Exit The Carousel: Re-enter The Economic Roller Coaster

Nightmare Scenario (Michael Rivero)

At the end of 2007 the Dow Jones Industrial Average stood at just over 13,000 - five years further on, as 2012 draws to a close the key stock-market barometer is barely above 13,000 - or zero net growth! Even with attempts to show them in the most favorable light, it is clear that key economic indicators like employment reflect no net progress - in some cases being significantly worse than five years ago. Despite the cold reality of a moribund economy, however, where real jobs (outside the public sector) have all but disappeared, with holders of graduate degrees having to choose between flipping burgers and walking the aisles of the local Walmart, mainstream economists have again closed ranks to insist almost unanimously, that the economy has turned the corner - projecting 2013 to be a year of growth!

The last time such optimism occurred was at the beginning of 2008 - remember what happened then? Following an initial deep sell-off into March, 2009, after almost four years of clawing their way back, markets remain well below their high-water mark, with jobs & the economy yet to exit intensive care. As stimulus packages come and go, leaving behind little more than dashed hopes and a mounting pile of unpayable debt the public dreams of a miraculous turnaround that is always just around the corner. Meanwhile, neither discredited Keynesian economists nor the befuddled public that wants to believe have yet learned the lesson that the old Soviet Union collapsed not due to communism, but to stifling market forces, due to a foolish idea that officials somehow make wiser choices than the free market!

Just as in nature, trees fall a whole lot faster than it takes to grow, so too the markets and economy! The rally-back has all but ended and markets should resume their downward spiral by as early as the 2nd quarter of 2013, again confounding the almost unanimous projections of mainstream economists. As the public is again caught off-guard, the camp that believes that Santa Claus delivers 'free lunches' will look to the government to save them by taxing the rich - and running the money-printing presses!

But, just as the owners of below sea-level property discovered to their great chagrin in New Orleans, the presence of manmade levees is no protection when the hundred-year storm finally comes calling! As we emerge from its relatively calm eye, the business end of this multi-century storm will leave most of the economy submerged deep under water as a deflationary depression arrives in full force. By the end of it all the damage will be irreversible - the dollar no longer the world's reserve currency!

In the end debt is either repaid or written off, usually by declaring bankruptcy - there is no other way! The delusion that unlimited debt can be issued as a government counterfeits its currency into oblivion and that Central Planning can somehow abolish the business cycle will be exposed as complete fraud!

Pain is part and parcel of the human condition- attempts to abolish it only appear foolish in hindsight! Politicians who try to mislead the public otherwise to hold power and the 'experts' who facilitate them are the pied pipers of our world today- in the end only free markets can provide sustainable solutions!

An Economic Fairy Tale
Say Goodbye To The Good Life
Sorry, Santa Isn’t Real … and Neither Is “Free” Money
You Know How This Ends Right? This Ends Through War
It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness
Ex-Feds and Wall Street Execs Are Going Into Hiding - Why?
15 Signs The Economy Is Rapidly Getting Worse As We Head Into 2013
Standstill: Charts That Prove the Global Economy Is In Serious Trouble

2-minute video: US debt visualized. 2-minute read: US solutions

US government intelligence agencies see possible economic collapse, resource wars, the fall of America by 2030

Monday, December 10, 2012 by Mike Adams, the Health Ranger Editor of NaturalNews.com

(NaturalNews) The latest report from the National Intelligence Council explores megatrends that will impact America through 2030. The report is a jaw-dropper, as it openly explains that America will be overtaken by China as the world's dominant economic superpower. It also lays out the likelihood of megatrends such as global economic collapse, wars over food and water, energy scarcity and the rise of the individual against the state.

The full report is available as a download from the National Intelligence Council website.

"In terms of the indices of overall power -- GDP, population size, military spending and technological investment -- Asia will surpass North America and Europe combined," the report concludes. Rather than the world being dominated by a single superpower as it is now, China will be the global force to be reckoned with, it says.

The report also warns that if the U.S. government collapses or suddenly weakens, it would set off "global anarchy." This is especially worrisome, given the accelerating financial debt blowout strategy being pursued by President Obama, who has added more debt to the federal government (by far) than any other President in U.S. history. Now at $16.3 trillion, the national debt is only accelerating, putting the nation on a collision course with certain economic collapse.

The rise of China has already begun

Just this week, China has been seen buying up key assets from the U.S. private sector. A Chinese firm recently won the bid for U.S. battery maker A123, one of the darling alternative energy companies highlighted by the Obama administration. Now, Wanxiang Group Corp. will be purchasing the company for $256 million.

Also today, a Chinese consortium group is purchasing AIG's aircraft leasing business ILFC for a whopping $4.8 billion, giving China a ready network of private aircraft worldwide.

According to Reuters, China went on a "deal-making spree" in 2012, spending $56.8 billion on acquisitions. A Chinese company has also recently purchased a Canadian energy company Nexen for $15.1 billion.

Earlier this year, a Chinese firm also purchased the AMC movie theater chain for $2.6 billion, giving China near-total control over what movies are shown in America. This has already resulted in one striking piece of editorial censorship with the movie "Red Dawn" which was painstakingly altered to change Chinese enemy soldiers to North Korean soldiers in order to appease the Chinese government. If the film had not been altered, it certainly would not have been shown in AMC theaters, now owned by the Chinese. This is how communist Chinese propaganda has already reached U.S. shores.

We pay China to take over America

Financial Quake Next: Skyscraper Debt Portends Mega Collapse

Urban Danger: How to Survive an Economic Collapse (Full Movie)

Fox Business

“There are two ways to conquer and enslave a country.
One is by the sword. The other is by debt.”

― John Adams

“To preserve our independence, we must not let our rulers load us with perpetual debt.
We must make our election between economy and liberty, or profusion and servitude.”

― Thomas Jefferson

Like a modern-day Tower of Babel, public debt has now surpassed the size of the entire US economy and will very soon exceed 20% of the combined world economy - but it shows no signs of letting up! Those responsible for building this skyscraper of unpayable debt - politicians who promise the world and central bankers who print money from nothing to make it seem okay, think they can postpone the day of reckoning indefinitely - they can't, but they will not be stuck with the tab in the end - you will! All skyscrapers - whether made of steel or of seemingly-unlimited wads of debt-backed fiat currency - have a limit to how high they can go before becoming subject to failure against the forces of nature. The next financial tremor will almost certainly lead to collapse of the tallest debt high-rise in history!

