Washington D.C.

Did you know that 40 percent of all American workers make less than $20,000 a year before taxes?  And 65 percent of all American workers make less than $40,000 a year before taxes.  If you work on Wall Street, or have a cushy job with the federal government, or work for a big tech firm out on the west coast, life is probably pretty good for you right now.  But the truth is that most Americans are not living the high life.  In fact, most Americans are just trying to figure out how to survive from month to month. If we truly did have a free market capitalist system, the entire country would be a land of opportunity and things would be getting better for everybody.  Unfortunately, that is not the case at all.  The following are 21 facts about "wealthy America" and "poor America" that are hard to believe...

Power, or perceived power, is a viciously addictive narcotic. It doesn't matter what political or philosophical background a person hails from, very few have the self discipline or the self awareness necessary to relinquish the trappings of power once they have tasted it. This truth applies to conservatives as much as it applies to liberals. The bottom line is, whether Obamacare is successfully implemented or not, whether the debt ceiling is raised again or not, whether the Left passes every agenda on its list or not, our system is broken and it is going to collapse. There is no way around it. More debt and more fiat printing means stagflationary collapse. Default and austerity means stagflationary collapse. If liberals want to place blame for this conundrum, then they should focus on the people who actually set the original fire – international and central bankers. Constitutional conservatives have been the only people attempting to inform the American public of the facts surrounding our current fiscal crisis.

Did you know that the number of Americans on welfare is higher than the number of Americans that have full-time jobs?  Did you know that 1.2 million public school students in the U.S. are currently homeless?  Anyone that uses the term "economic recovery" to describe what is happening in the United States today is being deeply insulting to the nearly 150 million Americans that are considered to be either "poor" or "low income" at this point.  Yes, things are great in New York City, Washington D.C. and San Francisco, but almost everywhere else economic conditions continue to steadily get worse.  The gap between the wealthy and the poor is at a level that America has never seen before, and this is beginning to create a "Robin Hood mentality" that could cause a tremendous amount of social chaos in the years ahead. Despite unprecedented borrowing by the federal government in recent years, and despite unprecedented money printing by the Federal Reserve, poverty in the United States keeps getting worse with each passing year. The following are 29 incredible facts which prove that poverty in America is absolutely exploding

The kabuki theater that passes for governance in Washington D.C. reveals the profound level of ignorance shrouding this Empire of Debt in its prolonged death throes. Ignorance of facts; ignorance of math; ignorance of history; ignorance of reality; and ignorance of how ignorant we’ve become as a nation, have set us up for an epic fall. It’s almost as if we relish wallowing in our ignorance like a fat lazy sow in a mud hole. The lords of the manor are able to retain their power, control and huge ill-gotten riches because the government educated serfs are too ignorant to recognize the self-evident contradictions in the propaganda they are inundated with by state controlled media on a daily basis.

This artificial prosperity plan for Wall Street has the added benefit of allowing the captured politicians in Washington D.C. to continue their $1 trillion per year deficit spending with no consequences for their squandering of future generations’ wealth. Bernanke and Yellen will never taper, because they can’t. The Fed balance sheet will continue to grow by at least $1 trillion per year until they crash the financial system again. Except this time, there will be no money printing solution. We are all trapped like rats in this monetary experiment being conducted by evil mad scientists. No one will get out alive. Welcome to the new normal. Now eat your cheese.

The number one American export is U.S. dollars.  It is paper currency that is backed up by absolutely nothing, but the rest of the world has been using it to trade with one another and so there is tremendous global demand for our dollars.  The linchpin of this system is the petrodollar.  For decades, if you have wanted to buy oil virtually anywhere in the world you have had to do so with U.S. dollars.  But if one of the biggest oil exporters on the planet, such as Saudi Arabia, decided to start accepting other currencies as payment for oil, the petrodollar monopoly would disintegrate very rapidly.  For years, everyone assumed that nothing like that would happen any time soon, but now Saudi officials are warning of a "major shift" in relations with the United States.  In fact, the Saudis are so upset at the Obama administration that "all options" are reportedly "on the table".

