What is your share of the national debt?

 WILL THE DEBT TRANSLATE INTO POORER AMERICANS?

WE ARE GOING TO REALIZE THAT THE DEBT IS NOT MEANINGLESS

For decades many have been warning of the dangers of the growing national debt. We have heard from many that we owe it to ourselves or that it is just a number without any relevance. The only real consequence has been the depreciating buying power of the dollar, indicated by continuous rising prices.

It seems the consequences of the debt are now becoming relevant in that some kind of adjustment is going to be made to either eliminate this debt, mandate a balanced budget or some other real dealing with this debt. Every real policy to control or eliminate this debt is going to be financially painful for everyone.

It is estimated that every man, women and child 's share of the debt is over $106,000. Every households share is $273,567. Of course, probably at least half the households in America do not have a positive net worth, so the share would fall on those who do have a positive net worth, which could translate into twice that number.

Of course, we are not going to correct this situation by directly having Americans kick in their share of the debt, but we can expect that it is going to cost us all, in one way or another. 

To default on the debt would be a decrease in the investment value that is tied to pensions, 401Ks and bank accounts of all Americans who have any savings or investments. While a direct default is unlikely, some sort of measures are going to be taken to deal with this debt in the very near future.

The ability of the federal government to engage in deficit spending is coming to an end and that alone will translate into less money flowing from government to individuals. That would be a fix on the growing of the debt.

Then there is matter of servicing the existing debt, the interest is going to become the biggest budget item in the near future. That is going to require more creative management, like devaluing the dollar, which will make all dollar holders poorer, but increase the ability of the government to pay off debt. 

This could be done by revaluing the dollar at some extreme dollar to gold ratio, like $40,000 an ounce, then the debt could be paid off with gold. It would be actually an accounting gimmick, but it would wipe out the debt and no one would have much recourse but to take the payoff and assume the loss of purchasing power of their investment. It would result in the inability of the government to sell more debt, which may be a good thing. The government would be required to act in financially sound way in the future. It would sort of be a national bankruptcy that would pay off the creditors with devalued dollars, actually at least fair to all in the return on investment would be equal, but less value.

It will most likely be a combination of all these ideas and more, but the result will be an end to the deficit spending inflationary cycle and will result in most Americans becoming poorer, but possibly with a more stable economic future and the avoidance of an overall economic collapse.

100 days of Trump.

 THINGS WILL NEVER BE THE SAME

THE INEVITABLE IS BEING ACCELERATED

I am sure there will be many opinions about the first 100 days of the new Trump administration. The Trump haters are still hating and will pile on with every possible catastrophic result of Trump's politics. While 100 days may have been very important in the past, I suspect we will all have to wait a little longer to judge the results of many of these novel policies.

What is coming in the next 4 years is going to be momentous history making period for the world with or without Trump. It is the end of an era, and what comes next will be either managed or we will be the victim of the changes. One good thing about Trump is that he is able change directions, and in an era that has no guidelines, some things may have to go to option B or C or whatever will work the best. The reality is that we need to be hopeful that we end on our feet with the least bad result.

So, First, Trump, as he promised, did focus on regulating the border and deporting criminal elements that are in the country illegally. While deporting them all will take time, it does appear that the border is now much tighter than in the past.

Trump's attempt to end the war in Ukraine, while there are discussion that did not happen in the past 3 years, no solution has been accepted by those involved. If you face the positions of Russia, compared to Europe and Ukraine, only military defeat will end this conflict. Of course, it will all end in negotiations, but not until defeat is staring someone in the face. Trump is best to end U.S. military involvement, it can not have any positive result for the U.S. 

Same goes for the Iran/Israel situation, Many realize that a U.S. assisted attack on Iran will be the end of Trump's presidency and some believe that is preferable to any negotiated peace with Iran. Iran does not have nuclear weapons and it seems that they can defend their country very well with conventional weapons, a reality that many want to dismiss. War with Iran will usher in a global economic crises and may be so devastating to Israel that they will consider using nuclear weapons.

Tariffs, Trump said he was going to use tariff's to bring about balance in trade. The long term result is till out, but it looks like it will be a very painful result one way or another. Would a one by one negotiation have been better, maybe, but this approach has indeed captured everyone's attention. I suspect we will know if this is working in the next 100 days.