The numbers are so huge that people generally fail to comprehend the true magnitude of all the debt! Ever wondered what a trillion dollars looks like? Most are able to follow sums up to a million dollars, so, another way to express a trillion dollars is as a million million dollars - one followed by 12 zeroes. We can also lop off the extra zeroes and break the deficit down to household budgets we can relate to or attempt to visualize these mega sums as stacks of $100 bills as shown in the feature article below!

The next shift in financial tectonic plates will result in collapse for these unstable skyscrapers of debt! Their speedy collapse will cause the US to lead the world into a deflationary depression by mid-2013. The economic disaster will be unlike anything seen. Avoid being a debt slave - start preparing today!

When the Weakest Critical Part Fails, the Machine Breaks Down

U.S. Economy: The Financial Tectonic Plates Are Shifting Once Again

Ten Questions You Need To Answer Before The Next Global Depression Sets In

Expert Explains In Detail How The Next Shock Will Shatter The Global Economy

Startling Evidence That Central Banks And Wall Street Insiders Are Rapidly Preparing For Something BIG

Max Keiser: Collapse Is Imminent!!

The United States’ $122.1 Trillion Debt Visualized in $100 Bills

By H.Q. Roosevelt / 15 August 2012 / 0 comments

We kicked butt in the Olympics and landed on Mars. It’s been a pretty good month of the United States but with the elections coming up around the corner our economy has become a major battle between Romney and Obama. The fact is our great country owes a lot of money. U.S. debt is larger than the size of the economy and the debt ceiling is currently set at $16.394 Trillion, estimated to be hit around September 14, 2012. To put it in prospective take a look at the infographics below that shows the sheer physical size of our debt. It is going to take a great leader to start chipping away at this skyscraper sized pile of debt so stay informed and try to make the right decision in November.

One Hundred Dollars

$100 – Most counterfeited money denomination in the world. Keeps the world moving.

Ten Thousand Dollars

$10,000 – Enough for a great vacation or to buy a used car. Approximately one year of work for the average human on earth.

One Million Dollars

$1,000,000 – Not as big of a pile as you thought, huh? Still this is 92 years of work for the average human on earth.

One Hundred Million Dollars

$100,000,000 – Plenty to go around for everyone. Fits nicely on an ISO / Military standard sized pallet. The couch is worth $46.7 million. Made out of crispy $100 bills.

One Billion Dollars

$1,000,000,000 – You will need some help when robbing the bank. Interesting fact: $1 million dollars weights 10kg exactly. You are looking at 10 tons of money on those pallets.

One Trillion Dollars

$1,000,000,000,000 – The 2011 US federal deficit was $1.412 Trillion – 41% more than you see here. If you spent $1 million a day since Jesus was born, you would have not spent $1 trillion by now… but ~$700 billion- same amount the banks got during bailout.

One Trillion Dollars

Comparison of $1,000,000,000,000 dollars to a standard sized American Football field. Say hello to the Boeing 747-400 transcontinental airliner that’s hiding in the back. This was until recently the biggest passenger plane in the world. You can see the White House with both wings to the right.

$16.394 Trillion – 2012 US Debt Ceiling

The US debt ceiling limit D-Day is estimated for September 14, 2012. US Debt has now surpassed the size of US economy in 2011– rated @ $15,064 Trillion. Statue of Liberty seems rather worried as United States national debt is soon to pass 20% of the entire world’s combined economy (GDP / Gross Domestic Product).

122.1 Trillion Dollars

$122,100,000,000,000. – US unfunded liabilities by Dec 31, 2012. Above you can see the pillar of cold hard $100 bills that dwarfs the WTC & Empire State Building – both at one point world’s tallest buildings. If you look carefully you can see the Statue of Liberty. The 122.1 Trillion dollar super-skyscraper wall is the amount of money the U.S. Government knows it does not have to fully fund the Medicare, Medicare Prescription Drug Program, Social Security, Military and civil servant pensions. It is the money USA knows it will not have to pay all its bills.

Total Financial Collapse - Inevitable Result of Unlimited Debt

I Want The Earth + Five Percent: The Origin of a Debt Based Economy

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children wake up homeless on the continent they conquered.”

― Thomas Jefferson

“Give me control of a nation's money and I care not who makes it's laws”

― Mayer Amschel Bauer Rothschild

Suppose your bank offered you an unlimited line of credit - and any draw-downs could be repaid by simply issuing more credit to cover the outstanding total plus interest - would you take up their offer? There is one catch - even after your death your family continues to be responsible for your full debts. Though tempting, no one with an ounce of concern about their offspring would accept such an offer - indeed such actions would be seen by nearly all societies as unfair enslavement of future generations. Yet the system described here has been in force in the land of the free for almost one hundred years. Since 1913 all currency issued in the United States has come from debt issued by the Federal Reserve (privately-owned institution) and must ultimately be repaid along with interest by future generations!

The inevitable, totally predictable result of allowing a private bank to issue your currency as debt is that the day eventually arrives when the debt bill becomes so enormous it simply cannot be repaid! Meanwhile the currency steadily depreciates as money is printed to cover interest owed on the debt. The public debt is already so large that your great grandchildren will be saddled with a 'ball & chain' that they will carry throughout their entire lives, unless steps are taken to repudiate it and start over!

The unending regional conflicts that seem destined to lead the planet towards WWIII are no accident! As creditors and trading partners awaken to the reality of an 'Everest' of unpayable debt, the issuer of today's reserve currency will do all in its power to delay its day of reckoning- that day is almost here!

