18,003,680,600,000 and counting - Bill Wilson - www.dailyjot.com
Many of you may not be aware that the national debt is setting records by the second. in the time it takes to write this sentence, the national debt has risen some $200,000. It stands a little over $18 trillion--$56,373 per citizen and $153,729 per taxpayer. The US workforce is 147.6 million, but there are 92.4 million not in the workforce. There are 158.3 million people receiving some form of government benefits, including 46 million on food stamps. In other words, national debt is over $153,000 per taxpayer (someone who is generating income, ie. working) and there are over 10 million more people receiving government benefits than are working. We have become a socialist state in dire financial condition.
The occupant of the Oval Office has decreed that yet another 4 million illegal aliens are to become citizens. This equates to about the same number of people who are employed by the federal government--just to keep things in perspective. Undoubtedly, this move will have long term impact on spending and benefits, burdening the system even more. Meanwhile, the government continues to prop up Wall Street (socialists' favorite enemy at election time) with its quantitative easing program amounting to some $80 billion a month. They say that if they don't do that, the economy will collapse. At $18 trillion in national debt and $115 trillion in total unfunded liabilities, the economy will eventually collapse.
These figures are found on the US National Debt Clock as provided by various government agencies. We are in great trouble as a nation. Even though the government has mandated that everyone must buy insurance from it, there are still 46.6 million people without insurance. Two years into the program and the number of uninsured has increased, yet it is costing taxpayers billions. A fine mess has been made by this gaggle of politicians in Washington. It's not only the "president," who is an Islamist Marxist doing his best to "remake" America--translated: destroy America. It is also the lack of any opposition to domestic and foreign policy that makes any kind of sense.
In recent days, House Speaker John Boehner is taking a load of criticism for not standing up to the "president's" illegal and unconstitutional amnesty decree. Boehner's response is to post pictures of the Capital Hill Christmas Tree and talk about legislation he passed to level the playing field for people with disabilities. You write him about it and you will likely receive emails thanking you for your support and asking you to follow him on Facebook. This is a classic Nero situation. I know I sound like a broken record, but accountability here is key. People are willing to burn businesses over a lie, but won't do much about the truth. As Isaiah 59:14 says, "for truth is fallen in the street, and equity cannot enter."
There has only been one other time in history when the price of oil has crashed by more than 40 dollars in less than 6 months. The last time this happened was during the second half of 2008, and the beginning of that oil price crash preceded the great financial collapse that happened later that year by several months. Well, now it is happening again, but this time the stakes are even higher. When the price of oil falls dramatically, that is a sign that economic activity is slowing down. It can also have a tremendously destabilizing affect on financial markets. As you will read about below, energy companies now account for approximately 20 percent of the junk bond market. And a junk bond implosion is usually a signal that a major stock market crash is on the way. So if you are looking for a "canary in the coal mine", keep your eye on the performance of energy junk bonds. If they begin to collapse, that is a sign that all hell is about to break loose on Wall Street.
It would be difficult to overstate the importance of the shale oil boom to the U.S. economy. Thanks to this boom, the United States has become the largest oil producer on the entire planet.
Yes, the U.S. now actually produces more oil than either Saudi Arabia or Russia. This "revolution" has resulted in the creation of millions of jobs since the last recession, and it has been one of the key factors that has kept the percentage of Americans that are employed fairly stable.
Unfortunately, the shale oil boom is coming to an abrupt end. As a recent Vox article discussed, OPEC has essentially declared a price war on U.S. shale oil producers...
For all intents and purposes, OPEC is now engaged in a "price war" with the United States. What that means is that it's very cheap to pump oil out of places like Saudi Arabia and Kuwait. But it's more expensive to extract oil from shale formations in places like Texas and North Dakota. So as the price of oil keeps falling, some US producers may become unprofitable and go out of business. The result? Oil prices will stabilize and OPEC maintains its market share.
If the price of oil stays at this level or continues falling, we will see a significant number of U.S. shale oil companies go out of business and large numbers of jobs will be lost. The Saudis know how to play hardball, and they are absolutely ruthless. In fact, we have seen this kind of scenario happen before...
Robert McNally, a White House adviser to former President George W. Bush and president of the Rapidan Group energy consultancy, told Reuters that Saudi Arabia "will accept a price decline necessary to sweat whatever supply cuts are needed to balance the market out of the US shale oil sector." Even legendary oil man T. Boone Pickens believes Saudi Arabia is in a stand-off with US drillers and frackers to "see how the shale boys are going to stand up to a cheaper price." This has happened once before. By the mid-1980's, as oil output from Alaska's North Slope and the North Sea came on line (combined production of around 5-6 million barrels a day), OPEC set off a price war to compete for market share. As a result, the price of oil sank from around $40 to just under $10 a barrel by 1986.
But the energy sector has been one of the only bright spots for the U.S. economy in recent years. If this sector starts collapsing, it is going to have a dramatic negative impact on our economic outlook. For example, just consider the following numbers from a recent Business Insider article...
