Guest Post: Eight Signs The System Is Broken

Submitted by Simon Black of Sovereign Man blog,

Here are a few interesting tidbits to chew on:

1) In the land of the free, there are now more than 760 incarcerated inmates for every 100,000 citizens. This is more than 5x the 1980 average, and it far surpasses the number (560 per 100,000) that Stalin threw in the Gulag at the peak of Soviet terror.

2) Apparently, Americans are getting more interested in snitching on each other. According to Google Trends, internet searches for terms such as “IRS reward” (and related keywords) have exploded since 2008, and especially this year.

3) Last month, a school district in California sold $164 million worth of bonds at 12.6% interest; this is more than Pakistan, Botswana, and Ecuador pay in the international bond market.

4) Based on the Treasury’s most recent statistics, US government interest payments to China will total at least $26.055 billion this year. The real figure may be much higher given that China has been purchased Treasuries for decades, back when interest rates were much higher. They’re still getting paid on those higher rates today. Even still, this year’s interest payment to China totals more than ALL the silver that was mined in the world last year.

5) In August 2008, just before the Lehman Brothers collapse, the number of employed persons in the United States was 145.47 million persons. Over the subsequent years, the employment figure dipped to as low as 139.27 million. Today it stands at 142.1 million. Even if this is considered recovery, to ‘rescue’ those 2.8 million jobs, it took the federal government an additional $6.421 trillion worth of debt ($2.3 million per job), and a $1.9 trillion (203%) expansion of the Federal Reserve balance sheet.

6) Meanwhile, despite trillions of euros in debt and bailouts, the unemployment rate in the eurozone just hit a record high of 11.4%… and a second Spanish bailout is now imminent.

7) Inflation in Zimbabwe (3.63%) is lower than inflation in the UK (3.66%, August 2011-July 2012).

8) Last week, the French government reached a ‘historic’ budget compromise, shooting for a budget deficit that’s ‘only’ 3% of GDP. This is based on an assumption that the economy will grow by 0.8%. In other words, France’s official public debt (which is already at 91% of GDP) will increase by 2.2% of GDP next year amid flat growth. And this is what these people consider progress.

Comments

[mx]

"the number (560 per 100,000) that Stalin threw in the Gulag" is nonsense.You have to multiply that number at least by 10. At any one time there were several million in the gulag.

[Stuck on Zero]

Stalin was happy to just kill anyone and skip the gulag.  30-60 million dead.  Most of our prisoners go on to lead lives of crime.  Gulag prisoners ended up beneath the permafrost.

[Uncle Remus]

to be released as methane...

[riley martini]

 #9 JPM Chase is charged with another fraud this for $ 20,000,000,000 and the stock trades up for most of the day and afte hours . JPM owns the POTUS and the courts . The charges were preapproved by JPM to only include the Bear Stern fraud.

[steveo77]

Asset Class Total

Money shifts from class to class, but the overall trend of printing money is clearcut, compare to 2003, 2004, 2005, i.e. the lead up to the "BOOM" years

And Below is Hawaii Tradings patented Fear Factor, and Volatility on Steroids.

Everything here points to even more of a drop

The "anti-dollars" Cable (GBP.USD currency pair) also points to a drop.

Premium is low on options right now, I will pick up some longer options with some smaller Delta for the near term.

I still think we ramp into the election, which is "so democratic" to spend like a drunken sailor and get people all giddy, so they forget the "lost decade", so they forget the loss of the freedoms they used to have, so they forget that unless you join the corruption with both hands, hard work and innovation will not result in just rewards.     Sorry, that's all true, now get over it, and make some money and prepare for the end of the Keynesian experiment.

http://oahutrading.blogspot.com/2012/10/act-ff-vos-and-mini-rant.html

[Quixote2]

"....shooting for a budget deficit that’s ‘only’ 3% of GDP. This is based on an assumption that the economy will grow by 0.8%. In other words, France’s official public debt (which is already at 91% of GDP) will increase by 2.2% of GDP next year amid flat growth. And this is what these people consider progress."

Don't you mean that the public debt will increase by 3.8% of GDP amid flat growth?  Or is it 3.1%?

[ptoemmes]

Apparently incarceration is a jobs program: http://www.colbertnation.com/the-colbert-report-videos/419674/october-01...

[Fix It Again Timmy]

'bout a trillion dollars spent on defense last year and we couldn't even protect our Ambassador in Libya, guess we need to spend about 5 trillion...

[Uncle Remus]

I am waiting for the "shot heard 'round the world".

[polo007]

http://www.safehaven.com/article/27164/unraveling-why-a-fed-president-just-suggested-doubling-qe3

The Federal Reserve is, of course, well aware that the unemployment situation is far, far worse than what is being captured in the official headline unemployment rate of 8.1%. The government knows full well that the true unemployment rate, once workforce participation rate manipulations are netted out, is closer to 19% - and getting worse.

This building crisis of a strengthening dollar and rising unemployment called for emergency action, and that is exactly what Bernanke is doing. He is effectively calling in a B-52 strike on the US dollar, monetizing for the world to see, and pledging to monetize for as long as it takes - until the US dollar is driven down to a level where American workers can once again be globally competitive.

If the rest of the world sits back and lets the United States drive down the value of the dollar, then US employment is indeed likely to rise - at the cost of falling employment elsewhere. But if the rest of the world is not willing to sit back and watch jobs flow to the US, then there is likelihood of counterstrikes, and even the danger of all-out currency warfare.