THE ELEVENTH MARBLE

Dr. Doom: “The 2013 Perfect Storm Scenario Is Unfolding”

The Financial Crisis Was Foreseeable … Thousands of Years Ago

Everything You Need To Know: The Economic Collapse for Dummies

27 Things That Every American Should Know About The National Debt

Money As Debt - Full Length Documentary

Very Real Danger of Collapse: “Could Be So Severe I Don’t Think Our Civilization Could Survive It”

Mac Slavo July 17th, 2012 SHTFplan.com Comments (349) Read by 38,581 people

The single most important factor responsible for fueling the last several decades of economic growth has been credit expansion. Whether it’s central banks lending money to large financial institutions, or private banks dispersing funds to businesses and individuals, our lifestyles simply would not have been made possible without it – builders couldn’t build homes, manufacturers couldn’t acquire raw materials, and consumers wouldn’t be able to consume. Living in a country whose currency happens to be the reserve trade instrument for the entire globe has had its benefits. We’ve built huge homes, enjoyed healthy diets, taken luxurious vacations; we’ve even exported menial jobs that no civilized members of society would ever engage in to third world labor camps.

In the process we’ve expanded our national debt to unprecedented levels, with some estimates suggesting that our total liabilities and commitments are approaching nearly $200 trillion in the next twenty five years.

By all accounts, we live in a system built on nothing more than a promise to repay what we’ve borrowed. This reverse trickle-down economics has left everyone bloated with debt, including the government as a whole, as well as the individual American who has bought his house, car, furnishings and overall lifestyle by taking on insurmountable levels of debt.

In 2007 we began to see cracks in this supposedly stable economic model. By late 2008 the entire world was in crisis as credit lending on all levels came to a standstill. Stock markets crashed, governments panicked, and the people grasped on to promises of hope and change.

Four years on we’re told that the economy is bouncing back, yet all signs point to continued global malaise. More jobs are destroyed every month than are created, global shipping has all but come to a standstill, homes continue to lose value, and millions upon millions of Americans require government assistance for the most basic of needs.

There is no recovery. The credit crisis has not been averted. Things are going to get far worse before they get better.

While most refuse to admit it, the evidence is clear. Our system of “creditism,” as described by The New Great Depression author Richard Duncan, is dependent on monetary intervention and expansion by our central bank. Unless the Federal Reserve continues to artificially expand credit and print more money, the system will collapse in on itself – just as it almost did in 2008.

At some point, says Duncan, the expansion simply won’t be possible anymore.

How bad can it get once that happens? According to Duncan, it can get so bad that our civilization as we know it today simply won’t be able to handle it.

In order to understand this crisis it’s necessary to understand the role credit has played in bringing it about.
When we broke the link between money and gold forty years ago, this removed all the constraints on credit creation. And afterwards credit absolutely exploded. In the U.S. it grew from $1 trillion to $50 trillion – a fifty-fold increase in forty three years.
This explosion of credit created the world we live. It created very rapid economic growth. It ushered in the age of globalization.
But it now seems credit cannot expand any further because the private sector is incapable of repaying the debt that it has already. And if credit now begins to contract there is a very real danger that we will collapse into a new great depression.
…
As long as credit grow rapidly, that makes the economy grow. However, the day always comes when credit can’t expand any further and then the new depression begins.
…
Now, credit is the new money. If they don’t prevent the credit supply from contracting then we will have a new depression. So the policy is to ensure that credit continues to expand. And now that’s what government debt is doing; increasing government debt is making total debt grow, otherwise we would have already collapsed into a debt deflation death spiral.
…

If this credit bubble pops the depression is going to be so severe that I honestly don’t think our civilization can survive it.

Consider what happens when someone loses their income stream. As a result, they are unable to pay their mortgage, put food on the table or live any semblance of the life they came to know while they were gainfully employed.

Our government, like any individual American, also has an income stream. That income is based on taxes, and in recent years, overwhelming borrowing. In the near future we will reach a point where we’ve taken on so much debt that our creditors will no longer lend us money. Because tax revenues are already dropping due to negative economic growth, the government will essentially be left with no income.

Like someone who loses their job, they will have no way of meeting their monthly obligations. They won’t be able to provide nutritional assistance, there will be no health care, and social security benefits will stop being distributed.

Our civilization would not be able to handle such a transition from an expansionary credit based economy where goods and services were readily available into a paradigm of credit contraction, supply shortages and destitution.

This is what is coming. There is no way to prevent – only to defer it until a later date.

That day will soon be upon us, and one way or the other life in America as we have come to know it will take a drastic turn for the worse. When civilizations transform in this way it often results in violence, starvation and bloodshed. Prepare for it, because it will be on our doorsteps soon enough.

Debt Overdose Drives Economic Debacle - Deflationary Depression Descends

Robert Prechter Tells Jeff Macke: 'U.S. Will Be Downgraded Again Treasury Bubble Will Collapse'

"You cannot spend your way out of a recession or borrow your way out of debt."

-- Ludwig von Mises

"There is no means of avoiding a final collapse of a boom brought about by credit expansion."
 -- Ludwig von Mises

The inimitable Will Rogers left us all this advice: "When you find yourself in a hole, quit digging."! Today we find ourselves in a deep economic hole due to a monetary system based entirely on debt - mountains of it! Rather than take old Will's advice, though, the politicians of today seem determined to outdo all political foes in terms of how much deeper we descend into a veritable quicksand of debt. When each new dollar issued must be backed, not by any tangible asset but by another dollar of debt - debt now owed with interest to the private bank issuing your currency, your problems are very real. When the response to any program or entitlement long ago ceased being "Can we afford it?" and has become "How much more to put on the tab?", the inmates completely control their spending 'asylum'!

No matter how large the bubble it always pops in the end, though the timing may surprise the blower! Even as the issuer of the world's reserve currency continues with all its might to try to breathe life into a moribund economy by blowing larger bubbles, its trading partners see the 'writing on the wall' and have begun direct currency exchange - eliminating the need to go through a third-party currency. Such actions only serve to hasten the time of reckoning and help the 'snowball' to gather momentum!

So, how much longer can the largest economic bubble in history last before an almighty pop is heard? No one knows exactly but I'll be surprised if it goes on for much past November, no matter who wins. Now you know the real reason behind never-ending wars and vanishing rights - readying for the riots!

Trampled Underfoot

Cuckoo in the Coal Mine

Too Much Debt: Our Biggest Economic Problem

WHO DESTROYED THE MIDDLE CLASS – PART 3

Disintegration: What It Looks Like When a Nation Collapses

Jim Rogers Explains Why We Are Going to Have
‘Financial Armageddon’

The Economic Collapse Are You Prepared For The Coming Economic Collapse And The Next Great Depression?