The biggest threat to the future of the United States seems to be not the focus of much of the country and that is the debt bomb, ready to explode at any moment. The dollar reserve currency status is ending, with the need for major financial, budgetary restraint by the U.S.. The period of overspending, overbuying and under producing resulting in massive debt is coming to an end. This would be happening, no matter who would be running the country and can no longer be kicked down the road.

The world is awash in crisis, It would be best if the country was united in admitting its failures of foreign policy, fiscal irresponsibility and work to manage the severe changes coming. These changes are coming and will be very painful. Buckle up, and don't make the mistake of partisan politics and believe these problems are the result of Trump. We all better hope that we can get the best result in a difficult no win situation.

Ukraine conflict, Bad choices result in bad results.

 AS LONG AS IT TAKES, IS NOT A PLAN

NO SERIOUS ALTERNATIVES TO CONCLUDE UKRAINE DISASTER

This week we watch as Trump is labeled a Putin asset, That they are abandoning Ukraine, that they are giving Putin a win, and Europe must borrow the excess savings of its citizens to build an army to go to war with Russia. These are not alternative plans, but just emotional naysaying in an attempt to blame others for their bad decision. Decisions that they made over 20 years ago to expand NATO and bring about the dismemberment of the Russian federation, because they covet the resources of Russia.

They only have the narrative that everyone must fear Russia as they are about to conquer the world. They attempt to convince people that after Ukraine, Putin will move to take over all of eastern Europe. Everyone must keep supplying Ukraine with weapons and eventually Russia will collapse and they will be victorious. Just more of the same, no real plan, other than more death and destruction to save face for the bad decisions they made when they all signed on to the Ukraine project, the culmination of regime change operations of the last 3 decades.

No matter that the economic and social situation in Europe is on life support. No matter that the U.S. is so deep in debt from 30 years of regime change operations that have cost over $10 trillion dollars and growing. No matter that the western economic system is about to be divorced from 80% of the rest of the world, caused by the loss of credibility and hypocrisy of using that system to punish anyone who does not submit to their plans. No, just stay the course, no matter what for however long that it takes. A typical strategy of anyone who refuses to admit their mistakes and is willing to hit bottom before making the necessary admission that they have been all wrong in their decisions.

The sad reality is that they are willing to take the rest of the world down with themselves rather than admit that their plans have failed, they were stupid and delusional from the beginning, and if not reversed, everyone and everything will be destroyed. 

Of course, that is better than losing face and the end of Ukraine can now be blamed on Donald Trump, which will be their consolation prize for their evil plans that resulted in the death of millions, with no positive results.

Is the West destined to lose its economic dominance?

 WE ARE WITNESSING THE RESULT OF STRATEGIC POLITICAL FAILURES

CONFRONTATION NEEDS TO BE REPLACED WITH COEXISTENCE  

In retrospect we can now see that the present series of global crisis is culminating in the emergence of a multipolar economic reality. It may be very well be too late to rescue the West's history of economic dominance. A continued effort to confront, contain and weaken this new economic reality will only hasten the economic decline of the West.

Much of this is the result of decisions made after the end of the Soviet Union. Rather than embrace the opportunity of peaceful and cooperative prosperity it was viewed as an opportunity to use the power of being the only superpower to fashion the world with the use of that power. It escalated into regime change and economic sanctions and intimidation.

While much of this started directly after the breakup of the Soviet Union, a turning point was made in 2008 when Bush 2 made his remarks about expanding NATO into Ukraine and Georgia, followed by regime change operations in both those countries and then the efforts to end energy sales by Russia into Europe. It is no coincidence that the BRICS economic union was founded the same year.

While the energy cooperation between Russia and Europe was beneficial to both, it was viewed as allowing Russia to prosper. Europe in reality will economically decline without the affordable energy available from Russia, but it seems control is more desirable than buying it, even with lucrative long range contracts. 

I would expect that Europe and Russia will not reestablish economic ties for decades, if ever.

Then there is China, which has in 50 years transformed the nation to the fasted growing economy in the world. It no longer is just a low cost producer of consumer goods but has emerged as an innovative leader in nuclear energy and other high tech inventions. It is the manufacturing giant of the 21st century.

The massive sanctions and confiscation of Russian assets set off alarms in the rest of the world that they needed to become independent of the western economic system. China began its belt and road initiative which would move commerce in Asia and western Asia by ground rather than be vulnerable to western naval power, at the same time it has began to expand its navy to protect its shipping worldwide. 