Specifically, if prices get too low, then energy companies won't be able to cover the cost of production in the US. This spending by energy companies, also known as capital expenditures, is responsible for a lot of jobs.
"The Energy sector accounts for roughly one-third of S&P 500 capex and nearly 25% of combined capex and R&D spending," Goldman Sachs' Amanda Sneider writes.
Even more troubling is what this could mean for the financial markets.
As I mentioned above, energy companies now account for close to 20 percent of the entire junk bond market. As those companies start to fail and those bonds start to go bad, that is going to hit our major banks really hard...
Everyone could suffer if the collapse triggers a wave of defaults through the high-yield debt market, and in turn, hits stocks. The first to fall: the banks that were last hit by the housing crisis.
Why could that happen?
Well, energy companies make up anywhere from 15 to 20 percent of all U.S. junk debt, according to various sources.
It would be hard to overstate the seriousness of what the markets could potentially be facing.
One analyst summed it up to CNBC this way...
"This is the one thing I've seen over and over again," said Larry McDonald, head of U.S strategy at Newedge USA's macro group. "When high yield underperforms equity, a major credit event occurs. It's the canary in the coal mine."
The last time junk bonds collapsed, a major stock market crash followed fairly rapidly.
And those that were hardest hit were the big Wall Street banks...
During the last high-yield collapse, which centered around debt tied to the housing sector, Citigroup lost 63 percent of its value in the following 60 days, Kensho shows. Bank of America was cut in half.
I understand that some of this information is too technical for a lot of people, but the bottom line is this...
Watch junk bonds. When they start crashing it is a sign that a major stock market collapse is right at the door.
At this point, even the mainstream media is warning about this. Just consider the following excerpt from a recent CNN article...
That swing away from junk bonds often happens shortly before stock market downturns.
"High yield does provide useful sell signals to equity investors," Barclays analysts concluded in a recent report.
Barclays combed through the past dozen years of data. The warning signal they found is a 30% or greater increase in the spread between Treasuries and junk bonds before a dip.
If you have been waiting for the next major financial collapse, what you have just read in this article indicates that it is now closer than it has ever been.
Over the coming weeks, keep your eye on the price of oil, keep your eye on the junk bond market and keep your eye on the big banks.
Trouble is brewing, and nobody is quite sure exactly what comes next.
Many of you may not be aware that the national debt is setting records by the second. in the time it takes to write this sentence, the national debt has risen some $200,000. It stands a little over $18 trillion--$56,373 per citizen and $153,729 per taxpayer. The US workforce is 147.6 million, but there are 92.4 million not in the workforce. There are 158.3 million people receiving some form of government benefits, including 46 million on food stamps. In other words, national debt is over $153,000 per taxpayer (someone who is generating income, ie. working) and there are over 10 million more people receiving government benefits than are working. We have become a socialist state in dire financial condition.
The occupant of the Oval Office has decreed that yet another 4 million illegal aliens are to become citizens. This equates to about the same number of people who are employed by the federal government--just to keep things in perspective. Undoubtedly, this move will have long term impact on spending and benefits, burdening the system even more. Meanwhile, the government continues to prop up Wall Street (socialists' favorite enemy at election time) with its quantitative easing program amounting to some $80 billion a month. They say that if they don't do that, the economy will collapse. At $18 trillion in national debt and $115 trillion in total unfunded liabilities, the economy will eventually collapse.
These figures are found on the US National Debt Clock as provided by various government agencies. We are in great trouble as a nation. Even though the government has mandated that everyone must buy insurance from it, there are still 46.6 million people without insurance. Two years into the program and the number of uninsured has increased, yet it is costing taxpayers billions. A fine mess has been made by this gaggle of politicians in Washington. It's not only the "president," who is an Islamist Marxist doing his best to "remake" America--translated: destroy America. It is also the lack of any opposition to domestic and foreign policy that makes any kind of sense.
In recent days, House Speaker John Boehner is taking a load of criticism for not standing up to the "president's" illegal and unconstitutional amnesty decree. Boehner's response is to post pictures of the Capital Hill Christmas Tree and talk about legislation he passed to level the playing field for people with disabilities. You write him about it and you will likely receive emails thanking you for your support and asking you to follow him on Facebook. This is a classic Nero situation. I know I sound like a broken record, but accountability here is key. People are willing to burn businesses over a lie, but won't do much about the truth. As Isaiah 59:14 says, "for truth is fallen in the street, and equity cannot enter."
Guess What Happened The Last Time The Price Of Oil Crashed Like This?... - By Michael Snyder - http://theeconomiccollapseblog.com/archives/guess-happened-last-time-price-oil-crashed-like
There has only been one other time in history when the price of oil has crashed by more than 40 dollars in less than 6 months. The last time this happened was during the second half of 2008, and the beginning of that oil price crash preceded the great financial collapse that happened later that year by several months. Well, now it is happening again, but this time the stakes are even higher. When the price of oil falls dramatically, that is a sign that economic activity is slowing down. It can also have a tremendously destabilizing affect on financial markets. As you will read about below, energy companies now account for approximately 20 percent of the junk bond market. And a junk bond implosion is usually a signal that a major stock market crash is on the way. So if you are looking for a "canary in the coal mine", keep your eye on the performance of energy junk bonds. If they begin to collapse, that is a sign that all hell is about to break loose on Wall Street.