Where Does Money Come From? The Giant Federal Reserve Scam That Most Americans Do Not Understand

How is money created?  If you ask average people on the street this question, most of them have absolutely no idea.  This is rather odd, because we all use money constantly.  You would think that it would only be natural for all of us to know where it comes from.  So where does money come from?  A lot of people assume that the federal government creates our money, but that is not the case.  If the federal government could just print and spend more money whenever it wanted to, our national debt would be zero.  But instead, our national debt is now nearly 16 trillion dollars.  So why does our government (or any sovereign government for that matter) have to borrow money from anybody?  That is a very good question.  The truth is that in theory the U.S. government does not have to borrow a single penny from anyone.  But under the Federal Reserve system, the U.S. government has purposely allowed itself to be subjugated to a financial system in which it will be constantly borrowing larger and larger amounts of money.  In fact, this is how it works in the vast majority of the countries on the planet at this point.  As you will see, this kind of system is not sustainable and the structural problems caused by such a system are at the very heart of our debt problems today.

So where does money come from?  In the United States, it comes from the Federal Reserve.

When the U.S. government decides that it wants to spend another billion dollars that it does not have, it does not print up a billion dollars.

Rather, the U.S. government creates a bunch of U.S. Treasury bonds (debt) and takes them over to the Federal Reserve.

The Federal Reserve creates a billion dollars out of thin air and exchanges them for the U.S. Treasury bonds.

So why does the U.S. government go to all this trouble?  Why doesn't the U.S. government create the money itself?

Those are very good questions.

One of the primary reasons why our system is structured this way is so that wealthy people can get even wealthier by lending money to the U.S. government and other national governments.

For example, last year the U.S. government spent more than 454 billion dollars just on interest on the national debt.

Over the centuries, the ultra-wealthy have found lending to national governments to be a very, very profitable enterprise.

The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system.

But wait.

There is a problem.

Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created.

So where will the U.S. government get the money to pay that debt?

Well, the theory is that we can get money to circulate through the economy really, really fast and tax it at a high enough rate that the government will be able to collect enough taxes to pay the debt.

But that never actually happens, does it?

And the creators of the Federal Reserve understood this as well.  They understood that the U.S. government would not have enough money to both run the government and service the national debt.  They knew that the U.S. government would have to keep borrowing even more money in an attempt to keep up with the game.

That is why I call the Federal Reserve a perpetual debt machine.  The Federal Reserve was created to trap the U.S. government in an endlessly expanding debt spiral from which there is no escape.

And the Federal Reserve is doing a great job at what it was designed to do.  Today, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.

Another way that money comes into existence in our economy is through the process of fractional reserve banking.

I originally pulled the following simplified explanation of fractional reserve banking off of the website of the Federal Reserve Bank of New York, but it has been pulled down since then.  But I still think it is helpful in understanding the basics of how fractional reserve banking works....

"If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+...=$1,000)."

When you put your money into the bank, it does not say there.  The bank only keeps a relatively small amount of money sitting around to satisfy the withdrawal demands of account holders.  If all of us went down to the banks right now and demanded our money, that would create a major problem.

If I put 100 dollars into the bank and the bank lends out 90 of those dollars to you, now it looks like there are 190 dollars floating around.  I have "100 dollars" in my bank account and you have "90 dollars" that you just borrowed.

The new debt that you have taken on (90 dollars) has "created" more money.  But of course you are going to end up paying back more than 90 dollars to the bank, so more debt has been created than the amount of money that has been created.

And that is one of the big problems with our financial system.  It is designed so that the amount of debt and the amount of money are supposed to be perpetually expanding, and the amount of debt created is always greater than the amount of money that is created.

So is it any wonder that our society is swamped with nearly 55 trillion dollars of total debt at this point?

A debt-based financial system is unsustainable by nature because it will always create debt bubbles that will inevitably burst.

Are you starting to see why so many Americans are saying that we need to abolish the Federal Reserve system?

Our founding fathers never intended for our financial system to work this way.

According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is supposed to have the authority to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".

So why has this authority been given to a private institution that is dominated by the big Wall Street banks and that has actually argued in court that it is "not an agency" of the federal government?

Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing....

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

But instead, we have become enslaved to a system where government borrowing actually creates our money.

The borrower is the servant of the lender, and we have allowed our government to enslave us to the tune of nearly 16 trillion dollars.

There are alternatives to this system.  Things do not have to work this way.

Unfortunately, the vast majority of our politicians consider the Federal Reserve to be good for America and steadfastly refuse to do anything to change the status quo.

So if you are waiting for "solutions" to these problems on the national level you are going to be waiting for a very long time.

The debt problems that the United States and Europe are experiencing did not come into existence by accident.  They are the result of fundamental structural problems with the financial system.

A debt-based financial system is always going to fail in the long run.  Unfortunately, most Americans still do not understand this and so we will all get to suffer the consequences.

"It's The Debt Bubble, Stupid"

Money as Debt Part 3

“It’s the economy, stupid” was the catchphrase used the last time a sitting President was successfully unseated 20 years ago - 12 years before that a predecessor also left early, due to a flagging economy! As today's economy sputters and misfires, with an ever shrinking number grabbing most of the 'lion's share' of financial 'goodies' while the numbers who manage to hold on to real jobs dwindles rapidly, it remains to be seen whether the public will buy into the claims of economic recovery this time around. It is a little known fact that there is an equal number having full-time jobs (35 or more hours a week) to workers of employment age that are unable to find employment - about 100 million in either camp. By ignoring those who have given up looking the BLS is able to report a farcical unemployment rate!

Whether or not this administration will be turned out like earlier one-termers, we'll know before long! But a country that once led the world with top economic statistics now finds itself in the ignominious position of standing alone among developed countries with the highest percentage of low-wage jobs - one out of every four as compared with either France with 1 out of 9, or Italy with only 1 in every 12! The fact is that half of the workforce makes under $25,000 per year - a slave's wage in today's world!

But the real ticking time-bomb is the debt bomb that will soon explode what remains of the economy! Debt is really a subtle form of slavery causing the heavily-indebted to spend their whole lives running on a perpetual treadmill, as they work to pay back lenders whilst struggling to survive on the crumbs. Debt is also addictive - for both individuals and economies. Private and national debt have continued exponential growth in the last two decades - the huge overdose will lead to the death of the economy!

