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Continued from USA’s time as a superpower is over – Part 1

SIGNS OF THE END TIMES

If their actions are anything to go by, the US government wants to decimate the country’s economy. At best, their ‘stimulus’ packages could be deemed economic mismanagement, but at worst they are a calculated plan to put the remainder of US wealth into the hands of the elite before the coming collapse occurs.

Congressman Ron Paul notes that they got themselves into the mess by spending too much, running up debt and printing too much money. So it is inexcusable when they do they take the exact same steps and rename it as a ‘stimulus package’. Gerald Celente has taken his criticism a step further, and pointed out that the merger of corporate and government powers that we have experienced can only be classified as fascism.

Celente has also been keeping watch on the effects of the ‘stimulus package’, and has yet to see any beneficial effects since its introduction. Conversely, the signs of a coming Great Depression are damning, as he points to the falls in spending at the end of 2008 ‘Christmas period’. Women’s apparel was down 23%, home furnishings and electronics down by 27%, and luxury items 35%. These are depression era collapses.

Depression era levels are also being approached in relation to unemployment rates. Celente knows the US government keeps two sets of figures; one heavily doctored version which they disclose as the official rate, and one less altered version which is close to the real level.  The official rate doesn’t take into account part-time workers or people who have ‘given up’ looking for work, which when factored in bring the current US unemployment rate up to 13.7%.

COMMERCIAL REAL ESTATE COLLAPSE

We have already seen major retail companies going bankrupt and closing stores, but we are yet to see the full effects in the economy. Thousands of retail showrooms and stores remain vacant after the collapses, with landlords and real estate firms finding it impossible to fill all vacancies. Banks, brokerage firms and other large commercial firms have also gone under, leaving a mass of empty buildings. Just who will rent the vacant retail and commercial business space? – Nobody.

With empty buildings and no tenants to pay the rent, the building owners will be unable to meet their loan repayments. We will see a raft of commercial property repossessions, and many economists are predicting that the coming collapse of the commercial real estate market will dwarf the collapse of the residential real estate market, especially when you consider the insurance and re-insurance figures as well.

The damage caused by the collapse of the commercial real estate market will be far reaching, severely affecting the support industries in addition to the owners and employees of the banks and buildings. Advertising, maintenance, labouring and manufacturing industries which rely on business from these commercial tenants will be left reeling from the decline in business.

The USA is quite simply unprepared for the events which lay ahead in the future. Gerald Celente has noted that although the Great Depression of the 1930′s was a catastrophic event, the USA was in a far better position to rebound from the calamity. Last time, there were few homeowners and very little debt, as well as a strong manufacturing base. Nowadays, the manufacturing base has been shifted to China, and consumers have taken on massive mortgages and acquired extraordinary credit card debt.

CALAMITY ON THE HORIZON

It has been well documented that the USA is the most depressed nation on earth. They are already plagued with major issues such as suicide problems, and the minor effects such as crime and binge consumption. Many Americans are guilty of escaping from the sad reality of their lives by consuming copious amounts of alcohol and other drugs, as well shopping sprees with money they don’t have. No other nation comes close to matching the amount of anti-depressants consumed each year by American society, confirming its status as the saddest nation in the world.

To say there are underlying mental issues within the US population is an understatement. These will undoubtedly provide the fuel for some horrible events in the years to come. There is a consensus that we will see widespread violence, riots and government revolts as people try to survive. The crime rate has been predicted to rise so high that it will rival third world countries, with kidnappings and murders becoming commonplace.

We are already seeing the first steps towards a major revolution in the USA. The government has introduced a plethora of new taxes to cover their elaborate spending sprees. The public has had enough of paying for the governments mistakes and there has been a trend towards tax revolts in recent times.

For many years the US citizens have been paying tax, although there is actually no law which requires them to do so. This argument reached court earlier this year, with a Florida judge ruling that long-time tax protestor Charles Behm committed no criminal acts when he failed to file tax returns.

Continued at USA’s time as a superpower is over – Part 3

YOUR TIME IS UP

The world has been left reeling from the global financial crisis, particularly in the USA. Their housing market has collapsed, unemployment has risen and the confidence of the citizens in their government has been shattered. A crisis can’t last forever though, and the news stations are reporting that the US economy is recovering.

The American public is widely aware of biased reporting, so these claims should be taken with a grain of salt. Recent Pew Research surveys have shown that 63% of Americans believe that news stories are inaccurate, with 60% claiming they are politically biased. A staggering 74% of the public are now aware that the media is heavily influenced by powerful people and organisations, creating a huge level of distrust in the American media’s reported stories.