It would be difficult to overstate the importance of the shale oil boom to the U.S. economy. Thanks to this boom, the United States has become the largest oil producer on the entire planet.
Yes, the U.S. now actually produces more oil than either Saudi Arabia or Russia. This "revolution" has resulted in the creation of millions of jobs since the last recession, and it has been one of the key factors that has kept the percentage of Americans that are employed fairly stable.
Unfortunately, the shale oil boom is coming to an abrupt end. As a recent Vox article discussed, OPEC has essentially declared a price war on U.S. shale oil producers...
For all intents and purposes, OPEC is now engaged in a "price war" with the United States. What that means is that it's very cheap to pump oil out of places like Saudi Arabia and Kuwait. But it's more expensive to extract oil from shale formations in places like Texas and North Dakota. So as the price of oil keeps falling, some US producers may become unprofitable and go out of business. The result? Oil prices will stabilize and OPEC maintains its market share.
If the price of oil stays at this level or continues falling, we will see a significant number of U.S. shale oil companies go out of business and large numbers of jobs will be lost. The Saudis know how to play hardball, and they are absolutely ruthless. In fact, we have seen this kind of scenario happen before...
Robert McNally, a White House adviser to former President George W. Bush and president of the Rapidan Group energy consultancy, told Reuters that Saudi Arabia "will accept a price decline necessary to sweat whatever supply cuts are needed to balance the market out of the US shale oil sector." Even legendary oil man T. Boone Pickens believes Saudi Arabia is in a stand-off with US drillers and frackers to "see how the shale boys are going to stand up to a cheaper price." This has happened once before. By the mid-1980's, as oil output from Alaska's North Slope and the North Sea came on line (combined production of around 5-6 million barrels a day), OPEC set off a price war to compete for market share. As a result, the price of oil sank from around $40 to just under $10 a barrel by 1986.
But the energy sector has been one of the only bright spots for the U.S. economy in recent years. If this sector starts collapsing, it is going to have a dramatic negative impact on our economic outlook. For example, just consider the following numbers from a recent Business Insider article...
Specifically, if prices get too low, then energy companies won't be able to cover the cost of production in the US. This spending by energy companies, also known as capital expenditures, is responsible for a lot of jobs.
"The Energy sector accounts for roughly one-third of S&P 500 capex and nearly 25% of combined capex and R&D spending," Goldman Sachs' Amanda Sneider writes.
Even more troubling is what this could mean for the financial markets.
As I mentioned above, energy companies now account for close to 20 percent of the entire junk bond market. As those companies start to fail and those bonds start to go bad, that is going to hit our major banks really hard...
Everyone could suffer if the collapse triggers a wave of defaults through the high-yield debt market, and in turn, hits stocks. The first to fall: the banks that were last hit by the housing crisis.
Why could that happen?
Well, energy companies make up anywhere from 15 to 20 percent of all U.S. junk debt, according to various sources.
It would be hard to overstate the seriousness of what the markets could potentially be facing.
One analyst summed it up to CNBC this way...
"This is the one thing I've seen over and over again," said Larry McDonald, head of U.S strategy at Newedge USA's macro group. "When high yield underperforms equity, a major credit event occurs. It's the canary in the coal mine."
The last time junk bonds collapsed, a major stock market crash followed fairly rapidly.
And those that were hardest hit were the big Wall Street banks...
During the last high-yield collapse, which centered around debt tied to the housing sector, Citigroup lost 63 percent of its value in the following 60 days, Kensho shows. Bank of America was cut in half.
I understand that some of this information is too technical for a lot of people, but the bottom line is this...
Watch junk bonds. When they start crashing it is a sign that a major stock market collapse is right at the door.
At this point, even the mainstream media is warning about this. Just consider the following excerpt from a recent CNN article...
That swing away from junk bonds often happens shortly before stock market downturns.
"High yield does provide useful sell signals to equity investors," Barclays analysts concluded in a recent report.
Barclays combed through the past dozen years of data. The warning signal they found is a 30% or greater increase in the spread between Treasuries and junk bonds before a dip.
If you have been waiting for the next major financial collapse, what you have just read in this article indicates that it is now closer than it has ever been.
Over the coming weeks, keep your eye on the price of oil, keep your eye on the junk bond market and keep your eye on the big banks.
Trouble is brewing, and nobody is quite sure exactly what comes next.
The U.S. Economy & The Price of Oil: Could The Fix Be In?
- Belle Ringer - http://www.salvationandsurvival.com/2014/11/will-price-war-on-oil-lead-to-more-war.html
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?"
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