Yesterday the Fed decided to buy more debt in order to get the country back on its feet. It will buy $40 billion of mortgage debt per month for the foreseeable future until the country starts adding more jobs.
This new promise of free money was met with cheers by Wallstreet investors and the promise of more heroin – er, I mean quantitative easing – blasted the stock market off like a kid on a sugar high.
Whew! Just in time too because the huge increase in jobs by the last two QEs was just beginning to wear off.
I just don’t see how it can work ya’ll. Maybe I’m some dumb hick living up in Maine, but like I said before: If I tried to run my finances the way the country does I’d have been locked up a long time ago. I’d have bought a new Lamborghini, a new high rise in downtown Manhattan, threw outrageous parties, and basically lived the lifestyle of the rich and famous (is that a tv show?) and paid for it out of my check book. Just because there’s no money in that account wouldn’t cause concern. Why? Because I’ve got more checks, dummy! Sheesh! As long as I have blank checks I’m good to go. Right?
Well, it seems to me that eventually this all going to catch up to us. At some point the debt is going to come due and someone, somewhere, is going to say, “Pay up,” and when we can’t the proverbial shit is going to hit the fan.
At some point Americans are going to feel what it’s like to have austerity measures. I’m not talking not being able to take your dog out for a pet grooming and getting your nails done. I’m talking about those who are living on the government dole suddenly finding out that Uncle Sugar ain’t gonna be there with another check and now they’re on their own. That’s austerity.
We’re going to have to cut back on the riches we take for granted. No more brand new houses and cars we can’t afford. No eating out all the time because we don’t feel like cooking. No cable tv because that money is going to be used to buy food that the government is no longer handing out. That’s austerity.
Finding out the government will no longer take care of you in your old age because that money has gone to pay the country’s bills. That’s austerity.
The developed nations – those who have been living above their means – are eventually going to feel the sting of doing without things we’ve become accustomed to. I don’t know if there will be a complete breakdown of society, but I can certainly see things getting tight for people who aren’t used to going without.
It’s possible that I’m wrong and that another round of QE is just what this country needs to get out of debt. If QE3 turns the ship around I’ll be the first to say, “I was wrong and I’m here to eat a little crow for Ben and the government,” but I don’t think I have to worry about that.
What do you think?
Sound off below!
-Jarhead Survivor
wealth cannot be created it must be produced.
Obama is a communist , they seriously believe that it can be created .
T. R. & Calamity Jane,
Watch this 14 minute video – it is very clear who Obama is and … who he is not.
http://www.youtube.com/watch?v=tZb134WAErg&feature=related
Remember my silver post?
http://www.shtfblog.com/silver-prices-are-low-buy-now/
That day at the beginning of last month silver was about $28 a troy ounce. Right now it’s trading at $34.50. Where else would you have gotten a higher % return in such a short amount of time?
I read that, man.
I literally remember when silver was selling at $6 an ounce in the 1990′s. I was a kid, and numismatist, so I kept track of that sort of thing. It is clearly and egregiously over-valued right now… just like the housing market was, and like the dot-coms before that.
Anyone with $100k in silver (bought at 2011 prices and buried in mason jars in his leach field by moonlight) better damned well hope that the world ends toute de suite if he needs to retain that value. Otherwise: sellbabysell!
What has gone on in the precious metals market is inexcusable.
I sold all my silver at $49+ per ounce! It hit almost $50 an ounce in 1980 and now last year. Wonderful.
PS – you cannot eat silver nor gold. If you think the end is near store food and bullets. Can you even imagine what a 50 shot pack of .22s will be worth? Up to 50 varmints of protein! Wow!
Only if you SELL it will you realize that rate of return.
One of my clients told me to buy Apple decades ago when it was $12 per share. I didn’t buy it & within 3 weeks it dropped to $9, thus making me a genius. Imagine how much that $10,000 investment would be worth today when adjusted for inflation & the number of times the stock split? Yes, I’m quite the genius …
Silver ain’t Apple. Hardly anything is, actually.
Silver, in fact, has a use value just like housing. It will drop to the price of its use value as soon as people stop buying it for its imagined, value-holding, properties… just as happened with housing. The use value for silver is a hell of a lot closer to $6 an ounce than it is to $35 an ounce.
There’s no law against believing in magic, though. Knock yourself out.