While most have been misled to believe the bubble can be inflated forever, this is far from the truth! As the bubble economy nears breaking point, there is little time left before it bursts. This will bring - not hyperinflation, but a full-on deflationary depression - to escape debt slavery, pay off debts now!

Shaky Economies

EPIC FAIL – PART ONE

Revisiting the Physical Risks of Debt

One Nation Under Debt With Endless Debt Slavery For All

There Is Not Going To Be A Solution To Our Economic Problems On The National Level

"If I wanted America to fail"

The Economic Collapse Are You Prepared For The Coming Economic Collapse And The Next Great Depression?

22 Red Flags That Indicate That Very Serious Doom Is Coming For Global Financial Markets

If you enjoy watching financial doom, then you are quite likely to really enjoy the rest of 2012.  Right now, red flags are popping up all over the place.  Corporate insiders are selling off stock like there is no tomorrow, major economies all over Europe continue to implode, the IMF is warning that the eurozone could actually break up and there are signs of trouble at major banks all over the planet.  Unfortunately, it looks like the period of relative stability that global financial markets have been enjoying is about to come to an end.  A whole host of problems that have been festering just below the surface are starting to manifest, and we are beginning to see the ingredients for a "perfect storm" start to come together.  The greatest global debt bubble in human history is showing signs that it is getting ready to burst, and when that happens the consequences are going to be absolutely horrific.  Hopefully we still have at least a little bit more time before the global financial system implodes, but at this point it doesn't look like anything is going to be able to stop the chaos that is on the horizon.
The following are 22 red flags that indicate that very serious doom is coming for global financial markets....

WE AIN'T SEEN NUTHIN' YET - MAJOR TURNING UNDERWAY

When Will America Collapse? Today's Bad News Provide A Timeline To Economic Collapse

“If the American people ever allow private banks to control the issue of their currency first by inflation then by deflation the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered... I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people to whom it properly belongs.” ― Thomas Jefferson

Though official government reports continue to reflect an improving and somewhat favorable picture of employment and other economic figures, most people live a different reality from the propaganda! As we enter a crucial turning point in world history, this is a topic that I will return to time and again. Over the coming months every effort will be made to assure the masses - the vast majority of whom either work or depend on fixed pensions to survive - that the worst is over and better days lie ahead. But the public picture of recovery bears as little resemblance to reality as the doctored images of the 'perfect' supermodel whose purpose is to sell as many buyers as possible on its latest beauty product! Neither you, nor the moribund economy will ever be able to live up to those unrealistic expectations!

Unfortunately though, while most people continue to be concerned about the threat of hyperinflation, keeping their guard up against similar blows to those which have so far come their way - they fail to notice that powerful left hook until it is upon them - the economy is about to have the air completely knocked out of it and spend what will seem to be an eternity flat on its back and gasping for oxygen! The only way out of the debt-induced, bubble coma is via a deep, drawn-out deflationary depression. There is no earthly power that can prevent a global unraveling which resumes in earnest in late 2012, neither ongoing trillions pumped in by the Fed, nor a stimulation plan financed by future generations of tax slaves. The giant hissing sound will continue to be heard until every bubble is totally deflated!

The politicians have a pretty good idea what lies ahead, but their concern is getting past November! While they distract the populace with the twin bogeymen of terrorism and the non-existent threat of a nuclear-armed Iran (supposedly less than a year away from 'the bomb' for almost two decades now) they prepare for the real war, soon to be underway against a populace that awakens to the reality of chronic joblessness and starvation, by passing draconian legislation and preparing detention camps!

Historical evidence is crystal clear that nations with government debts exceeding 100% of GDP have been unable to survive for very long before becoming bankrupt! The most powerful country of today recently crossed this crucial inflection point for federal debt which, by including unfunded programs guaranteed by the State (such as Social Security & Medicare) shows a true liability exceeding 500%! Set against the background of huge trade deficits and negligible savings, this is a recipe for disaster!

As the important 3-part article below reveals with stunning clarity, history repeats in regular cycles! We are right in the middle of one such 10 to 20 year cycle turn that began circa 2008. By the end of our great turning today's leading power will emerge a mere shadow of its former strength and glory!

Every great turning point has brought challenges for the many, but an opportunity for the prepared! Most will carry on as if the 'old' model still applies and pay dearly for trusting those who hold power. The wise will prepare now by paying off (most or all) debts, whilst getting ready to grab great deals!