It is no secret that the west, saddled with enormous debt and a limited manufacturing capacity will not be able to compete with this immense manufacturing capacity. While these realities are labeled as aggression by the west it is just the realistic reaction to threats of war and now trade war.

One can expect that China is now willing to forgo commerce with the west and to work to build economic ties with the rest of the world. While their economy will suffer in the short run, the suffering will be felt by all involved.

While the west was engaging in regime change and violent overthrow of countries and doing it with borrowed money, the BRICS group has been building relations and commerce based on mutual prosperity. Both Russia and China have made huge diplomatic inroads in Africa, the middle east, the whole of Asia and even South America.

While the hope for the United States to rebuild its manufacturing base has good intentions, it would take 30 years of a unified approach, which is not on the horizon, if it made all the right decisions. The U.S. political system is more concerned with capturing political power and reaping the spoils of the bureaucracy.

The reality is Russia and China understand their position with the west and that they have no future in the western economic system, sadly much of the world is going to join them.

 

Ukraine peace initiative over?

 U.S WILL LIKELY END SUPPORT

EU NARRATIVE EXPECTED TO GO SILENT

It seems the efforts to come to a negotiated settlement have now come to an end. Ukraine has remained steadfast in its unwillingness to concede that it has lost part of its country. It may soon realize it will be losing more of its country in the months ahead.

The hard support of the UK and some NATO members can now be expected to focus on other problems in western Europe and they are many. We can expect some lip service to their undying support for Ukraine but it will be another matter to come up with a Trillion Euros to bolster NATO and to continue to finance the Ukraine war.

It seems that Russia has won the Ukraine military conflict and is also winning at the diplomatic table. Zelensky has squandered much of the good will for his country by appearing uncompromising and also unappreciative. It is understandable that he bought in to the narrative of U.S. politicians and NATO members to embark on this Ukraine project. He rightly should have some resentment and alienation after a million Ukrainian deaths, a loss of 20% of the country and no end in sight. He is now caught between the right wing zealots who will quickly dispatch of him if he should compromise and the other negative alternative. It is lose, lose for Zelensky and Ukraine. 

The best alternative is for Zelensky to move on and leave as a hero of his country, and let someone else deal diplomatically with Russia. A new approach that would appeal to the fact that they are historically the same people and it is time to end this affair in the best interest of both countries. There is no upside to continuing this conflict.

Russia is exerting continuous pressure all along the eastern front and moving methodically west. If the Russians perceive that NATO is not going to enter this conflict militarily they may soon conclude that it is time to end this by concentrating its forces and upping the intensity of the conflict. especially toward Odessa and Kharkiv.

There is no way that Russia intends to occupy Ukraine in the west, but do consider Odessa and Kharkiv as Russian cites. If no movement on a negotiated settlement, this is the likely outcome.

For now, U.S. only obstacle to expanded war.

 EVERYONE WANTS U.S. COMMITMENT FOR WAR

ESTONIA, UK, FRANCE AND ISRAEL WANT U.S. BACKUP

The advocates for war seem to be desperate to convince the U.S. that war is in the best interest of the United States. So far, the answer coming out of the Trump administration is NO. It is interesting that there are very few who are openly advocating for peace.

This week we see that Estonia has commandeered a Russian tanker in international water in the Baltic sea. Another little country who believes it can use the power of its membership in NATO to test Russia. One can expect that this military midget is encouraged by the UK and France. We can now expect to see Russia warships escorting its ships in the Baltic, another recipe for an expanded war.

Then plans by the UK and France to send troops to Odessa in an effort to secure Odessa from Russian attack. Somehow they believe that Russia, who has stated otherwise, will fear attacking them. It seems they are willing to sacrifice some of their troops in the hope for a U.S. back-up if they find themselves in trouble.

Then there is the ongoing debate about an attack on Iran. It has been revealed about a Israel plan to attack Iran with U.S. assistance. It has been revealed that Trump has again said, NO. It is no coincidence that all hell is breaking out in the Pentagon, the State department and the Israel lobby. Israel is floating the idea of a sole attack by Israel alone, but we can expect that the fine print includes a guarantee of U.S. assistance if it gets in trouble.

It seems the U.S. is the pivotal player on the future of war, at least for now.