Believing in magic – cute, very cute however, those were unrelated stories – I guess it was Apples and …. Silver?
I agree with you about silver. Before you were born silver went from $11 per oz to $50 per 0z thru speculation orchestrated by the Hunt brothers. Silver fell & fast, along with Bunker Hunt.
http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
The housing drop is a different matter. The crash came from improper qualifying of borrowers being put into adjustable rate or short term fixed rate mortgages. When the knock came on the door, they had no scratch to pay the piper.
In 1980 mortgage interest hit 18-19%, house buying slowed to a crawl but the values did not diminish anywhere close to recent history. What’s funny is most all metropolitan markets real estate values have gone down BUT rents have remained relatively constant.
Moral – smart money buys real estate today. Low interest rates, plenty of renters & the housing may dip a maximum of 10% more but the upside is huge. I bought 13 houses in 1996 with the same scenario, sold them 8 years later for a astronomical return on investment.
Oh, I’m sorry if I misunderstood you.
It seems that we are in agreement: buy real estate today; buy silver in 1990.
You can’t neglect the fact that people paid more for their houses than they were worth because of speculation though. That was the extent of my analogy.
No question – people paid way, way too much for their homes, banks lent the money with poor standards for qualifying & created the cycle.
My family and I are a few months from being Debt Free(thank you Dave Ramsey) maybe its bad of me but, I am of the mind set to let the gove keep trying to buy ourselves out of debt just a while longer: long enough to get me and my own situated for when it HTF. We are not directly getting money from the gov, BUT my job is in the medical field and a HUGE percentage of our case load comes from Medicaid patients, so I am worried about by income once things go to Hades. So for now I hope it works and plan for when it does not.
I recomend following your government’s lead. Max-out all your credit cards, max-out your home equity for a loan, get an advance from your boss (if you have a job), buy as much gold as you can and bury it somewhere secure.
Once the SHTF, declare bankruptcy, deny everything and sit tight until the ‘heat’ is off.
Done!
When exactly is the shit going to be hitting the fan? My creditors are asking.
Who cares? I’m bankrupt, and all the gold is buried under…..
Underwear Tim? Damn it I fell for the oldest joke in the book!
Under wear?
We are soooooo !#$%&*! doomed…..
We’re all gonna die!
I mean that. It’s just a matter of time, really.
We need to get our pride back and get real . Build things here and build them to last , cut automobile production and importation by 2/3 s , seriously , there are 3 cars ( or more ) to every man woman and child in the US ……………how many more cars do we really need ? We need to also up the building code standards ……..no more chicken wire and stucco slapped together .You get the picture .
The definition of insanity – commit the same action and expect a different result. Yes, very sad indeed. The REALLY sad thing is that the population just votes in the same congress critter over and over . . .
I don’t know why Obama gave us all this goddamned debt. Wish we could go back to 2007 when we didn’t have any debt.
Those were the days, my friend.
I’m not an Obama fan whatsoever but the problem was ready to explode before he took office.
Obama has NO leadership experience and NO political experience and NO business experience – very important distinctions to understand.
Prior to being our president, he could never, ever get hired into any upper management position, let alone CEO at any Fortune 1000 company because of his lack of experience yet, he is the leader of the US? That makes no sense.
He was played like a marionette, strings in all. He has no clue what to do other than TRY to be some kind of a leader but has no developed character.
Too many Americans bought the lie & the fault for our debt rests upon the voters, not Obama.
Yeah, I was being sarcastic.
“SO-o-o-o….., Fannie, the gov’t is buying mortgages from banks”? “That’s right, Freddie, for the foreseeable future”. “How long will that be, Fannie”? “Monthly………………………………………………………………………………”. “(In Forrest Gump voice) I’m not a smart man, Fannie, but I know what stupid is. Stupid is as stupid does. And that’s all I have to say about that”. Speaking of box of chocolates. Some of us remember penny candy and nickel cany bars. Back when a penny and a nickel could buy stuff. Hmm about what a dollar can buy on sale today. Thatks when you realize things don’t cost more as much as the money is worth less. Those silver coins and coppers and nickles will be buying groceries again soon.
Soon you will have to put a dollar in gum ball machines …. and get no change – hmmmm, sounds like Obama.
Spot on, Jarhead. I hope we’re both wrong but I got this feeling…
This will not work.
