Archive for the ‘Financial melt-down’ Category

« Older Entries
Newer Entries »

IMF warns US about its ‘fragile’ economy

Thursday, June 30th, 2011

The International Monetary Fund has warned that the US debt burden is on an “unsustainable trajectory“.

(red emphasis is mine)

But the IMF said the US must avoid a sharp correction in order to protect its fragile economic recovery.

The IMF report forecast economic growth of 2.5% this year and 2.7% in 2012, which is below the Federal Reserve’s own estimate of 3.3% next year.

“The [US] recovery has proceeded at a relatively slow pace… and has recently weakened,” the IMF said.

The US budget deficit is projected to reach $1.4 trillion this year, above last year’s $1.29 trillion gap and just below a record $1.41 trillion reached in 2009.

In its annual review of the US economy, the IMF urged Washington to reach a swift agreement on a deal to raise the government’s borrowing limit.

‘Significant consequences’

The Obama administration and Congress are locked in negotiations over making budget cuts before approval is given to raise the debt ceiling.

The US Treasury already has reached the existing $14.3 trillion legal limit on the nation’s debt and needs to raise the debt ceiling by 2 August to avoid a default.

Failure to agree a debt limit deal would cause a “severe shock” to the economy, the IMF said, and could lead to a downgrade in the country’s coveted AAA debt rating and send interest rates soaring.

“These risks would also have significant global repercussions, given the central role of US Treasury bonds in world financial markets,” the IMF said.

President Barack Obama echoed these sentiments when he warned that: “If the United States government, for the first time, cannot pay its bills, if it defaults, then the consequences for the US economy will be significant and unpredictable”.

– to the original… ➡

Posted in CrashBlogging, Financial melt-down, Social Breakdown, The Perfect Storm | 1 Comment »

Man Robs Bank…for Health Care?

Friday, June 24th, 2011

– Healthcare in the US.  Almost an oxymoron at times.

– Some friends here in NZ are thinking of trips to the US and they are looking into healthcare insurance they can buy here to protect them in the US.  Because if you get sick in the US without insurance – God help you.

– So prices were discussed and I had to reflect how those prices compared with what I paid for healthcare in the US.

– For seven or eight New Zealand dollars a day, you can buy travel insurance here in NZ that will cover you in the US.   That’s medical insurance AND travel insurance all wrapped up in one package.

– And, get this:   If you get seriously sick in the US, this NZ insurance will put you on a plane and fly you back to NZ to have you treated here – all on the insurance company’s dime!

– When I was still in the US, my ex and I paid approximately $900 US dollars a month for our healthcare insurance.   That’s $450 each.  And, we each had a $2500 per year deductible on this policy.  So, we had to spend the first $2500 each year out of our pocket before the insurance kicked in and then, after that, it paid 80%.

– $450 per month works out to $15 US dollars per day.  But, if you also calculate in the $2500 deductible each, that’s another  $208 US dollars a month so your insurance is really costing you $450 + $208 = $658 per month for 80% coverage.   That’s $21.93 a day !!!

– Compare that with the seven or eight dollars a day I’ll pay a New Zealand insurance company to cover me in the US – and you get the idea, yes?

– Here’s a story for you now to put the cherry square on top of this sweet little story for you:

– – – – – – – – – – – – – – –

Having already set his affairs in order, James Verone calmly walked into an RBC bank in North Carolina and committed his first crime in his 59 years on this planet. Verone handed the teller a note that read “This is a bank robbery. Please only give me one dollar,” took the dollar from the terrified clerk, and sat down on a couch in the bank’s lobby.

“‘I’ll be sitting right over there in the chair waiting for the police,” Verone told the bank teller. And wait he did. Police arrived moments later and apprehended him, hauling him off to the jail cell he so desperately wanted to enter.

No, James Verone isn’t crazy. He isn’t a career criminal. He didn’t rob the bank to get drugs or booze. He didn’t do it to get attention or on a lark. James Verone walked into that bank and committed a felony because going to jail was the only way he could receive the health care he needed to survive.

Verone is one man, but he could really be any one of us. He’s 59 and well past the point of finding a new career. He was laid off from his 17-year job and, with unemployment hardly a survivable wage, took the first job that came his way. He developed a growth on his chest – the sort of medical condition that could be life-threatening – and earned two ruptured disks in his back, along with problems with his left foot.

After depleting his life savings and realizing he had, literally, nowhere else to turn, Verone committed the crime, hoping he could get the medical care that he so desperately needs.

This is what America has come to? Otherwise honest folks, with no where to turn in life, have to resort to fake-robbing a bank with the hopes they’ll be arrested so they can receive medical care?

– More… ➡

Tags:
Posted in Capitalism & Corporations, CrashBlogging, Financial melt-down, Human Rights, New Zealand, Social Breakdown, The Perfect Storm | No Comments »

Social Security Statement

Tuesday, May 31st, 2011

– People say that the US’s Social Security System is going to be fine and others say that its days are numbered and that those in future generations will never get out of it what they’ve paid into it.

