10 Economic Disaster Stories the Leftist Media is Hiding From You

10 Economic Disaster Stories the Leftist Media is Hiding From You

Posted By Rob Taylor On March 9, 2011

We all remember the media claiming the sky was falling during the Bush presidency, yet since Barack Obama got elected our journalist friends have bent over backward to paint a rosy picture of a country in crisis. Whether this is because of the leftist tilt of the media or an attempt to prevent the urban apocalypse a collapse of the dollar would cause is an argument that ultimately doesn't matter. What does matter is that you see these ten economic facts and understand what they mean to you and your family.

Then you can decide why this information is downplayed by the media.

10. There are at least 884 "problem" banks on the FDIC books.

The FDIC problem bank list has continued to grow even as the media claims the the economy is improving. As of December 2010, "problem banks' made up 12% of all the FDIC insured institutions. That doesn't count the failed banks for which the FDIC is already on the hook. In 2010 a total of 157 FDIC insured banks failed with combined total assets of $96,514,000,000. The FDIC, when all was said and done, lost "only" $22,355,300,000 to their Deposit Insurance Fund.

Of course this year we're on course to surpass those numbers. At the end of February the FDIC listed 29 failed banks. If the increase in "troubled" banks represents actual risk of failure than it stands to reason that we'll see a steady increase in bank failures which the FDIC insures. What does that mean to you? Simple, your money isn't safe.

A year ago it was known that the FDIC was running out of money. Back in 2009, even Bloomberg couldn't avoid reporting FDIC chair Shelia Bair's call for increased taxpayer funding because of the FDIC's dire financial straits.  The FDIC is operating in the red and relying on the federal government to keep it afloat, which means using our tax money. That makes their recent announcement that they are extending their non-interest bearing checking account deposit insurance from $250,000 to infinity all the more transparent. Bair is desperate to make you keep money in the bank because the FDIC can't afford a bank run.

So where are the talking heads telling you to protect your savings? If you keep more than $100,000 in any one bank you're setting yourself up for a shock when the FDIC finally admits they can't cover everyone. One bank run is all it will take to wipe out the FDIC, millions of Americans' savings, and the illusion perpetrated by the leftist media that the government can protect your money.

By the way, Sheila Bair was the subject of an investigation by the FDIC Inspector General over her role in forcing large banking firms to donate tens of millions of dollars to a Chicago bank that ultimately failed. Fox Business has a copy of the letter the IG sent to the Financial Services Committee. If you want to really lose faith in the Bair led FDIC, look no further than the Shorebank scandal.

Next: an unreported meltdown –>

9. Meredith Whitney is right about the coming municipal defaults.

The media has been doing their damnedest to discredit Meredith Whitney, who is most well known for predicting the financial meltdown. Whitney appeared on 60 Minutes late last year where she predicted that 50-100 municipal entities would go bankrupt and default on their bonds, wiping out "hundreds of billions" in investments. The savaging of Whitney by media talking heads was immediate.

Charlie Gasperino wrote a piece at the Huffington Post claiming Whitney should "show her cards," which basically accused her of making wild accusations she couldn't back up … ignoring the 600-page report her company has made available to customers. Dishonestly he used the fact that this report was proprietary to attack Whitney's credibility. Bloomberg columnist Joe Mysak made an even more specious attack with an argument that defies logic:

Why would a governmental entity go out of its way to provoke or alienate its best source of finance? In the old days you might say that bondholders were a distant class of banks and plutocrats mainly centered in the Northeast. That's no longer true, and hasn't been since at least the passage of the Tax Reform Act of 1986, which made bonds less attractive for banks and insurance companies, among other things. Today, a city's bondholders might live in the municipality itself, and almost certainly reside within the state.

Why would a governmental entity choose to default on its bonds, especially if they make up a relatively small proportion of its costs?

"Debt levels for U.S. local and state governments are relatively low, with annual debt service representing a relatively small part of budgets," Fitch Ratings said in a special report in November.

Entitled "U.S. State and Local Government Bond Credit Quality: More Sparks Than Fire," the report said, "The tax- supported debt of an average state is equal to just 3 percent – 4 percent of personal income, and local debt roughly 3 percent – 5 percent of property value. Debt service is generally less than 10 percent of a state or local government's budget, and in many cases much less."