With many serious economic, political and social crisis brewing, a war instigated by the small and weak for their small self interest will hopefully be set aside in an effort to deal with the much more serious issues at stake for the rest of the world. 

Is global monetary reset imminent?

 NEW MONETARY SYSTEM STILL UNDEFINED

WILL IT BE BACKED BY GOLD OR THE CLOUD?

Yesterday Gold blew through the $3400 an ounce level and is well on its way to $3500 today. Some may say it it just an aberration, but many believe there is rush by governments to acquire as much gold as possible. Many believe it is in anticipation of some sort of new Bretton Woods agreement that will be the final nail in the coffin of the dollar being the global reserve currency.

The price of gold in dollars has been steadily increasing since the end of the link to the dollar in 1971. It reached a high of over $800 in 1980, a period of high inflation, and a low of $252. in 1999 when central banks of Europe sold gold to balance their books to meet the requirements for the introduction of the EURO.

The price reached $1000 in 2008, $1500 in 2011, $2000 in 2020, $2500 in 2024, and today is at $3452 up 31% in 2025.

This accumulation of gold has been going on for some years, but now it has exploded into a frenzy of buying, mostly by central banks. It is an indication of much anticipation as to the need for gold in the near future.

The U.S. went off of gold backing in 1971 and at present there is no currency that is backed by anything more than the ability of some government to pay its exploding debt. A debt that is unlikely to ever be repaid by any of them.

Accompanying the increase in the price of gold is also the reduction of the buying power of currency, especially currency of a country that has not balanced a budget in over 50 years.

After WW2 the U.S. possessed the largest store of gold in the world and with its currency backed by and redeemable in gold, that dollar was considered "as good as gold", that reality ended in 1971 and the average citizen really had no understanding of the role of money as a store of value or an asset. Money or currency today is a reflection of government debt and has no intrinsic value over the value of printed paper and the willingness of others to accept it for their labor, goods or other things of real value. As it is steadily losing its purchasing power it is not a good store of value. 

Many understand that a reset is near but it is still not clear what this will mean. It most likely will be a devaluing of most all currencies and a loss of purchasing power on a grand scale. The big government enthusiasts would love to end cash and replace it with a Central bank digital currency that would no longer be in control of the owner, but only a digital entry that could be taxed, confiscated or devalued with a key stroke. I would expect it would result in a reversion to the primitive barter system and a rush to poverty for all but a select few.

The other option is a gold backed and redeemable currency that would be a solid store of value for anyone who holds it. It would greatly limit the excesses of governments to defraud its citizens and even to wage war. We could expect a narrative war from those who would despise sound money and government restraint.

Many believe the current situation can go on for decades, but it does appear the present system is coming to an end. It may be replaced by more than one system and the best system will ultimately prevail after some time.

Tariffs

 END OF GATT AND WTO?

PREVIOUS ACCORDS WERE INEFFECTIVE

Attempts at regulating global trade with the "Global Agreement on Tariffs and Trade"  enforced by the World Trade organization are now looking like they will be replaced by individual negotiations. While everyone signed on to these global attempts, they soon found ways to protect their home business and attempt to gain an advantage from trade. We can expect that the inclination is still going to be attempts at protecting home business. 

One of the problems is that every nation wants to preserve its ability to be self sufficient. In a world were advanced economic socialist countries have a higher cost of living and wages it is very easy to soon lose its independence by becoming dependent on imports. It is so easy to replace domestic high cost goods with much cheaper imports and soon the ability to be self sufficient and eventually a lose of prosperity and stability.

Are tariffs the answer? At one time Tariffs were the only source of revenue for the federal government. It was very self regulating in that too high tariffs would end with no revenue for the government, so they had to keep tariffs at a reasonable level and most likely had to be adjusted periodically to keep the revenue at an optimum level. I doubt that tariff revenue would be able to finance the present socialist economic model, but a moderate overall tariff could be a source of revenue.

The present tariff confrontation by the Trump administration is an attempt to negotiate tariffs with each individual nation. Not only tariffs but other attempts to skew trade in a nations favor by regulations and other impediments. 

The reality is the U.S. has been viewed as a cash cow by many trade partners and allies. This, accompanied by the inattention by other administrations has resulted in large trade deficits with every country on earth. While many refuse to admit it, trade deficits is money and assets leaving the country. A country with a $37 trillion debt needs to squeeze every dollar to hope to end the deficits as a start.