– Well, I don’t know the truth of it one way or the other but I did find this disquieting when I visited the US Social Security website this evening:

Social Security Website 31May2011

Social Security Website 31May2011

– Click it to make it bigger.

Posted in CrashBlogging, Financial melt-down, The Perfect Storm | No Comments »

Number of Americans living in poverty ‘increases by 4m’

Friday, January 28th, 2011

One in seven Americans was living in poverty in 2009 with the level of working-age poor the highest since the 1960s, the US Census Bureau says.

The number of people in poverty increased by nearly 4m – to 43.6m – between 2008 and 2009, officials said.

The bureau defines poverty as any family of four living on less than $21,954 a year.

Meanwhile, new figures showed home foreclosures in August hit the highest level since the mortgage crisis began.

Banks repossessed 95,364 properties in August, up 3% from July and an increase of 25% from August 2009, said RealtyTrac, a company which charts the national picture.

The official US poverty rate in 2009 rose to 14.3% from 13.2% in 2008. In 2009, 43.6 million Americans lived in poverty, up from 39.8 million the year before, the third consecutive increase, the bureau said.

– More… ➡

Posted in Capitalism & Corporations, CrashBlogging, Financial melt-down, Food Shortages, Human Rights, Social Breakdown, The Perfect Storm | No Comments »

US new home sales in 2010 mark record low

Wednesday, January 26th, 2011

Sales of newly built homes in the US hit their lowest level in 2010 since records began 47 years ago.

For the year there were only 321,000 sales across the US, down 14% from 2009 and the fifth year of decline, the Department of Commerce said.

Sales did mark a strong rise in December, rising 17% from the previous month on a seasonally adjusted basis.

However, separate data showed mortgage applications fell sharply in January as borrowing rates continue to rise.

Applications for mortgages to finance home purchases fell nearly 9% last week, according to the Mortgage Bankers Association, hitting their lowest level since October.

The drop comes in response to a steady rise in long-term borrowing costs in the US in recent weeks, hitting 4.8% on 30-year mortgages in the last week.

‘Distressed’ sales

Despite the rise in the last month of the year, 2010 still recorded the lowest volume of sales in a December since 1966, according to thecommerce department’s data.

The year had begun well, with activity boosted by a homebuyers’ tax credit.

But sales levels plummeted in the summer following the April expiry of the credit, which economists claim merely encouraged buyers to bring forward purchases they would have made anyway.

– More… ➡

Posted in Capitalism & Corporations, CrashBlogging, Financial melt-down, Social Breakdown, The Perfect Storm | No Comments »

The 25 Countries Whose Governments Could Get Crushed By Food Price Inflation

Wednesday, January 26th, 2011

Food inflation is now a reality for much of the world. It contributed to the overthrow of the Tunisian government, has led to riots across the Middle East and North Africa, driven up costs in China and India, and may only be getting started.

Whether you blame a bad crop or bad monetary policy, food inflation is here.

Nomura produced a research report detailing the countries that would be crushed in a food crisis. One, Tunisia, has already seen its government overthrown.

Their description of a food crisis is a prolonged price spike. They calculate the states that have the most to lose by a formula including:

  • Nominal GDP per capita in USD at market exchange rates.
  • The share of food in total household consumption.
  • Net food exports as a percentage of GDP.

We’ve got the top 25 countries in danger here and the list, including a major financial center, may surprise you.

– To see the list of 25 counties click the arrow… ➡

Posted in Conflict, CrashBlogging, Financial melt-down, Food Shortages, Social Breakdown, The Perfect Storm | No Comments »

The year of living dangerously

Wednesday, January 26th, 2011

Rising commodity prices and extreme weather events threaten global stability

Get ready for a rocky year. From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: the prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world.

It’s not surprising then that food and energy experts are beginning to warn that 2011 could be the year of living dangerously — and so could 2012, 2013, and on into the future. Add to the soaring cost of the grains that keep so many impoverished people alive a comparable rise in oil prices — again nearing levels not seen since the peak months of 2008 — and you can already hear the first rumblings about the tenuous economic recovery being in danger of imminent collapse. Think of those rising energy prices as adding further fuel to global discontent.

Already, combined with staggering levels of youth unemployment and a deep mistrust of autocratic, repressive governments, food prices have sparked riots in Algeria and mass protests in Tunisia that, to the surprise of the world, ousted long-time dictator President Zine al-Abidine Ben Ali and his corrupt extended family. And many of the social stresses evident in those two countries are present across the Middle East and elsewhere. No one can predict where the next explosion will occur, but with food prices still climbing and other economic pressures mounting, more upheavals appear inevitable. These may be the first resource revolts to catch our attention, but they won’t be the last.

– More… ➡

Posted in Conflict, CrashBlogging, Financial melt-down, Food Shortages, Social Breakdown, The Perfect Storm | No Comments »

China’s Hu Jintao: Currency system is ‘product of past’

Monday, January 24th, 2011

– Yes, this writing on the wall will be hard for folk in the U.S. to accept – that they are no longer the financial center of the world.   It’s coming.     If you watch the news flowing by, you will have seen a steady and increasing drum beat of calls to end the era of the U.S. dollar being the world’s reference currency.  And when that era ends, there are going to be big changes for the US, sad to say.  – Dennis

– – – – – – – – – – – – – – – – – – – – – –

Chinese President Hu Jintao has said the international currency system dominated by the US dollar is a “product of the past.