The answers to these questions are simple, bond holders are the easiest people to stop paying. The majority of state and local budgets go to entitlements and pension obligations that they can't get out of. Worse, if they do try to cut them they face Wisconsin-like push backs from special interest groups. There is no bond holder union however, and it's unlikely that bond holders will make bomb threats against public officials, threaten local businesses and cause millions of dollars in damages to government buildings.

State and local governments will simply have no choice but to default, because they won't be able to trim the budget in other places without risking civil unrest. Would you want to be in New York City the day the local government discontinues all bus services?

Boise County just filed for bankruptcy and they don't have overwhelming public debt – just financial problems like hundreds of other municipalities. The expiration of the Obama administration's Build America Bonds has led to the sharpest decline of bond issuance in recent history which will exacerbate the financial woes of states which are already suffering loss from the recession driven decline of tax revenue. Property taxes have declined along with property values, and high unemployment has not just lowered tax revenues but increased government liability. How can bonds be considered a safe investment in this environment?

The talking heads in the media are smart enough to be afraid of the consequences of a municipal bond meltdown and are desperate to try to keep people from panicking. But this is one part of the economy that is not driven by psychology. There isn't enough money for state and local governments to continue to operate, and there's nothing anyone can do about it unless the people within the municipalities will accept cuts to services that make Greek austerity measures seem modest. Wisconsin proves that isn't possible, so what exactly do the talking heads think will happen?

Next: When emergency services cut corners –>

8. High oil prices are disrupting police and emergency services.

In Pickens County, South Carolina police on second and third shift are riding two to a car to save money, taking approximately half the cruisers off the road during prime crime hours. In nearby Greenville County where I live, the police haven't taken those drastic measures–yet. They are cutting corners in other ways to keep patrols but their budget has already been hit hard by the spike in gas prices.

And that was when gas was just $3.23 a gallon. What happens when it hits $3.75? Or when it reaches $5.00 a gallon?

Urban sprawl and growing suburbs have created a society in which local law enforcement relies on mobility to provide even mediocre service. That goes double for non-police emergency services who need to move quickly carrying hundreds of pounds of equipment. This model of service is challenged by high energy prices, but where's the media?

It is unlikely that only South Carolina is experiencing these problems, but how many reports have you seen address this reality? Higher gas prices in Los Angeles are limiting well funded charities like the American Red Cross and Meals on Wheels, but even reports on that story say nothing about how those same prices effect police, fire and emergency services.

Garden City, Georgia paid $10,000 a month last year for fuel, and the spike in prices have them taking steps to cut money in other areas. But where is the media on this? Are we to believe that the L.A.P.D. is not as dependent on gas as Meals on Wheels? Are only southern states dealing with tight budgets?

As gas prices increase state and local governments will not be able to provide you with he same amount of protection they do now. That should be a big story, but for most news agencies it isn't. Why?

7. The alternative currency movement is growing.

Aside from the occasional fluff pieces on local news broadcasts there's very little discussion of a trend that could have dire consequences for the economy if it gains momentum. The Alternative Currency Movement has been around for a while, but the Federal Reserve's inflationary actions since the beginning of the financial crisis have given the movement new life:

Clearly this may be a good move for individuals but the parallel economy that this activity creates removes economic activity from the already struggling U.S. economy. How does the government collect taxes on a privately printed currency that represents a promise to do chores, like the "time banking" schemes many alternative currencies use?

If businesses in an area start using alternative currencies for transactions with each other they will keep less money in already "troubled" banks.

I happen to be a fan of alternative currencies because for individuals it protects the wealth they have from currency debasement by the government. However, I'm cognizant of the pressure this movement puts on state and local economies. There will be severe consequences to the alternative currency movement picking up steam, including economic balkanization.

One would think that the media would dig a little deeper into this.

Utah introduced a bill to use gold and silver as a currency which would also create a committee to study switching to an alternative currency. South Carolina is introducing similar legislation. Even if these bills go nowhere, the fact that not just citizens but state lawmakers have lost confidence in a unified American currency should be a bigger story than it is – because it has dire implications for our country going forward.