The FED has said this year that its actions have not increased employment, yet yesterday it used just that excuse to keep spending.
Much like the ECB earlier this week and China, the FED has gone all in on spending forever until a real crash comes and it will, it just may be pushed off another year.
The good news is you have more time to prepare, the bad news is things are going to be much worse now when the crash comes, but it shouldn’t be suprising.
In 800 years of financial markets, not one time has the governments done anything to prevent a market crash; lookd like we are doing the same.
Our money used to be backed by gold and silver, now it’s going to be backed by mortgage bonds? Jesus H Christ, talk about a recipe for collaspe!
After all the toxic assets from the 2000′s blew up in 2008, you would think that reinflating the “housing bubble” would be off the table, but not with this set of clowns running the show.
Ronald Wilson Reagan fixed a similar economy in TWO YEARS! (Using supply side economics) Cut taxes, cut spending, let America’s economy free to grow.
Newt Gingrich balanced the budget in the 1990′s with supply side principles.
As Regan used to say, “The business of America is Business”!
Mark Steyn, who fills in for Rush now and again, had a book out last year called “After America”. In it he plays out what will happen to the U.S. if we continue to spend like they are doing. He then looks at what the World will be like “After America” is gone. It’s a scary read if you can find a copy.
How many years do we have left?
Anybody read about the Weimar republic?
http://en.wikipedia.org/wiki/Weimar_Republic
“In 1919 one loaf of bread cost 1 mark; by 1923 the same loaf of bread cost 100 billion marks.”
Actually, I took an entire class on the Weimar Republic in graduate school. Yes, there was massive inflation in that historical context. Did you read about the 80 years of economic history since the end of that circumstance? There is no analogy to be had between the Weimar Republic and the situation described by Jarhead.
“If I tried to run my finances the way the country does I’d have been locked up a long time ago.”
Fortunately the way finance works for a country of 300M people isn’t the same as how it works for a person or family. Unfortunately, that doesn’t mean what we’re doing will work. QE3 will leave us worse off in the long run. But, a handful of the super rich will be even more super rich!
What we need to do is get wages up so working class folks can get out of debt and have some cash to spend. QE3 will not do this.
Retraining for a better, higher paying job, at your local community college will do this. The Obama admin has done some work in this area, but not nearly enough.
Making it so that unemployed people who have marketable skills, but can’t sell their house and move to an area where they can put those skills to work would help. In other words, rather than buying up bad mortgage debt from banks, buy it up from the people that are living in the house. You’re buying it up either way.
“Retraining for a better, higher paying job, at your local community college will do this. The Obama admin has done some work in this area, but not nearly enough.”
Retraining for a better, higher paying job won’t work if there aren’t any jobs for you! What will work for now is to get the people with money (aka “The Rich”) to invest in production jobs in the USA. The incetive to do that would be going easy on taxation.
“But the rich just get richer!” Yup, and you get a job making you richer too. The only way to make people risk their fortunes is to give them a higher chance of making money than losing it. If the reward outwieghs the risk than they’ll risk it, creating jobs in the process.
I think there is a much more sinister plan afoot. First the prices of houses are thrown in the toilet then, the Federal Reserve (a private corporation) buys them up at wholesale prices screwing the American middle class out of their equity. When it all goes to hell in a handbasket we will need to bail them out with more taxpayer money, then they will sell them off at a handsome profit sometime down the road. A perfect scheme for the banksters in charge.
Solar flare’s going to wipe out the international banking system in December anyhow. It’s all good.
Just make sure you stock up on chickens, heirloom seeds, and 5.56… oh, and get some silver too… maybe a small herd of goats.
Who will there be left to buy them?
no man, you won’t be able to sell anything. heirloom seeds grow stuff that food eats…
These replies start to move. I was asking who will be left to buy the houses that the “evil” bankers will end up owning. Basically they PROBABLY won’t foreclose on them. There will be too many. As for the heirloom seeds “they grow stuff that food eats”. Then Jim says “Amen”. Anyway I have a processor out in the field that turns grass into meat. Is that what you mean when you say the seed grows what FOOD eats? As in, ” some of my favorite foods are vegetarians”. BTW when did banks stop using savings accounts to lend money for mortgages and business loans that turned into interest on said savings? Sounds like sound finances to me. Not this borrowing monay from da Fed and lending it back out at a higher rate…….. What a mess. 16 TTTTTTTTTrilion there ain’t enough money in the world.
yeh, that’s what i was talking about.
it was reliably proven during the potato genocide that irish are unable to subsist by eating grass. since DNA science strongly suggests that we’re human also, i believe i can generalize that concept to “people”. while People can’t subsist by eating grass, sheep, goats, and cattle do very well on a diet of grass. free ranging chickens, and other fowl, routinely eat worms and bugs, whereas most people would rather starve if they had to. fortunately, food eats many things we wouldn’t.