Considering these facts, it is not surprising that the media is failing to report and ignoring the opinions of most of the leading international economists. While they may have differing opinions on a wide variety of subjects, there is one thing that they all agree on – the USA will plunge into an even greater depression, meaning its time as a global superpower is over.

EXPERT CONSENSUS

Gerald Celente is probably the world’s most highly respected trend forecaster, for which a number of media firms and notable personalities approach first when they need accurate predictions. They say even Nostradamus would have a hard time keeping up with him. His record speaks for itself, accurately predicting the 1987 stock market crash, the fall of the Soviet Union, the Dot.com bust, Gold Bull Market and 2001 US Recession.

Celente has remained on the pulse with world events and predicted the recent Real Estate bubble, panic of 08 and tax revolt. But his predictions amidst the global financial crisis don’t stop there, as Celente predicts “the Collapse of ’09″ to occur later this year as well as the coming “Great Depression”, which will dwarf the 1930′s version. Celente also believes the mayhem will flow worldwide, leading to “an economic collapse, the likes of which the world has never seen before”.

Respected economist & author, William Engdahl, also agrees that the US will suffer worse than it did back in the 1930′s. He has predicted “10 years of hell” for the US population, and has been quoted as saying that the decline can not be reversed, even if Jesus Christ was the president of the USA.

Engdahl has also launched scathing criticism upon both the former and current US Administration and in particular the actions taken to ‘repair’ the economy. He claims that everything they have done has just made the situation worse, and that Obama has maybe another few months before he becomes the most hated man in America, just like what happened to his predecessor George Bush.

ZOMBIES ON THE LOOSE

PhD economist Marc Faber has taken steps to describe the events which the US can expect to see during the coming years. He has said “I am 100 percent sure that the U.S. will go into hyperinflation”, but described it as a financial profit inflation rather than a Weimar Republic type price inflation.

Faber has warned that in this situation, zombie financial institutions turn nominally profitable in a collapsing economy, for which the public will mistake for economic recovery. After they invest their remaining wealth, the profit bubble will burst and almost all of the public’s remaining money will be gone.

The zombie tag has also been used by one of the world’s great investors, George Soros. He is also of the opinion that the US economy is in for a “lasting slowdown”, as well as the high inflation that Marc Faber expects. Soros is not a fan of the economic stimulus packages, for which he has warned that rescuing US banks could turn them into “zombies” that draw the lifeblood of the economy and prolong the slowdown.

The US administration has been copping it from all angles, even their local institutions. The head of the Dallas Federal Reserve bank has been drawing attention to the big hole in unfunded pension and health-care liabilities caused by incompetent politicians. Last years federal commitments have added an extra US$55,000 for each household to cover, bringing the total to over US$500,000 per household. The government now has a mortgage-sized obligation on each household, except unlike a real mortgage, there is no house as security and it is backed up by nothing.

LIKE A GAME OF MONOPOLY

Damning figures like these have contributed to the notion that the USA will follow in the footsteps of Iceland and soon file for bankruptcy. Iceland got themselves into a mess by lending copious amounts of money worldwide, which the borrowers now lack the capacity to return. There have been rumblings that Switzerland is also heading down the bankruptcy road, due to similar lending splurges to eastern European nations now plagued by currency devaluations.

England and possibly even Germany may face the same face for their excessive lending. There are even those who claim the USA is already bankrupt, albeit unofficially. Just like Iceland, it is impossible for the US to make the interest payments on their debt, let alone repay the principal. US debt has now blown out to US$65 trillion, which is more than the GDP of the entire world.

But what does bankruptcy mean for a nation? Basically, it means that they can not pay back their external debts and have defaulted on their loans. Their currency will become worthless, leading to a problem with paying for imports, and they will need to seek assistance in the form of further loans to rectify their balance of payment issues.

Other countries may be willing to loan a bankrupt country money, but the most common source of assistance comes from the International Monetary Fund (IMF). IMF loans are definitely not free. In addition to charging interest on funds, the IMF also has the power to stipulate policies and measures for the country to implement, effectively ensuring they fall under the control of the IMF.

Continued at USA’s time as a superpower is over – Part 2

MEN EARN MORE ON AVERAGE

Many media outlets have been reporting recently on the growing disparity between male and female wages in Australia. But is this a true reflection of reality, or are the figures warped to sensationalise the issue and attract attention, and therefore customers to their publications and services?

At the centre of the controversy are the latest figures from the Australian Bureau of Statistics (ABS), detailing the average weekly ordinary time earnings (AWOTE) for full-time Australian workers. They come with a breakdown of the average wage for both males and females, and it is the difference which has become widely publicised.

