What is the U.S. economic outlook for 2014? Not good

Every four to six years, the U.S. experiences an economic slowdown. It happens like clockwork. The current bull market is now in its fourth year.

For those who missed the recovery,   it’s probably a little unnerving to consider “this” a bull market or an economic recovery. And it’s probably just as unnerving to think that we’re already primed for another correction. While the markets may be performing well, the average American isn’t. Unemployment remains high, as does household debt. Gross domestic product (GDP) is essentially flat. Housing may be the one bright spot, but even that sector is fragile at best.

How does the Congressional Budget Office (CBO) feel about the U.S economic outlook in 2014? Pessimistic. The CBO expects the U.S. economy in 2014 to remain moribund and for unemployment to remain near eight percent. But it gets better. It also projects that both actual and potential real GDP will eke out 2.25% annual gains between 2019 and 2023. (Source: “The Budget and Economic Outlook: Fiscal Years 2013 to 2023,” Congressional Budget Office web site, February 2013.)

For the average American trying to make ends meet in 2014, a bull market and a recession will probably look—and feel—the same.

The roots of America’s financial crisis and the U.S economic outlook for 2014 can be traced back to 2007, when the U.S. housing bubble burst. This sent the dominos tumbling, and the United States entered an economic meltdown in 2008. Despite government intervention, the economy has sputtered and slipped in and out of recession.

Since 2008, the actions of the Federal Reserve have put the U.S. on a path to economic failure. To stem the economic slide of the U.S. housing collapse that first surfaced in 2005, the Federal Reserve unveiled three different quantitative easing (QE) efforts. Since 2008, the Federal Reserve has printed off trillions of dollars, and it continues to add to that number at a staggering rate each month.

The extra dollars pumped into the economy were supposed to spur economic growth. It had the reverse effect, shrinking the buying power of each dollar, the driving force of inflation. As the U.S. dollar continues to decline in value against other world currencies, goods imported into the U.S. become more expensive.

Will there be a fourth round of quantitative easing? Probably not. But that’s only because the third round is open-ended. You could even call it “QE Eternity.”

When the financial crisis began in 2008, the U.S. national debt stood at $9.2 trillion. Based on the White House’s own figures, the national debt will reach $20.0 trillion by the end of this decade—about 140% of our current GDP.

The U.S. is not alone. Government debt in advanced economies has climbed to its highest level since World War II. Gross debt levels in many nations, including Japan, Greece, Italy, Portugal, and Ireland, are all above 100%.

Public debt is not a new phenomenon. Since 1900, a number of economically advanced countries have teetered on the heels of serious government debt.

Reducing government debt takes a long time; especially with continued global economic headwinds. That said, even under the best circumstances, it can take years. Case in point: now, 15 years after debt rose above 100%, it’s only marginally lower. (Source: Simon, j., et al., “Press Points for chapter 3: 100 Years of Dealing with Public Debt Overhangs:

World Economic Outlook, October 2012,” International Monetary Fund web site, October 2012.)

Successful debt reduction requires fiscal constraint and policies that support growth. This includes supportive monetary policy and measures that address structural weaknesses in the economy.

Those ingredients are not currently in place in the U.S.

After five years of support from the Federal Reserve, U.S. economic growth is anemic. The International Monetary Fund (IMF) lowered its growth estimate for the global economy to 3.6% for 2013 and warned that future revisions would likely be lower.

Economic instability, political deadlock, the business community’s mistrust of the government, concerns over its fiscal health, deterioration in the development of its financial markets, and a weak American dollar have cut into corporate America’s bottom line.

These lower margins, in turn, could lead to further layoffs, sending millions of working Americans into unemployment. To rectify the situation, the government increased and expanded taxes to generate capital.

In 2014, we will still be waiting to see the results.

America’s future economic growth will depend on its ability to innovate, create, and reinvent the way it does business. And it will need to meet the growing and evolving untapped demands of an increasingly challenging global environment.

The actions taken since 2008 have put our country’s economic future on the backburner.

The U.S. economic outlook for 2014 is grim. In 2014, investors should be very worried—and they should be prepared.

The 25 Year Great Depression, Will Hard Hit The U.S. Economy

The 25-Year Great Depression, Intelligence Community fear a $100 Trillion American Meltdown.

It’s no more secret that the U.S. economy will soon become a victim of great depression once again. The U.S. Federal Reserve is trying hard to cover up the next dangerous crisis, which will not only bring down the US economy, but also hit the entire global economy.

