US, world headed for 25 year depression: Jim Rickards

US, world headed for 25 year depression: Jim Rickards

“When I use the phrase 25 year depression, it sounds extreme but it’s not. We had a 30 year depression in the United States from about 1870 to 1900…The Great Depression lasted from about 1929 to 1940. The U.S. is in a depression today.” Well, it's been in the works for

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Canadian banking haven myth exposed

Canadian banking haven myth exposed

"One of the reasons that Canadians (and international commentators, other finance ministers and global financial institutions) buy this Canadian banking fairy tale is the way the government accounts for the money borrowed to support the banks." The sorry spectacle of Conservat

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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

US inches closer to big bank charges

Federal prosecutors are nearing criminal charges against some of the world’s biggest banks, according to lawyers briefed on the matter, a development that could produce the first guilty plea from a major bank in more than two decades. In doing so, prosecutors are confronting

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Canada’s home sales top predictions; why a real estate crash is inevitable

Canada’s home sales top predictions; why a real estate crash is inevitable

“The assurance of relatively low borrowing costs has likely given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike.” Our website is back after many months of

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Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

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Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

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US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

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Content By: The Coming Depression Editorial Staff (dates cited below)
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The Labor Department said Friday that wages and benefits rose by 0.5 percent in the three months ending in December. For the entire year, wages and benefits were up 1.5 percent, the weakest showing on records that go back to 1982.

Wages and benefits rise weak 1.5 percent in 2009
Wages and benefits rise in 2009 by smallest amount on records going back 27 years

WASHINGTON (AP) — Wages and benefits paid to U.S. workers posted a modest gain in the fourth quarter, ending a year in which recession-battered workers saw their compensation rise by the smallest amount on records going back more than a quarter-century.

The anemic gains have raised concerns about the durability of the economic recovery. The fear is that consumer spending, which accounts for 70 percent of economic activity, could falter if households don’t have the income growth to support their spending.


Comment:

A strong economy must be built on a solid foundation of steadily rising wages. If wages are not keeping pace with production, the only way the economy can grow is through the expansion of debt which leads to disaster.

Consider this: the U.S. economy is 72 percent of consumer spending. This means that the gross domestic product (GDP) may rise if wages do not follow with the cost of living. Low Income Families (LOF), that and this is couples making less than $ 80,000, represent 50 percent of all consumer spending. The LOFs spend everything they earn just to maintain their current lifestyle. So how can they help families to grow the economy if they are already spending every last penny until they earn? They can not! This explains why wages should rise. The cost for short-term profits is miniscule compared to the turmoil of a deep recession and that is what the world is facing right now.

usa wage growth since 1947

This is by design, as corporations in a globalized market, are left with 2 choices:
1. bring the world to Western living standards, or
2. Drop the world down to third world status.

Guess which they chose? Indeed, it is much more cost effective to transform the world into a sewer Slave Labor armpit than to raise living standards as a whole. This is not just happening in the United States, European countries, the Nordic region in particular, are thorns in the foot and economically destroyed. If our country is so concerned about China as an economic threat, why do we continue to allow trading whith them and sending our manufacturing base there?

On the other side of the coin, employees can’t be paid a living wage unless the value of their productivity to the employer exceeds the cost. If people can’t find an employer that will pay them a wage they can live on, they need to be asking themselves what they bring to the table when they go to employers. If you have no skills then you have no skills, and legislating higher wages can’t fix this. It just sets a higher bar at which everyone below that bar is unemployable. That’s common sense.

Doesn’t take much thought to realize the minimum wage issue is a circular argument, wages go up, prices go up, politician needs support, wages go up, wages go up, prices go up. The losers are the small business owner who takes the loss during the interm or the low income worker who gets their hours cut or gets layed off till the prices even out. Small business owners already work at least 6 days a week usually 12 hour days. Sometimes you work 30 days or 60 days without a day off, you get no pension, you can’t draw EI, your house is collateral for the loan on the business and then you get some know it all who really hasn’t done anything except complain about everything telling you maybe you should spend more time in your business and that your employees are the only reason you make money.


The Labor Department said Friday that wages and benefits rose by 0.5 percent in the three months ending in December. For the entire year, wages and benefits were up 1.5 percent, the weakest showing on records that go back to 1982.

The 1.5 percent increase in total compensation in 2009 was about half the 2.6 percent increase in 2008 and both years represented the smallest gains for the government’s Employment Compensation Index.

Last year, wages were up by just 1.5 percent and benefits rose by the same 1.5 percent, both record lows. In 2008, wages and salaries had been up 2.7 percent and benefits, which cover such things as health insurance and pension contributions, had risen by 2.2 percent. Read the rest of the article from Yahoo News

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This entry was posted on Friday, January 29th, 2010 at 10:42 pm and is filed under Poverty. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Comments

  1. January 30, 2010 @ 11:37 pm


    Whats not to understand? We no longer produce. We don’t even make our own toilet paper. Our biggest export is content. Most of which is either deceptive news, or who’s getting it on at the office Why would any productive country ex. China look at us with favor? They can out produce us any day of the week. We on the other hand have become a lazy bunch of whining do nothings wanting the government to provide for our every need and expecting $100k salaries. Our government jobs have become breeding grounds for this apathetic work ethic. Is it any wonder business no longer wants to maintain the status quo.

    Posted by Gene Colburn
  2. January 30, 2010 @ 11:45 pm


    Gene,

    You are very right about China. I lived in South Korea for 1 year and went to China to visit. I saw the horrible industrial towns and such. I spoke to some locals (who spoke broken English) and their working conditions were bad. They out produce the US in just about every way. These economists who say that offshoring of our manufacturing base is a good thing are just corporate/government paid cheerleaders. They would sell their own mothers.

    I’ve had it with north America — it is going down the shit hole. I am moving to Europe.

    Posted by Jason
  3. February 1, 2010 @ 10:28 pm


    The resolution to all of this monetary mess is found under the topic: RESOURCE BASE ECONOMY. Google this and examine your intellect and creativity. SEE RBEF OR RESOURCE BASED ECONOMY FOUNDATION.

    Posted by TINA DEPAS
  4. February 7, 2010 @ 12:11 pm


    Hey Jason, USA might be going down the toilet, but Europe isnt that far behind it. I guess you could say this a global problem. The MSM just wont talk about anything too negative about the economy here or over there.

    Posted by Tony

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