Mr Hu also said China was taking steps to replace it with the yuan, its own currency, but acknowledged that would be a “fairly long process”.

The remarks to two US newspapers come ahead of a state visit by the Chinese leader to Washington this week.

They reflect continuing tensions over currency issues between the two powers.

The remarks to the Washington Post and Wall Street Journal came in the form of written responses to questions. Mr Hu also reiterated criticism of a decision by the US Federal Reserve to inject $600bn into the economy, which some argue will weaken the dollar at the expense of other countries’ exports.

“The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level,” President Hu said.

– More… ➡

Posted in Financial melt-down, General | No Comments »

Brazil Finance Minister Mantega warns of trade war

Thursday, January 13th, 2011

Brazil has warned that the world is on course for a trade war because of what it says is currency manipulation by China, the US and others.

Finance minister Guido Mantega said Brazil was preparing moves to prevent further appreciation of its currency.

He said his government would raise the issue at the World Trade Organization and the G20 group of rich and developing countries.

Mr Mantega was speaking in an interview with the Financial Times newspaper.

“This is a currency war which is turning into a trade war,” Mr Mantega said in his first major interview since Dilma Rousseff took office as Brazil’s new president on 1 January.

He said Brazil’s trade with the US had slipped from an annual surplus of about $15bn (£9.6bn) to a deficit of $6bn because of US efforts to revive its economy through loose monetary policy.

“The exchange rate is one of the main drivers of economic policy, more so even than productivity,” he said.

Mr Mantega added that China’s “undervalued currency” was also distorting world trade.

He has been finance minister since 2006. In September last year he accused some rich countries of deliberately devaluing their currencies to boost exports and make their economies more competitive.

The Brazilian real has increased by 39% against the US dollar in the last two years.

Its value has been going up steadily as Brazil’s economy has grown, making Brazilian exports less competitive.

Brazil has been swamped by a flood of foreign capital that is taking advantage of low interest rates in the developed world to chase high returns in emerging economies, the BBC business reporter Linda Duffin says.

The International Monetary Fund warned in October that some countries appeared to be trying to use their currencies “as a weapon” and the issue of currency manipulation was discussed at the G20 summit in November.

– To the original… ➡

Posted in Conflict, CrashBlogging, Financial melt-down, The Perfect Storm | No Comments »

The Decline And Fall Of The American Empire

Wednesday, January 12th, 2011

– I spend part of my evening last night reading “The Decline And Fall Of The American Empire” by Professor Alfred McCoy.

– Some friends of mine in an on-line discussion group were passing it around and discussing it.  Once I read it, I sent it along to others of my friends as well.   It’s a view (several, actually) of how the American decline might play out.  As Baby-Boomers and younger, we’ve all grown up in an American dominated world and it is hard for any of us to imagine such a global sea-change could happen.   But I, like McCoy, believe it is coming.

– It’s a good read and not too long.   Give it a shot it you have a few moments.

– Dennis

= = = = = = = = = = = = =

Four Scenarios for the End of the American Century by 2025

A soft landing for America 40 years from now? Don’t bet on it. The demise of the United States as the global superpower could come far more quickly than anyone imagines. If Washington is dreaming of 2040 or 2050 as the end of the American Century, a more realistic assessment of domestic and global trends suggests that in 2025, just 15 years from now, it could all be over except for the shouting.

Despite the aura of omnipotence most empires project, a look at their history should remind us that they are fragile organisms. So delicate is their ecology of power that, when things start to go truly bad, empires regularly unravel with unholy speed: just a year for Portugal, two years for the Soviet Union, eight years for France, 11 years for the Ottomans, 17 years for Great Britain, and, in all likelihood, 22 years for the United States, counting from the crucial year 2003.

Future historians are likely to identify the Bush administration’s rash invasion of Iraq in that year as the start of America’s downfall. However, instead of the bloodshed that marked the end of so many past empires, with cities burning and civilians slaughtered, this twenty-first century imperial collapse could come relatively quietly through the invisible tendrils of economic collapse or cyberwarfare.

But have no doubt: when Washington’s global dominion finally ends, there will be painful daily reminders of what such a loss of power means for Americans in every walk of life. As a half-dozen European nations have discovered, imperial decline tends to have a remarkably demoralizing impact on a society, regularly bringing at least a generation of economic privation. As the economy cools, political temperatures rise, often sparking serious domestic unrest.

Available economic, educational, and military data indicate that, when it comes to U.S. global power, negative trends will aggregate rapidly by 2020 and are likely to reach a critical mass no later than 2030. The American Century, proclaimed so triumphantly at the start of World War II, will be tattered and fading by 2025, its eighth decade, and could be history by 2030.

– To the full article… ➡

– Research thanks to John P.

Posted in Conflict, CrashBlogging, Financial melt-down, Social Breakdown, The Perfect Storm | No Comments »

« Older Entries
Newer Entries »