Amen.
Obama is the curse America deserves for 40 years of violating common sense and God’s law. Don’t forget both McCain and Obama sat in on TARP and Bush spent $350 million of it and left $350 million for Obama to spend as the next president.
I encourage all atheists, democrats, and abortion promoters to vote for Obama 2012 because you surely deserve him and his deceiving demonic spirit.
Nice to see in a nation of Christians, founded by the ten tribes of Israel, you can go this far talking about gold and silver and not mention the obvious.
Deut 28:12
12 The Lord shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend unto many nations, and thou shalt not borrow.
This is history repeating itself for the ten tribes of Israel. Get the THOU SHALT NOT BORROW? It is two edged commandment.
Nixon killed the gold standard in Aug 1971 to borrow more money from other nations to fund the Vietnam war. What did congress do 40 years later Aug 2011? Sequestration aka borrowing more money from China.
The fact that China is building empty cities and shipping CONCRETE from the USA to China to build empty cites doesn’t seem to bother the general population.
In the FWIW category, the Chinese, that built our rail roads, are the strangers within us because they were not from the ten tribes of Israel.
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“43 The stranger that is within thee shall get up above thee very high; and thou shalt come down very low.
44 He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail.”
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Are we now a nation filled with adultery and a 50% divorce rate?
Are we now a nation seized by a foreclosure market where everyone is pointing the finger at this and that? My prediction? Farms will fail 2013 at an alarming rate and we will have a huge food shortage here and across the world, while we burn corn for gas.
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30 Thou shalt betroth a wife, and another man shall lie with her: thou shalt build an house, and thou shalt not dwell therein: thou shalt plant a vineyard, and shalt not gather the grapes thereof.
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Dec 2012 is the 40th year of Roe. vs. Wade. Wait until you start paying for the 1st degree murder of 40,000,000 souls. That is when to expect the real SHTF.
Satan has about six more years to totally destroy the USA and turn the world upside down to usher in his return as the false messiah and Obama who hails supposedly from Kenya (which in spoken Hebrew means Cain Our God -Ken Jah) is leading the way.
You should prep for civil war.
I am John Brown and I approve this message.
The book of Deuteronomy was an Old Testament book & part of the Torah which, was one of the five instruction books to the Jews. It is not a prophetic book, especially to be applied to today. Your quoted verses have been a common problem with humans for thousands of years & were specific of the time of Moses. It is being misapplied by you to explain actions of today & predict a future.
Revelation is the book that has application to today along with much of the New Testament. However that being said, predicting end times is futile because Jesus said in Matthew 24 about the signs of the times & specifically verse 36 – nobody knows the hour …. you know the rest. Many things have to take place before we see the tribulation. Further, the “great deceiver” must come & that is not Obama whatsoever, it is a world leader.
Granted we were created as a nation based upon many Christian values but it is erroneous in my opinion to say we are a Christian nation – there is a clear distinction between the two.
God blessed America for the first one hundred fifty years without question in my book but as we moved away from Him by taking prayer out of school & the rest under the assumption that ”we” are inflicting our beliefs upon another – nothing is/was further from the truth. In response, God has slowly removed His blessings from us.
Obama is not a curse, he is a result of a people & a nation whom all became self-centered & ”me” centered. Like a child without rules, we run amuck with little accountability.
Sell everything & buy land, gold & silver? Ten years from now you’ll be scratching your head & wondering why you made that decision.
> Newt Gingrich balanced the budget in the 1990′s with supply side principles.
This is an outright lie, please don’t keep repeating it and drinking the cool-aide.
They balanced nothing and the nation’s debt increased over
$3,000 ,000,000,000 under the Bubba Newt watch. Just because slick willie the adulterer and newt the adulterer (Ross Perot – if your wife can’t trust you why should we) says it was balanced does not make it so. They balanced it by taking money owed and writing out 42+ year IOUs.
