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What Happens When The Number Of Poor Americans Goes To 280 Million?
But suppose the Petrodollar system ended in 2013 and everyone had to buy oil with something other than dollars. Prices will double as the more than 50% of currency held outside the US is dumped. There are currently 100 million poor Americans. I estimate 280 million Americans will be at or near poverty before the end of 2013 if we do not reform the system.
Let me explain the rise and the fall of the Petrodollar.
After WW II the US dollar was as good as gold in international trade. But America was overpopulated by design and had to begin importing raw materials and now has to import 70% of its oil and is even a net importer of food. This means America has had declining wages at a time when it spends more and more overseas on wars it never needed. In 1971 America went off the gold exchange standard. Henry Kissinger organized the Arab-Israeli war of 1973 and the subsequent Arab oil boycott which quadrupled oil prices. But the Arabs had to agree to only take dollars for oil and to buy US Treasury bonds with those dollars. This increased demand for dollars though at a much higher price for gasoline. This allowed America to wage wars for Israel.
That system was challenged by Iraq and Libya and now by Iran. Iraq and Libya threatened the US dollar and are gone. Iran has no nuclear weapons program. The only threat they have made is against the dollar whose time has gone. Iran has formidable defenses and would destroy the Persian Gulf fleet, US Central Command and the US economy within 5 minutes of an attack. But even the United Arab Emirates and Saudi Arabia are selling oil for Chinese yuan. James Dale Davidson has been hyping the claim that the Petrodollar standard will collapse within 2 months. It might not be that quick. But this confrontation with Iran has been going on for too long. The entire world outside the US knows the clash is over dollars and not nuclear weapons. And the quickest way for the world to put an end to these wars is to dump dollars.
Ben Bernanke clearly is campaigning for Romney because he is not printing dollars by the tens of trillions to bail out Europe and to save Obama by boosting the domestic economy. I think Bernanke will print obscene amounts of dollars just before election day which will be in time to save European and London banks but not in time to help Obama. Of course Hyperinflation will begin soon after election day and everyone in the world will have to save themselves by dumping dollars. When the dollar does begin to go, it will take less than 90 days to disappear.
There are 113,146,000 households in the US. 20% have incomes above $88,000 but most of those are two income families. Clearly 80% of all Americans (248 million) will soon have pretax incomes below the poverty line. But let’s take a closer look at the after tax incomes of those top 20%. Recently the top 20% paid an average 23% in federal income taxes but that does not include state income taxes, property taxes and fees like car registration and mandatory car and now health insurance. So a two income family of four with a gross income of $100,00 pretax has a disposable net income after Social Security and Medicare deductions, federal and then state income taxes of $70,000. And from this net after tax income our married couple will have to pay property taxes, car registration, school fees, car insurance and increased health insurance fees. If they are lucky, they might have $62,000. Now let’s divide their after tax income by two to adjust for Hyperinflation. Not good. They are precariously near the poverty line with local, state and federal officials busily scheming to lay more fees on them to balance their budgets.
It can and will get a lot worse for those top 20% of income earners.
The Dallas Fed index of general business activity fell dramatically indicating that the U.S. economy is contracting. The US lost more than 220,000 small businesses in the recent recession. And a two income family will be hit hard if one parent loses a job. Total government (i.e., the sum of state, local, and federal) employment has decreased by over 580,000 jobs since the end of the recession, A lot of the people in that top 20% have government paychecks. Even they are losing jobs as the economy contracts.
And the economy will contract even further and faster than most imagine. The Gross Domestic Product measures the total output of an economy. The GDP = Consumption + Investment + Government spending or GDP _ C+ I + G. Currently the GDP is 15 trillion dollars. But, if foreigners stopped funding our deficit of 1.4 trillion dollars, we would have to balance the federal budget and contract GDP by 1.4 trillion overnight. To cut 1.4 trillion dollars just eliminate defense spending and Food Stamps and Medicare and you will be a few hundred billion dollars shy of your goal. To balance our trade deficit all we would have to do is to raise the price of a gallon of gas to twelve dollars and double the price of food. Of course that will put 80% of all Americans into abject poverty unable to buy imported oil, food, clothes, toys and anything at all for that matter.