Jim Rickard, the Asymmetric Warfare and Financial Threat Advisor CIA, believe that the world’s powerful central bank is bankrupt now. He further states that the Janet Yellen, the Federal chairperson, will do whatever to keep people in the dark. If Jim is correct, every US citizen is supposed to fear this inevitable endgame.

What Senator Rand Paul Thinks About Federal Reserve

the 25 year great depressionRecently, Senator Rand Paul in his emotional speech asserted that the Federal Reserve has now become “insolvent”. He emphasizes that the Fed’s secret operations have made the situations critical and things have gone too long. Americal public has full rights to know what preventive measures Federal Reserve is undertaking to secure the nation’s economic stability and solidity.

A 25-year Great Depression Will Kill The Dollar

The estimated date of 25-Year great depression is March 2nd, 2015 and a lot of mainstream economists believe that it will be impossible for US government to stop this disaster. Jim Rickard has shared a startling collection of charts that show the US economy has reached, or exceeded, the critical level of the stock market. That said, the US dollar and financial institution are in severe condition than they were in the 1929 depression.

Jim presented two charts to reveal which bank will start breaking down and at what period. The first chart shows how steadily the US federal raised its financial reserves. Even when the recession hit our economy, they kept reinforcing their financial backing.

Today, Fed Reserve has $56.2 billion cash in hands. Well, this figure may look pretty good, but you’ll be shocked after viewing full picture. You should calculate the currency the Fed Reserve has in hand against the debt they have taken since the last depression. Now, the picture becomes scarier when you see the balance figure that goes up to $4.3 trillion. This means that the US Fed is leveraged 77-1, which was 22-1 in 2008 meltdown.

Jim, along with some other CIA professionals, warns that the whole thing is unstable and it can explode at any point of time. He came up with a copy of the Janet Yellen’s playbook. And, while millions of US citizens have no idea about her big plans, this playbook exposed the whole thing. She’s just intended to keep printing the money. Don’t think that the Federal knows what they’re going to do, they’ll print as many dollars as they want, but if people aren’t going to use it in the economy, it’s all going to collapse in the end.

A disquieting report enclosing the consensus view of 16 branches of the U.S. Intelligence Committee unseals that these intelligence agencies have already started to guesstimate the effects of the fall of the dollar in the global economy.

And the Americal supremacy, a leading superpower, will be wiped out just like the British Empire, which lapsed after World War II.

Now, the question you should be asking yourself is “what if Jim and other economists are right?”

Blackout USA – The Biggest 21st Century Apocalypse

The 21st Century is full of uncertainties. The evil of man, mother nature or God can throw any disaster towards us and at any point of time, without even giving us a single hint. Are we well prepared for the next disaster or a series of upcoming disasters? The next blackout USA will turn the United States into a 3rd world country. It is just coming in next 12 to 13 months and if you’re thinking that our government has proper gears to shield us against any high altitude catastrophe, then you are certainly WRONG!

The upcoming blackout USA is so dominant that it will blow up 281 million US citizens in its first level. And, although CIA, NASA and Pentagon are trying to warn us like crazy, no mainstream media channel or radio is willing to talk about this.

Well, it may sound unrealistic at first, but after looking at the shocking facts in this post, you will witness the indubitable proof of this “mother of all cataclysms”. In fact, just few seconds after this blow, all your social structures will be upturned and will place you at the peak of “food chain”. The majority of your preps like home protection systems, stockpile and so on, will become useless, if you won’t get ready for this devastating debacle without losing much time.

Here’s what it’s all about-

The Solar Flares

NASA is constantly issuing forewarnings about this. The solar flares are weather phenomenon of space. After specific time period of the solar cycle, the sun will start to experience violent activities on its surface and this will cause massive explosions that can affect Earth in many aspects. Eventually, the large shafts of solar are emitted into space and once they hit our environment they’ll cause EMPs (Electro Magnetic Pulses).

blackout usa

EMP fries the sensitive circuits in just a few seconds, the ones that are readily available in most of your home appliances, gadgets, electronic systems and a lot more. A single hit of solar flare will break down all major power grids in US, telecommunication satellites, transportation systems and even the utilities like water. It will just send you back to the dark age!

The blackout USA will ultimately trigger numerous death waves-

  1. First, citizens would die just after the EMP attack. The condition of aged and people on the life-support will be even worse, as most of the hospitals and medical systems won’t function properly without the steady power supply.
  2. Next, the chronically ill are wiped out. People won’t be able to get their necessary medications just like the previous death waves of bubonic plague and similar pandemics.
  3. The third one will be poor sanitation. Due to the absence of waste handling systems or garbage collecting, and also due to the first death wave that would apparently produce huge sanitation problems, it will trigger a massive pandemic.
  4. Finally, the last death wave would be led by desperate looters. They’d bang your society and become vulnerable day by day. Just memorize the London riots or what happened in the Katrina and during the hurricane Sandy.