Their “balanced” budget included many accounting tricks. The one I like the best is called “forgone revenue”. It is where the federal government owed the USPS for $1,200,000,000. So, what they did is pay them back on a multi-generation IOU for $28 million a year for !@#$% 42 YEARS! Every year the USPS goes begging to Congress for the repayment of the debt, which is many times delayed.
http://directmag.com/news/marketing_usps_may_ask/#
“Congress, acknowledging that that it never gave the USPS all the money it should have over the life of the 20-year old program, agreed to pay the USPS $29 million a year over a 42-year period.”
Everywhere the federal government is stuffed with these IOUs. Social onSecurity has $2.5 TRILLION of them. Supposedly some are 70 year loans. LMAO!
I agree, sell everything you have and get land, gold, and silver. Because your paper money, stocks, and bonds will not buy food when the SHTF.
Believe what you want, but, Bubba and Newt did not balance any budget. To mock them, I came up with an acronym.
BUBBANEWT = BUdget Balance Before Any NEW Taxes
Budget balance does not mean taking loans out on a debt that your unborn grand children will have to pay back.
Silver and gold are the only real money you have, wipe your butt on the dollar ,its done. If you think Romny will save us, the stock market will recover,or the dollar will come roaring back , you are NUTS. You are liveing in the last days of a dieing republic. The 16 TRILLION dollar debt can NEVER be paid off. QE3 is the last desperate try , to hold the nation together till winter sets in. It will most likly fail.No matter what anyone on the planet dose , they CANNOT stop the crash. Its time for those that MIGHT survive this to change the way you think.Even IF you can find ,gasoline, food meds,ammo ,or any of the “ten thousand things” THE MONEY WILL BE WORTHLESS. Silver and gold may hold some value. IF it is leagle to keep/spend it. But paper money and wallstreet are over. And they may not come back.Right now (15 sep.) gas is just shy of 4$ a gal.- I can carry 100$ worth of food in the house in one trip. This thing is not ” somewhere over the rainbow” in some far off future, it here, now. AND. IT WILL NOT GET BETTER. IT WILL NOT END “SOON”. No matter WHO” wins” the race for king. This is “IT” QE3 Is where the great crash starts. Things will go VERY fast now. Good luck and GOD bless —– Ray
Kudos SHTF
The current trend line has an Israeli/Iran war within weeks.
Be aware and prepare/ Well done WND!
Another thought-provoking feature
Right onSHTF – WRITE ON!
Respectfully, Yoda
“Terrorist Attack On America” http://www.magnifiedview.com
Well Jarhead Survivor, nothing like a little light hearted thought provoking week-end topic. Time to stock up on some SHTF coffee. Maybe you can sell some on the site.
Hmm, there’s a thought. I know I’d buy it!
i trust the “dumb hicks” in maine LONG before i trust the “intelligentsia” in washington.. if this govt would step aside, the PEOPLE DO have answers to fix this mess….
Monopoly money …….hot off the press . Get yours while you can
The only answer to our problem is to cut the budget and federal employment by 50 %.
It worked in the Depression of 1921. Six month after Harding amounted that he was cutting the budget and federal employment the Depressions was over and the Roaring 20 stared.
…. only to lead into the Great Depression less than a decade later.
This short article has a very interesting parallel & how one US President actually got America debt free.
http://www.npr.org/blogs/money/2011/04/15/135423586/when-the-u-s-paid-off-the-entire-national-debt-and-why-it-didnt-last
“Just in time too because the huge increase in jobs by the last two QEs was just beginning to wear off.” Guess I missed that “huge increase”….. Yes, I know you were being facetious, but many people on the left believe it would have been so much worse without Obama. He seems to be surrounded by a particularly credulous circle of groupies, and it’s difficult to argue (reason with) a fanatic. Unfortunately, his biggest groupie is the media, itself, and none of the usual alarms are ringing. I feel a sudden need to watch watch “On the Cover of the Rolling Stone”, by Dr. Hook and the Medicine Company.
When other countries around the world have been in dire fiscal straits, the US has arrogantly withheld relief funds from them until they cut spending and raised taxes. Yet, when find ourselves in a similar situation, our leaders have decided to spend our way out of the predicament.
It’s little wonder that the US is seen as a bully around the world by many.