You say these are nonsense numbers. I agree. My point is that you will have no future other than mass starvation, daily food riots and armed gangs roaming the streets of America unless you have Debt Cancellation. It was the increase in debt that lowered our wages and greatly increased unemployment. So it is past time that we ended the practice of allowing bankers to charge us interest on money they created from nothing.
Source (VideoRebel's Blog)
Notes: These first two articles are about Debt Cancellation.
Video: Michael Hudson, Fictitious Capital And Debt Cancellation
What Real Debt Cancellation Combined With Pension And Health Care Reform Looks Like Part II
This next article explains why war against Syria and Iran will be a disaster for America and Israel.
Time Is Running Out For The Israeli Empire
The final article explains how we are being abused by the aristocrats of Wall Street.
Catherine Austin Fitts On Genocide And The Looting Of America
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Comments
Re: What Happens When The Number Of Poor Americans Goes To...
There are many things about this article that I disagree with. To explain them all would require a separate post.
However I agree with its last sentence, which is perhaps the article's overall point...
"It is past time that we ended the practice of allowing bankers to charge us interest on money they created from nothing."
Yes indeed. Even if you do not have any debt, you are nonetheless being strangled by an economy that is based on paying the bankers who create money from nothing. It has always been this way, but now it is absolutely total. In the 1960s the USA went to the moon. People dreamed about exploring space. (To cite a random example of what mankind used to do.) Today mankind does nothing but serve the bankers, who contribute nothing to society. The banker parasite has all but killed the host.
Yes, most of the top bankers are Jews, but even without Jews the system would strangle us. The debt system is essentially Talmudic, with or without Jews.
The debt game fuels the growth imperative. The more we extract resources, and pollute the environment, the more we are forced to accelerate the extraction and pollution. We must "grow" in order to keep pace with the debt. But the more we grow, the more debt we incur. We are running on a treadmill with a crust of bread dangled before us. The faster we run, the farther away the bread is.
Debt is like adrenalin. A tiny bit of credit (adrenalin) can spur the body politic. But credit is debt. Like adrenalin, it leaves a residue. Too much adrenalin (credit / debt) causes damage. Eventually adrenalin becomes lethal. Thus we must take more and more adrenalin (debt) to keep going.
People who defend this system are quite literally insane. The ship is sinking, but the lying economists say all is well. We are in a "recovery."
Another way to look at this is that modern industrialized societies create physical pollution as waste matter, which is now poisoning us all. Modern industrialized societies also create massive debt as a form of pollution that is likewise poisoning us all. Things like the Fukishima nightmare are fueld by the profit motive, which always exists, but the motive is greatly accelerated by the debt game.
Re: What Happens When The Number Of Poor Americans Goes To...
(1) Regarding the Video Rebel’s bog post titled, “Michael Hudson, Fictitious Capital And Debt Cancellation,” the Video Rebel says this…
“Central banks are pumping money into the banks to make it appear that they are solvent so banks can pay on the loans they borrow from other banks. Michael Hudson says the Central banks like the Federal Reserve want to eventually cancel debts for the banks so the 1% lose nothing. But increased government debt will not be cancelled as it will be pushed onto the 99%. This will allow the 1% to keep everything they have stolen from us.”
The only reason the USA has a national debt is that the US government borrows the nation’s currency from private bankers, instead of printing the nation’s currency for free. The national debt could be instantly erased if we removed the private central bankers, and reclaimed the power to create money. I could explain this if anyone is interested.
(2) “Dr Michael Hudson defined fictitious capital as a loan that cannot be repaid because the collateral is not there.”
An elegant definition. I like it.
“Fictitious theories of economics are driven by greed.”
Exactly. But the greed is not limited to the banker parasites. Greed is selfishness, and selfishness infuses every moron who defends the current system, whether the moron is a rich banker or a poor peasant.
“Dr Hudson says that cutting wages 30% is the goal of Obama and Bernanke.”
Thus, their goal is to sustain the Depression. A Depression simply means that the middle class disappears. Depressions make rich people even richer.