End of America 2014, Bill HR 2847; a War on Tax Evasion or Americans?

End of America 2014, 1st July

After decades of worry, the U.S celebrated with a collective sigh of relief on December 21, 2012, when the end of America was averted after the much-lauded cataclysm associated with the Mayan Calendar failed to materialize.

Two years later, and the end of America is once again in sight. On July 1, 2014, Bill HR 2847, better known as HIRE (the Hiring Incentives to Restore Employment Act) goes into effect. At first glance, Bill HR 2847 seems innocent enough; it’s designed to provide payroll tax breaks and incentives for businesses to hire unemployed workers. There can’t be very many people opposed to that.

So why are so many people predicting the end of America on July 1, 2014? You have to dig a little deeper into Bill HR 2847 to find out. A section of that bill, known as FATCA (the Foreign Account Tax Compliance Act) makes it law for foreign banks to report information about U.S. account holders to the IRS; those foreign institutions who do not comply are subject to a 30% withholding tax. The first flow of information on Americans under FATCA is due in 2015, and will cover 2014 accounts.

Why are so many Americans afraid of July 1, 2014 (or F-Day)? Many believe it will usher in the collapse of the U.S. dollar virtually overnight. The fear is that foreign banks will not want to have to deal with the IRS and will avoid dealing with American customers.

And why would any bank not want to have large deposits of U.S. dollars; the global reserve currency? Maybe because they don’t think it holds as much store of value as it once did.

After the U.S. economy tanked in 2008, the Federal Reserve stepped in and took the extraordinary measure of holding interest rates artificially low (near zero) and printed off more than $3.0 trillion through its quantitative easing strategy. The goal was to make it easy for banks to borrow money and pass the cheap money onto customers; stimulating economic growth.

It’s pretty incredible to think foreign banks wouldn’t want to hold large quantities of the global reserve currency. Or is it?

Unfortunately, creating $3.0 trillion out of thin air and dumping the newly printed dollars into the U.S. economy devalued the currency. In conjunction with a devalued dollar, America has also seen its national debt skyrocket from $10.0 trillion before the markets crashed in 2008 to more than $17.5 trillion today.

So why would a foreign bank choose to simply ignore U.S. customers? Because there are stronger, more reliable economies out there: Australia, China, Canada, France, Germany, and Russia, to name a few.

The U.S. dollar has been the global reserve currency since World War II; in effect, Americans can deal directly with any country using their own currency. That means the U.S. can just print off money whenever it wants to either get out of debt or buy something.

Not so for the rest of the world. If France wants to buy oil from the Middle East, it needs to exchange its currency into U.S. dollars. And it can only get U.S. dollars by selling products and services others want to buy first.

No bank is going to want to use a devalued dollar as their reserve currency. With fewer foreign banks wanting to hold large reserves of U.S. currency, the U.S. will no longer be able to keep the printing presses running 24/7 to buy their way out of debt.

Thanks to a devalued dollar, Bill HR 2847, and FATCA, the average American will not be able to exchange their devalued dollar into more stable currencies.

Come July 1, 2014, the U.S. currency could come to a crashing end, taking your life savings along for the ride!

Unfortunately, this isn’t going to happen. Granted, FATCA will not be good news for some Americans with offshore bank accounts, but for the majority of us, HR Bill 2847 is actually a good move for the economy.

In 2010, the last year for which data is available, the U.S. Treasury lost a record $337 billion to tax evasion; that translates into 2.31% of the country’s total GDP. And at $1.25 trillion, America also has the world’s biggest shadow economy.

During the financial crisis, a number of U.S. communities declared bankruptcy. In 2008, Vallejo, California declared bankruptcy; businesses left and taxpayers fled. The economic blight was felt by other towns and counties around the U.S., including Central Falls, Rhode Island; Harrisburg, Pennsylvania; Boise County, Idaho; and Jefferson County, Alabama. In 2012, California municipalities, including Stockton, San Bernardino, and Mammoth Lakes, all declared bankruptcy. And in 2013, Detroit declared bankruptcy.

The fact of the matter is that communities suffer and economies falter when the demand for public services increases during times of economic hardship, but there are too few paying taxes. Tackling tax evasion then, according to Bill HR 2847, is essential if America is to continue to provide healthcare, education, pension, and the other benefits we rely on.

What about the devalued U.S. dollar and banks not wanting to deal with the IRS? The fact of the matter is that the global economy is still pegged to the U.S. dollar, and banking systems cannot afford to sever ties with the U.S.