One thing must be noted a 25% tariff does not increase the retail price by 25%. An imported good that is taxed at the cost on entry of say $10 would be $2.50. While this item, say high end sneakers, is sold for $100 it would only raise the price by $2.50 or possibly nothing if the competition in sneakers is high.  The markup on many of these items is very high and it is tariffed on the cost at entry.

These high tariffs on most nations are a negotiation tool that most likely will result in no tariffs and a positive outcome for the United States. The situation with China seems to be far different and at this time it is unpredictable as to the result. I suspect the U.S. is dependent on many imports from China and China does have lots of leverage in negotiations.

Rubio, ready to end Ukraine peace efforts in days.

 TRUMP SOON READY TO MOVE ON TO OTHER PRIORITIES

EU AND UKRAINE NOT READY FOR PEACE

Marco Rubio made it clear yesterday that if no serious proposal in the next few days the Trump administration is going to end its efforts at a peace deal in Ukraine. It is clear that the EU and Ukraine are not willing to come to an agreement in the near future. They still hope for an escalated conflict with U.S. support to defeat Russia.

I would expect that if no progress in days, the U.S. will not only be out of the peace process but also out of support for the war.

More serious dangers to the U.S. interests are underway on several fronts. Trade negotiations with most of the world, risk of a spreading conflict with Iran, that will damage the worlds economy and then the plight of the dollar and the debt crisis.

While Trump claims that Ukraine is not his war, it is sorry to say, a U.S. inspired war. NATO expansion was embraced by Clinton, Bush2, Obama and Biden, we can now see that it was widely supported by the UK and France among other NATO countries. The U.S. knew very well that NATO expansion would provoke a confrontation with Russia. Some hoped to damage Russia, cause a collapse and overthrow of its government, it is not going as planned, but yes it is a U.S. war.  In fact it is a defacto NATO war with Russia. A war NATO can not stomach losing, even while it is damaging themselves economically, politically and soon with social unrest.

It is time for Trump to exert more leadership and publicly admit the failing and publicly end support for this war, or it will continue until much more serious consequences become evident. 

Let the other NATO members place the blame on Trump, as they will surely do, but it will be in the best interest of the Ukrainians and the rest of the world.

Can Trump prevail over those who want war?

 THE RISK OF WAR IS INCREASING

HIGH PROBABILITY OF FALSE FLAG ATTACKS 

The old adage of avoiding war by being strong and prepared for war may no longer be relevant.  In the last few weeks it is obvious that the U.S. is moving assets to the middle east in preparation for an attack on Iran. Many observers believe that Trump has agreed to this in the hope of making a negotiation with Iran. We can assume neither Trump or Iran want a military confrontation, but now that the stage is set, the assets in place, the danger is an incident that pushes the president to pull the trigger for a real and very dangerous escalation, one that once started will end in tragedy.

The same situation, maybe less iminent, is always present in Ukraine. Ukraine has used many incidents to hope that NATO would intervene in their behalf, It is likely they will keep trying.

The the UK and France keep attempting to get some sort of commitment from the U.S. to back them up for an escalation in Ukraine. The latest is Germany promising long range missiles to Ukraine to strike Russia, endorsed by other NATO members. It seems they still believe that they can intimidate Russia and not be exposed to nuclear destruction. 

There is only one person that can stop all this and that is Trump. It may be time for him to publicly message both NATO and Israel and its supporters that there will not be WW3 on his watch and if they want to attempt such a provocation, they may be on their own.

Without the support of the United States there will not be a WW3, and all these barking terriers should cool the rhetoric and forget about some sort of incident to bring about a destructive escalation.

Debt crisis may become overwhelming.

 2008 WAS THE UNHEEDED WARNING

BEWARE OF DANGEROUS SOLUTIONS

While everyone is focused on tariffs and war, the biggest threat to world stability is the debt crisis that has been smoldering for decades. 2008 was a wakeup call that the debt of nations, business and individuals had come to a crisis level. It may have been the last chance to deal with the debt crisis in a responsible way, but the reality is it was again papered over with governments pumping fiat or unbacked money into the system and hoping things would go on a while longer. It seems that time has come to an end and the crisis will need to be addressed.

While I am sure the partisans will immediately blame the whole thing on Trump, the reality is this has been brewing for years. 