Incidentally, a Depression lets us easily identify the specific individuals who are in the One Percent. If a Depression causes you to become even richer, then you are in the One Percent, regardless of how much money you actually have. You favor an even worse Depression.
For example, Depressions cause prisons to swell with inmates, thereby increasing the profits of people who own private prisons. Thus, the owners of private prisons are among the One Percent, regardless of how much money they actually have. They favor an ever-worsening Depression.
“Hudson sees the invasion of Libya as part of a strategy to deny oil to emerging industrial powers in Asia.”
Agreed. Not to deny oil per se, but to control the oil supply, and thereby control the emerging powers. So far, China allows the USA to push China around in places like Africa, but China will now allow this forever. One day there will be a small triggering event that will surprise the masses. The triggering event can be anywhere, even Antarctica, and it will seem like a trivial reason to go to world war. But it will be real.
“Ending the dollar debt system is the only way foreigners can vote to exit the threat of nuclear war.”
Actually, it will increase the threat of nuclear war, since the Western One Percent will do anything to defend their tyranny. The One Percent do not care if they destroy the planet. They are mindless viruses. The system makes them so.
“Collapses come at a break point where payments cannot be made. The basic principle is that ‘Debts that cannot be paid will not be paid.’ Breaks in the chain of payments cannot be predicted. But we do know that the collapse will be forthcoming soon enough.”
Debts that cannot be repaid with money or assets are paid with human energy. For example, I cannot pay money to the bankers, but I can slave for them in sweatshops. The system will break when the slaves have no food, and therefore cannot work in the sweatshops.
The bankers’ solution will be a world war, which will reduce all nations to police states, and will regiment the masses. The bankers will institute a command economy, in which everything and everyone serves the war effort. The course of world wars is not entirely predictable. A world war could finish the bankers.
“I am of the opinion that the US military knows that Israel did 911, and the Israelis have set a date certain for the destruction of America in WW III. The Israelis must have known there would be a day when the public would realize they did 911, and made preparations for that day.”
Video Rebel implies that Israel controls the USA. I say that Israel and the USA are essentially the same entity. One does not “control” the other. When the USA goes down, then Israel will go down with it, unless Israel can convince China to becomes Israel’s new host. If the Jews are not able to do this, then Jews will be expelled from Palestine, and Arabs will occupy all (formerly) Jewish houses. I regard this as inevitable.
“If the bankers wanted Americans to win WW III, they would not have passed NAFTA which sent our industrial base and 12 million jobs overseas.”
The bankers are globalists that owe allegiance to no country. Hence, bankers are essentially Talmudic.
“The DHS and the bankers plan to send 25 to 30 million Americans to FEMA concentration camps.”
Yes, the inmates will serve the war effort when we go to world war. Our choice will be to go to combat, or go to the FEMA work camps. This will not be quite as bad as it sounds. The slaves will have housing, some degree of medical care, and (marginally edible) food. However they will remain confined to the work camps for reasons of “national security.”
“I am assuming that the US military will have to mutiny and refuse to attack Iran and Syria, as that would be suicidal.”
No. There is no need for a direct military attack. The West uses its terrorists to sustain civil war, which is destroying Syria, and will do the same with Iran. Libya was bombed because Libya has less than 6 million people, most of which are concentrated in a handful of coastal cities.
“The military must realize the bankers want us to lose WW III so we cannot demand the return of the tens of trillions of dollars they stole from us.”
There is no need to demand the return of money. We simply frieze (i.e. eliminate) the banks accounts of the rich. Then we issue debt-free money as a society.
As for military personnel, they do whatever the bankers pay them to do. They will not grow a moral conscience, or a sense of patriotism. On the contrary, they will go deeper into their lie, so they can cope with their own madness. The more they realize that they are fighting only for the rich, the more they will resort to denial. They will escape into the fantasy that they are fighting for “freedom and democracy.”
Police personnel are the same. The more they are enslaved by the bankers, the more they champion the bankers by brutally attacking citizens.
Membership in the military or police is like membership in a cult. The more insane the cult, the more its members fanatically defend the cult.
So let's give up the fantasy that the military will miraculously grow a conscience. The military never has before, and never will.