The 15 Trillion Dollar Party

YOU AIN’T SEEN NOTHING YET – PART ONE

YOU AIN’T SEEN NOTHING YET – PART TWO

YOU AIN’T SEEN NOTHING YET – PART THREE

45 Signs That America Will Soon Be A Nation With A Very Tiny Elite And The Rest Of Us Will Be Poor

Economic Collapse . . . Then Police State Crackdown

The Federal Reserve From Creation in 1913 To Destruction in 2013

Posted on April 1, 2012

The Federal Reserve was created in 1913 to do four things which the FED is still engaged in today.  The Panic of 1907 was caused by speculators who used borrowed money to buy stock and by bucket shops which defrauded investors.  The Monetary Reform Commission  run by Senator Nelson Aldrich wanted an elastic currency so  the financial blunders of the 0.1% could be covered up by passing the costs onto the 99.9% through inflation. An elastic currency also allowed the costs of wars to be disguised  by inflation. The Federal Reserve also set up a fractional reserve banking system which permitted ten dollars to be loaned out for every one in deposit. This intentionally created an exaggerated credit cycle so bankers could profit from the wild swings in the prices of stocks and mortgages. And finally the Federal Reserve Note is an interest bearing currency which requires us to give the banks 500 billion dollars a year in interest payments for debts which are fictions created by a law passed in 1913. The Federal Reserve was designed to transfer our wealth to the bankers.
The Federal Reserve Act’s elastic currency made it possible for President Wilson to promise to enter WW I. Wall Street wanted to enter the war so they could bankrupt England, overthrow the Czar killing 60 million Russians in the process and set up Palestine as a Jewish colony to be protected by the British Army. This was similar to WW II. The Japanese Emperor had  promised to withdraw from China and to even become an ally against Stalin as early as 1936. The German General staff under Beck and Canaris sent two men in March of 1938 to negotiate a treaty with the English offering to arrest Hitler. This means that World War II from the Rape of Nanking to the atomic bombs dropped on Hiroshima and Nagasaki and from the invasion of Poland to the fall of Berlin need not have happened. That 58 million people died for nothing does not merit a footnote in the stories told by the victorious Allies.
After WW II the US gave north Korea to Joe Stalin so they could set up the Korean war to get anti-Communists killed while running America into ground. On 11-22-1963 President Kennedy was killed on the 53rd anniversary of the first meeting to create the Federal Reserve as a message to the voters  to leave the FED alone. JFK’s death also allowed Israel to develop the nuclear weapons he had opposed. It also allowed the US to be led into the Vietnam war so America could lose it while killing a generation of anti-Communists and anti-Globalists, That millions of people died in Korea and Indo-China and even more Unpayable Debts were piled onto America which  was very good in the eyes of bankers.
The Bretton Woods Conference of July 1944 was held by 44 Allies under the auspices of the UN. It tied all currencies to the US dollar. It also set up the IMF which most in the Third World and increasing numbers of Greeks, Irishmen, Italians and many other Europeans would agree are blood sucking imperialists. The IMF in recent years stole more than 20 billion dollars from the Irish people and has given nothing in return. That same conference also created the World Bank which for example forbade the Egyptians to develop a self sufficient agricultural system so it would be dependent on Imperial powers. The Bretton Woods system of monetary relations worked very well for the banks of London and Wall Street until August 15, 1971 when  President Nixon took America off the Gold Exchange standard.
Michael Hudson in his book Super Imperialism described how the US was funding its wars by inflating the supply of currency used to settle trade. Since WW II we have been getting real goods like cars and clothes from foreigners in exchange for increasingly worthless paper. When Hudson explained this to the Pentagon, a general said, “Wow. We are ripping people off.”
The Arab-Israeli war of October 6 to 25, 1973 was a prelude to the Arab Oil Boycott. Saudi Arabia decided to reduce oil production by 5% per month on October 17. On October 19, President Nixon authorized a major arms shipment and $2.2 billion in aid for Israel. In response Saudi Arabia declared an embargo against the U. S. This quadrupled the price of oil. Dollars can be used to pay taxes to the US government. After the Boycott dollars could also be used to pay for oil sales between countries neither  of which had a need to pay taxes to the American government. Henry Kissinger gave birth to the Petrodollar standard, The important points about Petrodollars are that the price of oil must be kept high so that excess dollars in the system do not circulate causing inflation and oil profits are plowed into US Treasury bonds. The Petrodollar Standard requires conflict in the Mideast to raise tensions and oil prices. It also requires banks like Goldman Sachs to use the derivatives market to buy and sell oil as many as 27 times from the time it gets pumped out of the ground until it arrives at a gas station. Of course higher oil prices do raise some production costs and cause some unemployment but Wall Street dies very well and nobody else matters.
Since the passage of  NAFTA in 1994 and the subsequent devaluation of the Chinese yuan, America shipped 50,000 manufacturing plants overseas. This forever made economic recovery of the real economy impossible. In 1996 the head of  CalPERS  (California Public Employees’ Retirement System) told Catherine Austin Fitts that there was no point in investing to rebuild America because the decision had already been made to take America down. Subsequently Catherine who used to be the managing partner at Dillon Read Investment bank  had a conversation with another high level funds manager. They had both independently come to the same conclusion. There was so much money being stolen from Americans by Wall Street that the only solution to the problem of missing pension funds, savings and retirement accounts was genocide.  Wall Street would have to kill tens of millions of Americans because the tens of trillions they stole could never be returned.
Lest anyone think bankers are dull but honest men please consider the testimony of a former DEA agent who said it was impossible to get Federal Reserve co-operation in money laundering cases against the Too Big To Jail banks. He said 750 tons of Federal Reserve  Notes had to be repatriated for just one case involving one bank. Transactions over ten thousand dollars require special reports to be filled out. A case involving 380 billion dollars  would have generated 38 million reports for ten thousand dollar transactions or 38 thousand at a million dollars each. It is forbidden to mention in the Controlled Press that Ben Bernanke and his predecessor Alan Greenspan are Jewish.
In 1999 the final two nails in the coffin of the world economy was driven by Wall Street and the politicians they owned. They repealed the Glass Steagall Act of 1933 which had protected depositors from the wild speculations of investment bankers by separating the two types of banks. This has now exposed the Too Big To Jail banks to 227 trillion  dollars in potential losses from the unregulated Credit Default Swaps market. Brooksley Born was Chairman of the Commodities Futures Trading Omission in 1999 when she attempted to regulate CDS. They are a hybrid between insurance and derivatives which are a bet on the future value of a bond or a commodity. She knew that world was headed to a train wreck because for example when a bank  sells a CDS guaranteeing the buyer from a loss in the value of a Greek bond no money has to be set aside to pay these potential claims. Some say the total notional value of the derivatives and CDS markets is 1.5 quadrillion dollars. The GDP of the entire world is only 60 trillion dollars, From 2008 to the end of 2011 Ben Bernanke created 30 trillion dollars to bailout bad decisions and frauds made by bankers all over the world. He has created additional trillions of dollars this year. There is no money set aside for these CDS  losses thanks to the intervention of four Jewish men who told Ms Born she was nor allowed to regulate CDS. The men were Alan Greenspan, Robert Rubin, Larry Summers (Samuelson) and Arthur Levitt. The only Bailout Bernanke ever had was to print dollars to infinity thus reducing the purchasing power of your dollars to zero.
In 2000 Alan Greenspan started raising interest rates and tightening the money supply early enough in the year to take the stock market down before election day so George W Bush could win the presidency and take America to war for Israel. This War on Terror was designed to last until America went bankrupt and lost WW III. The whole point of NAFTA was to make America’s supply lines stretch 8,000 miles to China on a dodgy credit card so America would be guaranteed to lose WW III and be unable to demand the return of the tens of trillions Wall Street had stolen.
On September 10, 2001 Secretary of Defense Donald Rumsfeld and the Comptroller of the Pentagon Rabbi Dov Zakheim admitted to CBS News that they could not trace 2.3 trillion dollars on DOD spending. Using the works of Catherine Austin Fitts, I estimate that the bankers are allowed to steal at least 3 to 4 billion dollars a week from federal spending which we peasants are not allowed to audit.
On September 11, 2001 four airplanes were electronically hijacked using the Command Transmitter System which remotely takes over airliners that had been hijacked. There had been no hijackings of US passenger jets for  many years prior to 911. The Armed Forces Institute of Pathology found no Arab DNA on  Flight 77 which allegedly hit the Pentagon. Robert Andrews, a former Green Beret, was the Assistant Deputy Secretary of Defense who commanded US Special Ops forces. He saw  a bomb go off that killed the auditors attempting to trace the  missing 2.3 trillion dollars. There were no Arabs on the 4 planes on the passenger and crew list published by CNN. Nanothermite which cuts through steel  girders at 5,200 degrees Fahrenheit (2,871 Celsius) in 2 seconds is only available at above top secret labs in the US and Israel. It was found in the dust at the World Trade Center in New York. The Towers were taken down by controlled demolitions.
America has killed millions of Iraqis and Afghans at a cost of 2 trillion dollars for no good reason other than Israel wanted them dead. Israel claims all the land from the Nile to the Euphrates which is presently occupied by 300 million Gentiles. Israel’s goal is to get Americans into one final war in the Mideast. It will be a genocidal attack from which America is intended to suffer a death blow. I need to point out that the purpose of the drones killing innocent civilians is to display American arrogance and contempt for the Muslims so that when the war does start the oppressed people of the region will kill every occupying soldier. This will justify the use of nuclear weapons to exterminate the enemies of Israel. After the genocide is over, those Americans who do not die from starvation and radiation or perhaps a plague can take their place as Debt Slaves to Wall Street. By the way, the Iranians do not have a nuclear weapons program.
We are in the final approach pattern to the planned destruction of the dollar and the enslavement of the American people. Ben Bernanke has said he will be printing even more money and that he will be buying agency paper (FHA, Fannie Mae) from the Hedge Funds at 100 cents on the dollar. The current real inflation rate just passed 12%. In 2 months the Hedge Funds will sell their bonds. They could invest their proceeds in the stock market hoping that Apple will go from 600 to 700 dollars.  Since interest rates on ten year bonds have gone up  and will likely continue to rise, both the stock market and existing bonds will go down in value. The only safe investment might be commodities and gold and silver bullion.  Inflation will pick up as higher fuel prices are passed through the supply chain, Foreigners will accelerate their flight from the dollar into bullion and commodities. This capital flight will spur inflation even further and send the stock market plummeting.
I am of the opinion that the generals and the admirals and the colonels and the naval captains will mutiny rather than commit suicide by attacking Iran.
I have heard several people of late say that things have deteriorated so much in America that the people who knew better but played along with the lies they were told  have seen the light. Now these people are finally admitting what the rest of us have known for some time. Our self appointed leaders are stark raving mad and will get us all killed.if we do not say No. The people who have woken to the Truth have not become violent yet. If the politicians ever do give the order to launch World War III by attacking Iran, the US military will muting and arrest everyone in the chain of command who signed off on the internationally recognized crime of preemptive war. This will have to include the bankers who stole tens of trillions of dollars and have committed treason as well.
The dollar will be dead and the economy will need resuscitation to prevent worldwide mass starvation. But at least we will have redeemed ourselves by saying No to launching World War III and killing a few billion people.