Next: The counterfeit crisis –>

6. The market is flooded with counterfeit gold and silver.

China has taken advantage of the spike in the price of silver and increased demand for it by creating large scale counterfeit silver coin operations which are said to ship thousands of fake silver coins into the U.S. every month.

From KOMONews.com:

PORT ANGELES, Wash. – Counterfeit coins by the thousands are turning up in Washington state, and authorities are warning coin collectors to be on the lookout for them.

All or most of the counterfeits appear to be from China.

"Stacks of ingots, bars, all kinds of stuff – they make everything from pennies all the way up to silver dollars," says Port Angeles police officer Duane Benedict. "China is making these things by the thousands."

Several of the fake coins were recently sold to a Port Angeles business, EZ Pawn, for $400. They would have been worth more than $1,500 had they been real, Benedict said.

Officer Benedict got a call from EZ Pawn.

"They brought me in there to look at something they thought was fake. So I was pre-warned. But I picked it up and said, 'What's fake about it?'"

The 20 counterfeit U.S. Morgan silver dollars were supposedly from a century ago. Brian Winters of EZ Pawn has bought coins for years – and even he was fooled.

Unlike most counterfeits, the coins did not all have the same dates. One was a super rare 1893S, worth thousands and thousands.

It was at that time Brian pulled out a loupe and looked at a real coin and a suspect one. He found the "T" and the "I" too thick. All the coins were fake.

Fake gold has also been found in investor holdings. About a year ago a German news crew found that W. C. Heraeus in Hanau, Germany, the world's largest privately owned refinery, had received counterfeit gold bars from an unidentified bank. Video shows the bar being broken open to show that it is made from tungsten with a thin gold coating on the outside.

The foreign press has long used this sort of story to question the gold holdings of the United States. Additionally, in recent years financial bloggers have begun to question whether we have as much gold as we claim in reserve – especially after a highly publicized incident in 2009 where China received a shipment of counterfeit gold bars as part of a debt settlement. Did I say highly publicized? In America this story has continued to fly under the radar for years, even though it has international import.

One would think the idea that there might even be less gold and silver in the world than people think would garner at least some attention. But the mainstream media spends little time on this story. People seeking to protect their wealth with gold and silver investments could lose everything, and governments may even now be sitting on reserves of cheap gold plated metal instead of actual gold. That sounds like a disaster to me, but apparently not to the media.

Next: Chilling food stamp data –>

5. 44,000,000 Americans are on food stamps.

The media is pushing the new jobs report that shows extremely modest gains in employment, but they aren't mentioning that while this "recovery" is on the way there are more people than ever on government assistance. The government's own numbers are chilling. They show that not only are more Americans than ever before in history getting food stamps, but that the number of people collecting those benefits is increasing each month.

You don't need to get into the arcane data points about how the government fudges employment data to see the problem here. Even if the government and the talking heads are right and we're in a recovery, it would be years, if not decades, before we get back to full employment at this pace. Meanwhile more and more people are dependent on a debt laden government for their income.

This trend is partly due to the Left promoting the idea of middle class entitlements, leading to outrages like City Year volunteers collecting food stamps. People with part time or off the books jobs are collecting food stamps because we've created a society where people think they have a "right" to taxpayers feeding them. But what happens when we run out of money?

For every person who got a job in February there were dozens collecting food stamps. If the media truly doesn't see this as a disaster waiting to happen I question their sanity.

4). Four out of every ten rows of corn go to fuel production

The anti-human greens are starving the world with their policies and nowhere is this more apparent than in the amount of the world's corn that's being diverted into fuel production. The stark immorality of radical environmentalism is on full display when you understand how our push for "clean fuel" is literally starving poor people worldwide.

From WSJ:

In 2001, only 7% of U.S. corn went for ethanol, or about 707 million bushels. By 2010, the ethanol share was 39.4%, or nearly five billion bushels out of total U.S. production of 12.45 billion bushels. Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed.

This trend is the deliberate result of policies designed to subsidize ethanol. Note the surge in the middle of the last decade when Congress began to legislate renewable fuel mandates and many states banned MTBE, which had competed with ethanol but ran afoul of the green and corn lobbies.