If there was any doubt that the US housing "recovery" is anything but the latest speculative play by deep-pocketed (namely those who already have access to cheap funding) investors, who are now engaged in rotating cash gains out of capital markets and into real estate, on their way hoping to flip newly-acquired properties to other wealthy investors, then the most recent, September, RealtyTrac report will put that to rest. To wit: Institutional investors (purchasing 10 or more properties in the last 12 months) accounted for 14 percent of all sales in September, up from 9 percent in August and also 9 percent in September 2012. September had the highest percentage of institutional investor purchases of any month since RealtyTrac began tracking in January 2011....All-cash purchases nationwide represented 49 percent of all residential sales in September, up from a revised 40 percent in August and up from 30 percent in September 2012. In other words, institutional purchases are now at all time highs, with all-cash accounting for half of all transactions!

In a “Sponsorship Agreement” between the Maryland Health Connection and the Ravens, Judicial Watch reports that the state (read taxpayers) will pay the Super Bowl champs $130,000 to push Obamacare on television, radio, the team’s official website, its newsletter and in social media. If Obamacare is the great thing that we are constantly reassured it to be, why are we seeing the administration feeling the need to constantly market, pitch, and sell the idea by any means possible (from keg standing college students to Superbowl shuffles)?

The collapse of American society is accelerating.  For the moment, much of our social decay is being masked by the tremendous level of affluence that we are experiencing in aggregate.  It has been reported that 4 out of every 5 adults in the United States "struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives", but in general Americans still enjoy a debt-fueled standard of living that is far beyond what most of the rest of the world enjoys.  When that debt-fueled standard of living permanently disappears, it is going to unleash chaos unlike anything that America has ever seen before. So how can we be so sure that this is going to happen?  After all, the United States didn't descend into complete and utter chaos during the Great Depression of the 1930s.  Wouldn't an economic depression unfold in a similar manner today? Unfortunately, a lot has changed since then.  A lot more Americans were self-sufficient back in those days, and the truth is that the character of our nation has been rotting and decaying for decades.

While 20-year highs for the CNY may be enough for many to question the USD's ongoing reserve status, it is clear that there are many other plans afoot that undermine the dominance of the greenback. On the global financial stage, China is playing chess while the U.S. is playing checkers, and the Chinese are now accelerating their long-term plan to dethrone the U.S. dollar.  You see, the truth is that China does not plan to allow the U.S. financial system to dominate the world indefinitely. Unfortunately for us, the U.S. debt spiral cannot go on indefinitely.  Our debt is growing far, far more rapidly than our GDP is, and therefore our debt is completely and totally unsustainable. The Chinese understand what is going on, and when the dust settles they plan to be the last ones standing.

While the specter of the debt ceiling debate continues to haunt the halls of Washington D.C. it is the state of retail sales that investors should be potentially focusing on.  While the latest retail sales figures from the Bureau of Economic Analysis are unavailable due to the government shutdown; we can look at other data sources to derive the trend and direction of consumer spending as we head into the beginning of the biggest shopping periods of the year - Halloween, Thanks Giving (Black Friday) and Christmas. The recent downturns in consumer confidence and spending are likely being exacerbated by the controversy in Washington; but it is clear that the consumer was already feeling the pressure of the surge in interest rates, higher energy and food costs and stagnant wages.  As we have warned in the past - these divergences do not last forever and tend to end very badly.

The "Million Vet March" in Washington D.C. appears to be escalating as reports of barricades being torn down, police in riot gear and snipers being deployed, and a growing crowd at The White House chanting for its shut-down suggest the people are growing restless.

There really is very little reason why this "government shutdown" cannot continue indefinitely because almost everything is still running.  63 percent of all federal workers are still working, and 85 percent of all government activities are still being funded during this "shutdown". It turns out that the definition of "essential personnel" has expanded so much over the years that almost everyone is considered "essential" at this point.  In fact, this shutdown is such a non-event that even referring to it as a "partial government shutdown" would really be overstating what is actually happening. In the end, this shutdown could turn out to be very good for America.  We have a government that is wildly out of control and that desperately needs to be reigned in.