What we presently are seeing is that the debt of many nations including the United States is its losing credibility as to its their ability to service that debt.  While the United States has always been the safe haven for money in any crisis, the new safe haven is, what has always been the reality, Gold and soon Silver.

While many still scoff at this reality, we have seen  central banks around the world, particularly in the global south and the BRICS nations are amassing physical gold. We have seen gold today blow through $3300 an ounce. This is a symptom of the rejecting of government bonds and national debt by a growing number of nations and individuals. 

The United States has around $8 Trillion of debt to mature this year, much of it currently in the 1% range and will need to be financed in 4-5% range. Then there is the current deficit that will add another $2 trillion. It is expected that $28 trillion of debt will roll over in the next 3 years and will cause a huge increase in the interest payments owed by the government. In the past, interest rates were driven down by gimmicks like Quantitative easing and just plain pumping money into the system by deficit spending. Any attempt to do that now will cause a collapse of the world bond market and very high interest rates.

We see the Trump administration trying to cut spending, increase revenue through trade rebalancing and soon some other possibilities, but it may be too late and too little to stave off what needed to be addressed decades ago. It effect, we are likely out of time and the natural result of irresponsible spending and debt is going to be corrected.

Currently we see foreign holders of debt selling this debt and buying gold, this includes big holders like China and Japan and many other nations, It will soon spread to individuals and possibly investment funds. The only thing that has stopped the avalanche of selling is that many have not identified where to go with their money, the stock market is at high prices, the bond market is losing and now even gold is at record prices. The bond market, always the safe haven is now becoming suspect and with it debt of any kind. 

This situation will translate into higher interest rates and a crisis that may be the worst in modern history.

The crisis will result in new solutions offered. One is the end of cash and the introduction of Central bank digital currency, it will be the ultimate attempt of totalitarian government control of everything, it would ultimately fail as it would stifle the ability of economic freedom and basic transactions. It would likely lead to even worse solutions.

Another option is the return to real money through the use of gold and silver backed money. It is lilley the BRICS group will be the first to go there and it will cause a rush into any such real money. 

That all of course depends if the other option is to stop all such attempts by war or other dangerous attempts to stop the inevitable.

Neither Ukraine or Israel leaders want peace.

 INTERNAL CONFLICTS AND SABOTAGE OF PEACE PLANS

TRUMP NEEDS TO BE MORE ASSERTIVE 

It is clear that the EU led by the Uk still do not want an end to the Ukraine war, or at least not without their financial interests being protected. That and division in the U.S. administration makes any solution impossible.

While we see Steve Witkoff conducting extensive talks both with Russia and Iran we see both internal and external attempt to sabotage these negotiations. Keith Kellogg the supposed Ukraine envoy seems to be more an envoy of the Uk than the U.S. His proposal to allow France and the Uk to occupy everything west of the Dnieper river in Ukraine, a de facto NATO occupation of western Ukraine, a proposal that will never be acceptable to Russia or even Ukraine. Trump needs to either reign this guy in or eliminate his position as he is not an asset to the situation.

Trump needs to end military aid to Ukraine, including U.S. personnel on the ground, it is all counter productive and will just continue the death and destruction.

As for Israel, it is clear that Netanyahu does not want any negotiations with Iran, but only the complete submission of Iran. While Witcoff is negotiating, Netanyahu's position is the complete destruction of all nuclear facilities and even the possession of Uranium, the destruction of all long range missiles and the de facto disarmament of Iran. Then to top it off, he hoped that the U.S. would implement the "Libyan plan", which by the way is the same tactic that John Bolton used to collapse any talks with North Korea. 

The "Libyan plan" was  the strategy that was used to destroy Libya. Promise Libya and Gadhafi that if they give up any nuclear options then all will be well. Gadhafi complied and even allowed western oil companies access to the oil, then a civil war was commenced, paid for with western money, air support from NATO was provided and the eventual killing of Gaddafi and the complete destruction of Libya. A destruction that continues today with tribal conflict and chaos.

Trump should end the supply of offense weapons to Israel. Israel continues to expand into Syria and is now concerned about push back by Tunkey, who is not going to allow Israel to control Syria.  At the same time, you hear calls in Israel to preemptively strike Egypt because it has extended troops into the Sinai, Egyptian territory. 

Internal division in Israel is growing with hundreds of IDF soldiers signing a petition in protest and Hamas has not been weakened even after the death of 70,000 civilians. It will not take much to ignite this situation with an all out war that the United States will be expected to rescue and possibly not win.

