can only survive with about 1 billion people and very few of us will have an office job, drive a car or even have electricity the way you now understand it. We have to fundamentally change the way we think about society and life. The fossil fuel binge is almost over. Unfortunately politicians (another fundamental flaw) only think 3 years in front of them. I fear though that even that even time frame has caught up with them. Deal with reality before reality deals with you.

  2. Losing a good paying job and replacing it with a “summer job” is still a job on a Gov’t. chart, but it is quite different for the economy, which is why I believe that the US is in TWICE as much trouble as the Gov’t. stats seem to say…

    Until the Fed MAKES the Big Banks lower mortgages rates so Seniors (who have no jobs) and those with good mortgage payment histories can all refinance at lower rates, our financial situation will continue to get worse. The Fed can either do this by asking the Big Banks to loosen their too strict requirements or simply set up a national lending mechanism to do it and under cut the Big Banks…

    Until the Big Banks are forced to “Do Business” they will just continue to enjoy almost free money to pay with and invest it GROWING bigger, what incentive do they have to CHANGE?

  3. As every more “real” people begin to understand what is now happening here in the USA, hopefully they will start asking their elected Leaders (on the record) what they purpose doing about and when!

    Here is one of the best explanations of the “euro” crash that now is also going to be happening in the USA to the US$ BUT TO A LARGER DEGREE! http://youtu.be/8PX6zdQ9cd0

    It is scary to me that they are now focused on these 4:
    Medicare reform,
    Social Security,
    personal tax returns or
    extended unemployment benefits

    When they together make up only about 6% of the 2013 budget while the Military makes up about 60% of the budget. (Great Fiscal chart: http://www.OneMinuteForPeace.org) The Ultra Wealthy via their “owned” elected Leaders, are now picking on those most unable to defend themselves, a practice that I think we all should call Un-American!

    Instead The Gov’t needs to end the Wars (including the War on Drugs) that we are not winning and get back into making things better in the USA by rebuilding our infrastructure ASAP, before China* buys all the Earths raw materials needed to do it with.

    *See the book: Red Alert, for much more on that.