This carve out of nearly half of the U.S. corn corp to fuel is increasing even as global food supply is struggling to meet rising demand. U.S. farmers account for about 39% of global corn production and about 16% of that crop is exported, so U.S. corn stocks can influence the world price. Chicago Board of Trade corn March futures recently hit 30-month highs of $6.67 a bushel, up from $4 a bushel a year ago.

Demand from developing nations like China is also playing a role in rising prices, and in our view so is the loose monetary policy of the U.S. Federal Reserve that has increased the price of nearly all commodities traded in dollars.

But reduced corn food supply undoubtedly matters. About 40% of U.S. corn production is used to produce feed for animals. As corn prices rise, beef, poultry and other prices rise, too. The price squeeze has already contributed to the bankruptcy of companies like Texas-based Pilgrim's Pride Corp. and Delaware-based poultry maker Townsends Inc. over the past few years.

This damage coincides with a growing consensus that ethanol achieves none of its alleged policy goals. Ethanol supporters claim the biofuel reduces U.S. dependence on foreign oil and provides a cleaner source of energy. But Cornell University scientist David Pimentel calculates that if the entire U.S. corn crop were devoted to ethanol production, it would satisfy only 4% of U.S. oil consumption.

In other words, a green pretension is making it more expensive for Americans to feed their families, destroying businesses, and starving people in the third world. The U.N. has already expressed concern about the ability of the world's poor to feed themselves due to high food prices, which I suppose is considered a small price to pay for "environmentally conscious" liberals.

Food riots have occurred with increasing frequency worldwide and rising food prices have played a role in the Middle East unrest. Yet the media continues to ignore the responsibility of silly and ineffective environmentalist policies in harming the ability of the poor to eat. It will take food riots here for the media to admit that using food as fuel is bad policy.

Next: Are our cities unsustainable islands? –>

3. It will take less than one month for America to collapse if trucks stop running.

In 2006 the American Trucking Association released a white paper that described what would happen if commercial truck traffic was disrupted for any reason. The report was called When Trucks Stop, America Stops and it shows just how vulnerable America is to even minor disruptions of goods. Trucks not only are essential to keeping supermarkets stocked due to our "just in time" inventory model, but bring the chemicals used to treat our water and the medical supplies to stock our hospitals.

The paper claims that food shortages would be seen within one day of trucks not running while hospitals would run out of catheters and syringes around the same time. Within two to three days ATMs will be empty and gas stations will be out of fuel. A week later hospitals would be out of oxygen and within four weeks no water coming out of a faucet would be safe to drink. It's a stunning report that you've probably never heard of.

But the implications of the report are wider than just the unlikely event of a full shut down of commercial traffic. What if high fuel prices put independent owner operators out of business and decrease the number of trucks on the road by 25%? The same vulnerabilities would come into play, causing shortages and price hikes. The last gas crisis we had came before the majority of businesses used the JIT system. If we see skyrocketing fuel prices now, will we see severe shortages at the stores as commercial truckers make fewer runs?

Our large cities have grown in the last 30 years into unsustainable islands of dependent populations who rely on a near constant stream of trucks to keep going. Even minor disruptions in that delicate web will cause near chaos in the streets as essentials become too expensive for the average consumer – or disappear completely. This is something people need to think about, but they aren't.

Our media figures often talk about sustainability in regards to the leftist green agenda, but here where sustainability is truly at risk there is nothing but the sound of silence. If we see oil prices hit $200 a barrel as some predict many people will suffer from this silence.

2. George Soros is hoarding gold.

Early in  2010 George Soros, despite talking down gold as an investment in a series of sound bites, doubled his gold holdings. At the same, Soros-funded leftist groups and prominent Democrats, perhaps doing Soros' bidding, were busy attacking gold sellers and the idea of gold as a legitimate investment.

One would think this would pique a reporter's curiosity.

It is especially curious to see Soros buying the commodity he claimed was a bubble after he was on record talking about a "managed decline" of the dollar. Soros' goal of destroying global capitalism can only be achieved by destroying the U.S. dollar (which the Obama administration is doing now) and as the dollar is destroyed gold will become more and more valuable. As usual Soros is poised to enrich himself from the collapse of a currency he orchestrated, but the leftist media says nothing.