A Giant Debt Bubble Gets Ready To Pop

Addison Wiggin on an Empire of Debt and the Mother of all Bubbles

“The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered. ” ― Thomas Jefferson

There is only one way for a bubble (the end result of inflation) to meet its end - it must be deflated! Whether the bubble is made of soapy water or the largest mountain of debt the world has ever seen! And neither there is any way for either of these temporary phenomena to be coaxed into eternal life. Despite what the spin masters at the Federal Reserve (neither Federal nor possessing real Reserves) or their apologists in the Federal Government keep pretending in public, the trillions in debt became way too large to have the faintest chance of being repaid - and this happened a long, long time ago! Ever since that reality hit home, those at the controls have been engaged in a massive Ponzi scheme to delude investors into buying their debt and voters to keep running on the treadmill of false hope!

The reality is that the global debt bubble was already filled with holes since the 2008 credit collapse! No matter how much 'hot air' continues to be pumped into its center by the world's central banks and governments, the bubble - which has become structurally unsound - will never be made whole again. This is why hyperinflation, feared by many who know that we are in big trouble, is not the problem! Next up is a deflationary depression that will reduce the world financial system to a pile of rubble!

Starting in late-2012, early-2013 that giant popping sound heard worldwide will be the implosion of the century-old central-planning system of central banking. Delayed well past its 'sell-by date' by its misled proponents who pay lip service to free markets, trusting rather in the discredited economic paradigm of Keynesianism - the populace will experience the full force of a squeeze unlike anything ever imagined. Widespread hunger, homelessness, debt slavery and world war are the likely result!

The days of 'pretend' have come to an end. The 'Emperor's' nakedness is now exposed for all to see! The world empire of debt is on the verge of falling and likely along with it today's mightiest empire! Read on about what no politician dares admit and start preparing today - get rid of most or all debt!

We Can Stop The Machine, If We Want To

Society's Five Stages of Economic Collapse
The Destruction of The US Economy is Assured

When the Deflation Tsunami Hits, Losing the Least is a Winner

20 Economic Statistics To Use To Wake Sheeple Up From Their Entertainment-Induced Comas

America is BANKRUPT!