Case in point, F-Day was supposed to be on January 1, 2014, but it was deferred until July 1, 2014. It was not delayed because banks had to deal with a rash of American client withdrawals or software upgrades to handle FATCA; it was delayed due to overwhelming interest in FATCA internationally.

So far, the U.S. has signed 35 intergovernmental agreements: these include Australia, Canada, the Cayman Islands, France, Germany, Guernsey, Ireland, the Isle of Man, Jersey, Japan, Mexico, South Africa, Spain, Switzerland, and the United Kingdom. The U.S. has also reached agreements with 36 other jurisdictions, including the Bahamas, Brazil, India, New Zealand, Singapore, South Korea, Turkey, the U.A.E., and Hong Kong.

So, will HR Bill 2847 usher in the end of America on July 1, 2014? No. The American economy will not come to an end and the world will not embrace a new reserve currency—at least not yet.

As stated above, America is the world’s biggest economy and the U.S. dollar is entrenched in the global economy. Yes, the U.S. dollar has been devalued, but it still holds value when compared to other currencies and economies. And even when the U.S. economy goes through a major retraction, it still has the economy and infrastructure to sustain itself, grow, and help drive the global economy.

Instead of pondering the what-ifs about July 1, 2014 and HR 2847 being the end of America, it might be better to look at what America will look like at the end of 2014.

Take a cursory look at the U.S. economy and you’d be forgiven for thinking the American economy is on the mend after weathering the Great Recession: Wall Street, the barometer for the U.S. economy, is trading at record highs; the five-plus-year bull market is running unhinged; housing prices have rebounded; and the American jobs market has improved.

But scratch just below the veneer surface and you’ll get a different story. The S&P 500 and Dow Jones Industrial Average are trading in record territory, but it’s not because the company’s that make up the indices are particularly strong.

During every successive quarter in 2013, more and more companies on the S&P 500 revised their earnings guidance lower. During the first quarter of 2013, 78% of S&P 500 companies issued negative EPS guidance; 81% did in the second quarter, a record 83% did in the third quarter, and 88% did in the fourth quarter. And 2014 is starting out just as dismally; during the first quarter of 2014, 83% of S&P 500 revised their earnings guidance lower.

Why the run-up on the stock market? To compensate for weak results, companies masked their poor earnings and revenues with cost-cutting measures and near-record stock buyback plans.

The U.S. unemployment rate has improved to 6.3%, but the underemployment rate is at an unacceptable 12.3%. On top of that, 46.1 million, or 14.5% of the country, receive food stamps. Further, more and more Americans are in debt; the average credit card debt is $15,191, the average mortgage debt is $154,365, and the average student loan debt is more than $33,000.

Everyone seems to point to the U.S. housing market as the silver lining in the economy, but that’s beginning to tarnish. While U.S. housing prices are up 25% since the beginning of 2012, they still need to increase more than 20% to reach their pre-recession highs.

On top of that, the U.S. housing market is too expensive for most first-time home buyers—the litmus test for how well the American economy is doing—who accounted for around 16% of new home purchases in April, down from a range of 25% to 28% between 2001 and 2007.

As for existing home sales, first-time buyers made up just over a quarter (29%) of purchases; the 30-year average for first-time homebuyers, and a number economists consider healthy, is 40%. What’s worse, homeownership in the U.S. is at its lowest levels in almost 20 years.

Bill HR 2847 will not usher in the end of America on July 1, 2014, but the fate of America at the end of 2014 is a different story altogether. Wall Street is busy cheering record highs on the S&P 500 and Dow Jones. Meanwhile, Main Street is saddled with debt, stagnant wages, high underemployment, and consumer sentiment is shaky at best.

Will Buried Provision in H.R. 2847 Decimate U.S Economy on July 1, 2014?

Did the U.S. government really seal the fate of the U.S. economy back in March 2010, when it passed H.R. 2847? On July 1, 2014, H.R. 2847, better known as HIRE (the Hiring Incentives to Restore Employment Act) goes into effect. On the surface, the bill provides payroll tax breaks and incentives for businesses to hire unemployed workers.

But it’s a little-known provision within Bill H.R. 2847 that is causing some financial pundits to predict the end of America. The provision known as FATCA (the Foreign Account Tax Compliance Act) insists foreign banks keep better track of the flow of money owned by U.S. citizens.

FATCA requires banks in other countries to send the IRS personal information (name, address, and account information) about transactions their American customers make. If a bank fails to comply, the U.S. will impose a 30% withholding tax.