And finally: the looming food crisis in America –>

1. Food distribution companies are warning of severe food shortages in the coming weeks.

Sysco is one of America's largest food distribution companies. Early in February they sent out this release to customers which warned of a looming food crisis – in America:

THE EXTREME FREEZING TEMPERATURES HIT A VERY BROAD SECTION OF MAJOR GROWING REGIONS IN MEXICO, FROM HERMOSILLO IN THE NORTH ALL THE WAY SOUTH TO LOS MOCHIS AND EVEN SOUTH OF CULIACAN.  THE EARLY REPORTS ARE STILL COMING IN BUT MOST ARE SHOWING LOSSES OF CROPS IN THE RANGE OF 80 TO 100%. EVEN SHADE HOUSE PRODUCT WAS HIT BY THE EXTREMELY COLD TEMPS. IT WILL TAKE 7-10 DAYS TO HAVE A CLEARER PICTURE FROM GROWERS AND FIELD SUPERVISORS, BUT THESE GROWING REGIONS HAVEN'T HAD COLD LIKE THIS IN OVER A HALF CENTURY.  THIS TIME OF YEAR, MEXICO SUPPLIES A SIGNIFICANT PERCENT OF NORTH AMERICA'S ROW CROP VEGETABLES SUCH AS: GREEN BEANS, EGGPLANT,CUCUMBERS, SQUASH, PEPPERS, ASPARAGUS, AND ROUND AND ROMA TOMATOES.  FLORIDA NORMALLY IS A MAJOR SUPPLIER FOR THESE ITEMS AS WELL BUT THEY HAVE ALREADY BEEN STRUCK WITH SEVERE FREEZE DAMAGE IN DECEMBER AND JANUARY AND UP UNTIL NOW HAVE HAD TO PURCHASE PRODUCT OUT OF MEXICO TO FILL THEIR COMMITMENTS, THAT IS NO LONGER AND OPTION.WITH THE SERIES OF WEATHER DISASTERS THAT HAOCCURRED IN BOTH OF THESE MAJOR GROWING AREAS WE WILL EXPERIENCE IMMEDIATE VOLATILE PRICES, EXPECTED LIMITED AVAILABLITITY, AND MEDIOCRE QUALITY AT BEST. THIS WILL NOT ONLY HAVE AN IMMEDIATE IMPACT ON SUPPLIES, BUT BECAUSE OF VERY STRONG BLOSSOM DROPS, THIS WILL ALSO IMPACT SUPPLIES 30 – 60 DAYS FROM NOW. SOME GROWERS ARE MEETING WITH THEIR BOARDS RIGHT NOW TO DETERMINE WHETHER THEY SHOULD IMMEDIATELY RE-PLANT, HOPING FOR A HARVEST BY LATE-MARCH-TO-EARLY-APRIL, OR WHETHER THEY SHOULD DISC THE FIELDS UNDER AND WAIT FOR ANOTHER SEASON.

Right now we're just about to enter the 30-60 day period they warn about.

For months the news has reported crop failures, droughts and storm related damage to farm land but there have been no follow up reports on the shortages these incidents would necessarily create. Sysco did not release their report in the dead of night hidden from the news media; they sent it out to thousands of people. The crop failures they are speaking about are common knowledge, or should be.

But where is the media on this story? It's up to news agencies to tell people these shortages are coming so people can prepare for them. Instead the media is ignoring what could be a spike in food prices so dramatic it will limit the ability of Americans to obtain several types of fresh vegetables. Imagine, in a few weeks it's possible that Americans will not be able to afford fresh tomatoes and eggplants, or they may find that those vegetables aren't available at all. I would think this news would earn more coverage than it is currently receiving, don't you?

The media is often accused of selective reporting and in the case of financial reporting the charges are doubly true. Perhaps if Barack Obama loses his re-election bid we will see the media stop cheerleading a dying economy and report the news as it is. There is no greater indictment of the media, no better example of the corruption within, than the fact that America can't rely on them to report stories like these.

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Article printed from NewsReal Blog: http://www.newsrealblog.com

URL to article: http://www.newsrealblog.com/2011/03/09/10-economic-disaster-stories-the-leftist-media-is-hiding-from-you-1/

 

 

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