In terms of an annual wage, the average for men is $66,581, while the women are behind by a sizeable amount, averaging just $54,907. This means that women earn on average close to 80% of the average wage of their male counterparts.

Compounding the woes for the feminist activists, are the figures detailing the rates of growth for annual wages. Men’s wages have been growing at a faster rate than women for the last five years, which is widening the gap between the pay levels of opposite sexes. The proportional difference is now at the highest level in 21 years, with women’s earnings in comparison to men never being this bad since 1988.

STATISTICAL IRREGULARITIES

Despite the global financial crisis, the AWOTE figures showed a wage growth of 6.1% in Australia over the 12 months to May this year. This is in stark contrast to what should be expected, and flies in the face of other ABS statistics detailing drops in income levels or at best, moderate increases.

By their own admission, the ABS AWOTE statistics are unreliable and should not be used to garner impressions of the Australian wage environment. The average wages can be biased upwards due to a number of factors, including low-income workers losing their jobs or moving to part-time employment.

Low-level workers are often the first employees to be laid off during hard times. While a number of middle management staff will also be culled, it is the basic workers who suffer most when a company experiences a downturn in business. They are often production staff who need to be sacked when the production output is scaled back; or people performing jobs considered expendable, such as the backup receptionist or the tea and coffee lady.

APPLES FOR APPLES

Apart from the known irregularities with the AWOTE statistics, there have been hundreds of critics claiming that viewing the overall averages alone can lead to a distorted view of the situation. They claim that if an individual job or role was analysed, that the wages of men and women would be practically identical. When you consider that women generally choose lower paying jobs, an average wage comparison can not be deemed to be a true apples for apples comparison.

This is primarily evident in the unskilled work area and jobs which require little or no formal education. Men tend to navigate towards labouring type work or trades, while women will turn to work roles such as receptionists or administration assistants.

Women also tend to choose lower paying jobs in the unskilled fields, not necessarily because they are unskilled, but rather for the flexibility of working hours that the job may provide. Nothing will ever change the fact that the women are the ones who need to give birth and take the primary responsibility in breastfeeding and raising the child, so job flexibility is preferable to a large pay packet.

The desire for flexibility has seen women dominate the numbers in certain employment fields. Nurses, teachers and librarians occupy the majority of positions in their industries, in addition to industries such as health care, social service, and child care. These jobs are at the lower end of the pay scales, as workers are either not in high demand or easily replaced.

There is also an expectation from customers that women will be performing the roles in these lower paid fields of employment. Although entirely competent, males are still ridiculed for entering the nursing field, and we all seem to have a permanent subconscious image of librarians being from the female gender. But this question really sums it all up – would you send your children to a day care centre run by men?

FEMALE MINDSET

The female mindset has been programmed in a different way to the male mindset, and this can contribute to a lower earning potential. Men are known to adventure into uncomfortable territory and apply for jobs or promotions to positions that they are not suitably qualified for. Men believe they can do anything and are willing to spin a few yarns in order to secure a nice pay packet.

Conversely, women tend to avoid this behaviour, and will generally steer clear of the potential embarrassment of failing at the role. They will only apply for roles they are qualified for and that match their skill-sets. Men also have an over-inflated view of their worth and will tend to request pay rises more frequently, with women preferring to wait until one is given by their employer. The same mindsets are evident in the interview process as well, with men often requesting a higher salary.

Many women are uncomfortable being in control of an organisation, instead preferring a set role with routine tasks. They tend to be conservative and seek surety in their work, while men will be the risk takers and have a thirst for both control and adventure. These mindsets are part of the reason why men dominate the senior positions of companies. Although there are some capable women at the top, the upper-management level is widely known as a boys club.

There is also the physical barrier that holds women back from salary increases, in addition to the mental factor. The harsh reality is that almost all working women will at some stage take time off to have children. With many positions increasing salaries based on years in the job, taking time off to start a family means missing out on regular pay raises.

It is important to remember that all of these factors are reasons why women earn less than men, but none of these can be construed as evidence for a bias towards paying men more. For identical roles, women generally earn comparable pay. While bias towards men still exists in the workforce, it is minimal in this day and age. Most employers will look at the applicant’s skills and experience, not their gender, and pay an appropriate wage.

RENTAL HIKES

Many tenants are complaining about the recent rental price hikes across Australia. The hikes have been massive in some areas and it is not uncommon to hear of rents jumping by more than 50% over the last couple of years. It is a situation that has left many people struggling to make ends meet.