The fear is that foreign banks will not want to have to deal with the IRS and instead willchoose to take the path of least resistance by avoiding American customers, and by extension, their U.S. dollars altogether. At the same time, FATCA could also be cost-prohibitive for small- and medium-sized foreign banks; meaning it’s cheaper and easier to just divest from U.S.-based assets.

Why would any bank willingly refuse to do business with a U.S. customer? Because there are more financially secure markets elsewhere for foreign banks to invest in: China, Russia, Germany, Australia, France, Canada…the list goes on. How is that possible? After all, the U.S. dollar has been the world currency since World War II, and being the world’s currency means Americans can deal directly with any country with their own currency.

In effect, the U.S. doesn’t need to produce anything to create wealth; it can just print more money to get out of debt or create the illusion of liquidity. The same cannot be said for the rest of the world, however, If Germany wants to buy oil from Russia, it has to exchange its currency for U.S. dollars; it can only do this by generating revenue from products and services others want to buy.

Why will the world no longer want to favor the U.S. dollar as the reserve currency? Simple: the Federal Reserve has, with its quantitative easing policy, dumped more than $3.0 trillion into the U.S. economy since 2008. Where did it get the money? It printed it out of thin air.

Its simple math: the more there is of something, the less value it has. Not only has the U.S. dollar been devalued, the country has seen its national debt soar. Before the markets crashed in 2008, the U.S. was in debt to the tune of $10.0 trillion; today, the U.S. holds debt of $17.7 trillion!

With the U.S. dollar losing favor as the reserve currency, countries will no longer want to hold large quantities of U.S. dollars and foreign businesses will turn their backs on U.S. markets. With fewer people wanting to hold U.S. currency, the U.S. will no longer be able to print its way out of debt.

And with fewer foreign banks willing to take U.S. deposits, Americans, with their fists full of devalued currency, will be unable to exchange it for more stable currencies.

So, will H.R. 2847, once implemented on July 1, 2014, lead to the end of America? No, for many reasons. First, the U.S. is the world’s biggest economy; we produce and consumer more than anyone else. While the U.S. dollar has been devalued, it still holds value compared to other currencies and economies.

The U.S. government is also transparent. Foreign institutions can access our economic data and forecasts and rely on the data; the economic data provided by certain other global powerhouses is not quite as trustworthy or transparent.

Instead of concentrating on July 1, 2014 and H.R. 2847 being the end of America, it might be better to look at what America will look like at the end of 2014.

According to the mainstream media, the U.S. economy is back on track after weathering the biggest financial meltdown since the Great Depression. Wall Street pundits and even the U.S. government point to a number of factors suggesting the U.S. economy is back on solid footing: the five-plus-year bull run on the stock market, the major indices trading at record highs, housing prices having rebounded, and the job market improving.

Unfortunately, those numbers do not tell the full story. The major U.S. indices may indeed be trading at record highs, but the economic foundation holding those stocks up is shaky at best.

Since the beginning of 2013, quarter after quarter, more and more companies on the S&P 500 have revised their earnings guidance lower. To compensate for weak results, companies masked their poor earnings and revenues with cost-cutting measures and near-record stock buyback plans.

The unemployment rate is 6.3%, but the underemployment rate is an eye-watering 12.3%. On top of that, 46.1 million, or 14.5% of the country, receive food stamps. And more and more Americans are in debt; according to the most recent data, Americans owe $11.65 trillion in debt. The average credit card debt is $15,191, the average mortgage debt is $154,365, and the average student loan debt is more than $33,000.

What about U.S. housing? Housing prices have risen 25% since the beginning of 2012, but still need to increase more than 20% to reach their pre-recession highs. And the U.S. housing market is too expensive for most first-time home buyers.

In fact, first-time home buyers, the barometer for how well the U.S. economy is doing, accounted for around 16% of new-home purchases in April, down from a range of 25% to 28% between 2001 and 2007. As for existing home sales, first-time buyers made up just 29% of purchases; the 30-year average for first-time homebuyers, and a number economists consider healthy, is 40%. And overall, the homeownership rate in the U.S. is at its lowest levels in almost 20 years.

Bill H.R. 2847 will not be the end of America; on July 1, 2014, America will look identical to the way it does now. But as for America at the end of 2014, that’s another story. The surface data appears really great, but it’s not a true reflection of Main Street. Take a closer, more detailed look at the economic data and you’ll see that the U.S. economy will be much worse on December 31, 2014 than it is today.

To get a handle on debt and raise the standard of living on Main Street, the broader U.S. economy needs to experience sustained growth—and that just isn’t in place yet.