This situation brought about by small counties, who hope to use the power of their allies to save them when they could not engage in unlimited war without their support. All negotiation, all hope of settlement is discarded with the hope of someone else destroying their enemies. The principle of an eye for eye and a tooth for a tooth cannot be conducted with nuclear powers, The global economic and political stability is at risk.

MIDDLE EAST CHAOS part 1 Iran

HOW DID WE GET HERE?

MIDDLE EAST CHAOS  Part 1

IRAN

The Middle East, while an area of unrest for decades, has reached an unprecedented time of violence and instability. This did not just come about by bad luck, but by a series of poor diplomatic decisions and interventions by Western powers and the desire by Islamic leaders for an Islamic Government or Caliphate.

We will try to be as brief as possible and still provide an objective background for this subject.

We must keep in mind that 85% of the Muslim world population is Sunni (mostly in southeast Asia) and 15% is Shia. This split can be traced back to the death of the Prophet. It was a dispute over who the successor should be...the Sunnis believed Abu Bakr was the most qualified to succeed as caliph by consensus of the community.  The Shias believed succession should go to the closest blood relative Ali Ibn Abi Talib. This was the beginning of the divide that has led to wars and disputes for  over 1300 years. While Sunni and Shia Muslims have lived side by side, intermarried, and fought along side each other for long periods of time, there often comes a period when a fight for supremacy erupts. The desire for a Caliphate or Islamic government is espoused by both sects of Islam, neither side would be happy with the rule of the other.

Iran is approximately 95% Shia, Azerbaijan 90%, Iraq 75%, Bahrain 70%,  also large minorities in Yemen, Syria, Kuwait, Saudi Arabia, Pakistan, Afghanistan and Lebanon. The rest of the Middle East and North Africa, as well as Asia, are Sunni. The population of Shias could be 30% in the Middle East. While their differences started over succession, there are also other differences in their beliefs. We are giving this information as it is important background for understanding the Middle East situation, but this could be a very long subject in itself.

While Iran has been able to remain an independent country for over 2 millennium,  it has had a continuing interaction with both Britain and Russia, sometimes in conflict and sometimes in cooperation. Georgia, Armenia  and Azerbaijan were once part of Persia, but were ceded to Russia in the 19th Century. Much of the early trade in Iran was controlled by Britain. During WW2 Iran tried to remain independent, but eventually was occupied by British, Russian and American troops.

Mohamed Reza Shah Pahlavi ascended to the throne in 1941.The British owned Anglo-Iranian Oil Co. and extracted and marketed Iranian oil. When WW2 ended, Iran set out to modernize the country. While the Shah vowed to act as a constitutional monarchy, he increasingly involved himself in governmental affairs and engaged in manipulation of the political process and opposed or thwarted the Prime Ministers.  In 1951 the Iranian Parliament voted to nationalize the oil industry, controlled by Britain. Dr. Muhammad Mosaddegh was elected prime minister after the assassination of his predecessor. Britain responded with threats and sanctions and tried unsuccessfully to move the US under Truman to take action against Mosaddegh.  By 1952 Mosaddegh was becoming more dictatorial and demanded control of the military. The Shah refused and Mosaddeq resigned. He was reinstated after riots demanded he return. He then conducted a national referendum to dissolve parliament. The Shah fled to Baghdad.

Mossadegh, an aging, eccentric academic, was immensely popular with people. He was a nationalist, not a communist, although he had some support of the communists. In 1953 when Eisenhower became president, the British and others were able to convince Washington that Mosaddegh was about to align Iran with the USSR. The Army, loyal to the Shah,  with help from the CIA and Britain overthrew and arrested Mosaddeq. This coup earned the USA and Britain the lasting hatred of large sectors of the Iranian public. Mosaddegh remains a folk hero of Iranian Nationalism.

The Shah took advantage of the politics of the cold war. He was a ally of the west, and friendly to Israel. He initiated reforms including land reform, extending voting rights to women and eliminating illiteracy. There was opposition to these reforms by Shia clerics and supporters of the status quo. The Shah responded by suppressing and persecuting his opposition through his security and intelligence organization, SAVAK, which used tactics including arbitrary arrest, imprisonment, exile and torture. Israel was accused of helping the Shah organize SAVAK.