Worsening an already bad situation, future predictions detail more pain for renters in the years to come. The first home owners grant has been responsible for over 70,000 renters taking the plunge into property ownership since October last year. Now that the grant is being scaled back, there will naturally be more renters in the market to increase demand and fuel the next wave of rental price hikes.

Unemployment figures are also expected to rise, which in turn brings more new players into the rental market. The national vacancy rates are currently under 2%, with this figure expected to reduce even further over the next few years. But low vacancy rates and high demand aren’t the only reasons behind the rent rises. Homeowners are also being hit with bigger bills such as local government rates and insurances, and tenants are becoming more unreliable with rent payments and correctly maintaining the property. Rents need to increase so the investors can make ends meet.

Home owners are often quick to remark that renters should stop whinging about the prices and buy their own homes. But this criticism should be directly at the people who have a choice between buying and renting, rather than the battlers who have no other choice but to rent. The reality is that while it might seem like a logical and simple idea, it is just not that easy to buy a house these days.

MANY REFUSED HOME OWNERSHIP

Figures from the real estate industry and mortgage brokers paint a grim picture of the reality of Australia’s lending market. In the last year, the rate of first homebuyers being rejected for housing loans has skyrocketed, with reports of the increases being anywhere between two to three fold. The situation is so ridiculous that many mortgage brokers are refraining from submitting many applications to banks because they know that they will be rejected.

The reason is that loan requirements are now far tougher to meet. One of the reasons is the rejection of applications with minor defaults, whereas previously banks would look at anyone with major defaults, as long as they had them paid off. Banks have also stamped out the habit of receiving deposit gifts from family members, and now require a record of savings history. Minimum deposits have also increased from 5% to 10%, and mortgage insurance premiums have risen by around 20% for two straight years.

PRICES OUT OF REACH

Compounding the problems for potential first homeowners is the Australian property market bubble. The first home owners grant was supposed to give more Australians the opportunity to own their first home, but instead it has succeeded in forcing many out of calculations. The grant has fuelled property speculating and prices have jumped to astronomical proportions.

The homebuyers who were approved can take part of the blame for flooding the market and forcing the others out, with figures showing the percentage of new home loans being taken by first owners compared to other buyers has jumped by 80%. Loans for first homeowners during the June quarter had doubled from that in the previous quarter, showing that a temporary exit by investors from the market can not be the sole reason behind the percentage increase.

Putting blame aside, the International Monetary Fund has estimated that Australia’s property market is overpriced by around 20%. The recent price rises now mean that Australia has the third least affordable property market in the world, narrowly behind Ireland and Spain. With Distressed property in Spain on the rise a similar fate may face Australians. Our rises have been in stark contrast to the experiences of other nations after the global financial crisis, such as the US, which has fallen by more than 17%, the UK, which has dropped by 11%.

The International Monetary Fund’s estimates have been confirmed by the Australian government’s chief advisor on housing affordability, Julian Disney, who also agrees that 20% is an accurate estimate of the amount Australia’s housing market is overpriced. In a startling admission from a government figure, he also admitted that the housing bubble was a reality, when he described the property market as being “an over-inflated balloon”.

Mr. Disney went on to blame the first homeowner grants for causing the housing bubble and reducing affordability to “very bad” levels. But perhaps the most worrying moment was when he stated the housing market needed to be gradually deflated. We can only wonder what the government has in store for the homeowners of Australia. First homeowners have a right to be angry knowing that the government has coaxed them into buying property and now plans to reduce the property values across the country.

GLAD TO BE DECLINED

Considering that the Australian government is aware of the property market bubble and the need to deflate it, renters being declined for housing loans should be praising God in the heavens for saving them from the fate facing approved first homeowners. If the property market falls by the same amount which the IMF has declared it overpriced, a 20% drop in value on an average $300,000 mortgage equates to a $60,000 loss.

A property value collapse is just one end of the stick, as rising repayments are set to cause more pain for both new and existing homeowners. Interest rates are expected to jump by around 2% over the next couple of years, pushing loan repayments to unsustainable levels. Research firm Fujitsu Consulting estimates that in that period, the number of households struggling to make their home loan repayments will increase from around 500,000 to over 1 million. With unemployment also set to rise, it is a good time to be out of the property market.

In what many would call sweet karma, the homeowners poking fun at renters and their price hike misfortunes could soon fight themselves joining the rental queues and fighting to find a suitably priced property for their family. But the situation is not a joke and the banks are well aware of the doom on the horizon. That’s why it’s not that easy to buy a house now, and will get even harder in the future.