EXTEND & PRETEND COMING TO AN END

Posted on February 27, 2012 by JimQ

The real world revolves around cash flow. Families across the land understand this basic concept. Cash flows in from wages, investments and these days from the government. Cash flows out for food, gasoline, utilities, cable, cell phones, real estate taxes, income taxes, payroll taxes, clothing, mortgage payments, car payments, insurance payments, medical bills, auto repairs, home repairs, appliances, electronic gadgets, education, alcohol (necessary in this economy) and a countless other everyday expenses. If the outflow exceeds the inflow a family may be able to fund the deficit with credit cards for awhile, but ultimately running a cash flow deficit will result in debt default and loss of your home and assets. Ask the millions of Americans that have experienced this exact outcome since 2008 if you believe this is only a theoretical exercise. The Federal government, Federal Reserve, Wall Street banks, regulatory agencies and commercial real estate debtors have colluded since 2008 to pretend cash flow doesn’t matter. Their plan has been to “extend and pretend”, praying for an economic recovery that would save them from their greedy and foolish risk taking during the 2003 – 2007 Caligula-like debauchery.
I wrote an article called Extend and Pretend is Wall Street’s Friend about one year ago where I detailed what I saw as the moneyed interest’s master plan to pretend that hundreds of billions in debt would be repaid, despite the fact that declining developer cash flow and plunging real estate prices would make that impossible. Here are a couple pertinent snippets from that article:

“A systematic plan to create the illusion of stability and provide no-risk profits to the mega-Wall Street banks was implemented in early 2009 and continues today. The plan was developed by Ben Bernanke, Hank Paulson, Tim Geithner and the CEOs of the criminal Wall Street banking syndicate. The plan has been enabled by the FASB, SEC, IRS, FDIC and corrupt politicians in Washington D.C. This master plan has funneled hundreds of billions from taxpayers to the banks that created the greatest financial collapse in world history.

Part two of the master cover-up plan has been the extending of commercial real estate loans and pretending that they will eventually be repaid. In late 2009 it was clear to the Federal Reserve and the Treasury that the $1.2 trillion in commercial loans maturing between 2010 and 2013 would cause thousands of bank failures if the existing regulations were enforced. The Treasury stepped to the plate first. New rules at the IRS weren’t directly related to banking, but allowed commercial loans that were part of investment pools known as Real Estate Mortgage Investment Conduits, or REMICs, to be refinanced without triggering tax penalties for investors.

The Federal Reserve, which is tasked with making sure banks loans are properly valued, instructed banks throughout the country to “extend and pretend” or “amend and pretend,” in which the bank gives a borrower more time to repay a loan. Banks were “encouraged” to modify loans to help cash strapped borrowers. The hope was that by amending the terms to enable the borrower to avoid a refinancing that would have been impossible, the lender would ultimately be able to collect the balance due on the loan. Ben and his boys also pushed banks to do “troubled debt restructurings.” Such restructurings involved modifying an existing loan by changing the terms or breaking the loan into pieces. Bank, thrift and credit-union regulators very quietly gave lenders flexibility in how they classified distressed commercial mortgages. Banks were able to slice distressed loans into performing and non-performing loans, and institutions were able to magically reduce the total reserves set aside for non-performing loans.

If a mall developer has 40% of their mall vacant and the cash flow from the mall is insufficient to service the loan, the bank would normally need to set aside reserves for the entire loan. Under the new guidelines they could carve the loan into two pieces, with 60% that is covered by cash flow as a good loan and the 40% without sufficient cash flow would be classified as non-performing. The truth is that billions in commercial loans are in distress right now because tenants are dropping like flies. Rather than writing down the loans, banks are extending the terms of the debt with more interest reserves included so they can continue to classify the loans as “performing.” The reality is that the values of the property behind these loans have fallen 43%. Banks are extending loans that they would never make now, because borrowers are already grossly upside-down.”

Master Plan Malfunction

You have to admire the resourcefulness of the vested interests in disguising disaster and pretending that time will alleviate the consequences of their insatiable greed, blatant criminality and foolish risk taking. Extending bad loans and pretending they will be repaid does not create the cash flow necessary to actually pay the interest and principal on the debt. The chart below reveals the truth of what happened between 2005 and 2008 in the commercial real estate market. There was an epic feeding frenzy of overbuilding shopping centers, malls, office space, industrial space and apartments. During the sane 1980’s and 1990’s, commercial real estate loan issuance stayed consistently in the $500 billion to $700 billion range. The internet boom led to a surge to $1.1 trillion in 2000, with the resultant pullback to $900 billion by 2004. But thanks to easy Al and helicopter Ben, the bubble was re-inflated with easy money and zero regulatory oversight. Commercial real estate loan issuance skyrocketed to $1.6 trillion per year by 2008. Bankers sure have a knack for doing the exact opposite of what they should be doing at the exact wrong time. They doled out a couple trillion of loans to delusional developers at peak prices just prior to a historic financial cataclysm.

The difference between bad retail mortgage loans and bad commercial loans is about 25 years. Commercial real estate loans usually have five to seven year maturities. This meant that an avalanche of loans began maturing in 2010 and will not peak until 2013. With $1.2 trillion of loans coming due between 2010 and 2013, disaster for the Wall Street Too Big To Fail banks awaited if the properties were valued honestly. A perfect storm of declining property values and plunging cash flows for developers should have resulted in enormous losses for Wall Street banks and their shareholders, resulting in executives losing not only their obscene bonuses but even their jobs. Imagine the horror for the .01%.

The fact is that commercial property prices are currently 42% below the 2007 – 2008 peak. The slight increase in the national index is solely due to strong demand for apartments, as millions of Americans have been kicked out of their homes by Wall Street bankers using fraudulent loan documentation to foreclose on them. The national index has recently resumed its fall. Industrial and retail properties are leading the descent in prices according to Moodys. The master plan of extend and pretend was implemented in 2009 and three years later commercial real estate prices are 10% lower, after the official end of the recession.

Part one of the “extend and pretend” plan has failed. Part two anticipated escalating developer cash flows as the economy recuperated, Americans resumed spending like drunken sailors and retailers began to rake in profits at record levels again. Reality has interfered with their desperate last ditch gamble. Office vacancies remain at 17.3%, close to 20 year highs, as 12.3 million square feet of new space came to market in 2011. Vacancies are higher today than they were at the end of the recession in December 2009. The recovery in cash flow has failed to materialize for commercial developers. Strip mall vacancies at 11% remain stuck at 20 year highs. Regional mall vacancies at 9.2% linger near all-time highs. Vacancies remain elevated, with no sign of decreasing. Despite these figures, an additional 4.9 million square feet of new retail space was opened in 2011. The folly of this continued expansion will be revealed as bricks and mortar retailers are forced to close thousands of stores in the next five years.

It is clear the plan put into place three years ago has failed. Extending and pretending doesn’t service the debt. Only cash flow can service debt.

Now What?