The Ayatollah Khomeini was exiled to Iraq from Iran in 1965. He moved to France in 1978. He was an opponent of the Shah and preached an absolutist theocratic rule.  His ideas where propagated into Iran by books and cassettes smuggled into Iran. The Shah, suffering from cancer left Iran on Jan. 16. 1979. He appointed Shapour Bakhtiar as Prime Minister. Bakhtiar was unable to keep order, and invited Khomeini back to Iran. Khomeini returned on February 1, 1979. Mass purges began, with many executions, including four military generals. In March a referendum was held, with only one form of government on the ballot, an Islamic Republic, and was approved by 98% of voters in non-secret elections.

Executions were expanded, Kurds, Arabs, Turkomans and other minorities demanded autonomy. Suppression of most rights was the rule and a free press and expression were forbidden. The Sunni neighbors were fearful of a spread of this ideology. The new government allowed the American embassy to be overrun and hostages to be taken. Boycotts and sanctions were imposed by the west. Neighboring countries were being subverted by propaganda from Iran. Economic conditions were deteriorating in Iran. This was the beginning of the chaos that was to follow.

Iranians that I knew in the early 1980's could not return home and their families could not leave.  They detested the reign of the Shah and the excesses of SAVAK, but feared that their lives would be short if they attempted to return home.

PART 2 TO FOLLOW

Originally published 12/8/2015

Is the globalist philosophy dead?

 CAN VOLUNTARY COOPERATION REPLACE TOTAL CONTROL?

WE ARE INDEED AT THE CROSSROADS OF HISTORY

I suspect that most everyone would agree that the world is in a state of flux, economically and politically. As yet we do not know what the outcome will actually look like.

The American revolution was a turning point in global history. Before American independence there was only one system and it was Feudalism, it prevailed everywhere in one form or another, from benevolent dictators to not so benevolent, but it was a system of the aristocracy and the peasant class. Much of your life was determine by your birth, if not part of the aristocracy, you were in reality a slave in one form or another.

The American experiment, with all its flaws, was the greatest social success story in human history. Limited government and the freedom to rise from poverty to high places governed by your own ingenuity and perseverance, truly a system of opportunity. It was attempted to be copied in many places and was the hope of many countries around the world. I suspect that the use of a constitution that is not easily amended was what has allowed America to last as long as it has.

The next social revolution that raced around the world was Socialism, a promise of equality for all, guaranteed through democratic action and enforced by the state. The philosophy was born in the mid 1800's and found full implementation in the founding of the Soviet Union in 1917. Many believed it was a system of utopia that would be the future worldwide. The western world soon adopted much of the basics of socialist thought and through democratic action hoped to demand and enforce equality of result by the power of the state. The bigger the state, the less freedom and opportunity seemed to be the result. A result that conflicts with the natural character and instincts of human behavior.

Social guarantees seem to also stifle the natural instinct to strive for excellence and soon this experiment began to fail. Many found no emotional payback in their occupation and turned to past times and sometimes alcohol and drugs for some semblance of reward.

One must wonder if those who really pushed socialism believed in it or was it just another path to dependence and back to the original system of Feudalism with a new name. 

We all witnessed the unraveling of the Soviet system, a remarkable accomplishment that occured from intentional action by those who understood that it had not future. 

Whether we want to acknowledge it or not, we are now watching the unraveling of the western Democratic socialist experiment. It is under assault from its own excesses of unsustainable debt, a lack of incentive and a declining work ethic. The result of guaranteed sustenance without the incentive or internal demand to excel.

We are also seeing the rejection of the idea of world socialism which is what the idea of global governance really was. It was also a huge step back to world Feudalism, were you may be guaranteed sustenance in exchange for liberty and opportunity.  

We have seen the emergence of some new hybrid systems that at present seem to be thriving, but the danger is, as the present order unravels, that we choose some new hope of utopia in basically a new Feudal system.

When is DOGE going to examine pentagon?

 ASKING FOR $1 TRILLION BUDGET WITH NO AUDIT

TRUMP RISKS HIS CREDIBILITY

We now hear that the Trump administration is asking for another increase in the defense budget. The pentagon needs an audit, not another increase, the defense budget is already near 5x any of the U.S. competitors and still seems to be unable to keep up with the supply of weapons it is supplying to proxy forces around the world. Proxy forces that may still plunge us into WW3 at any moment.

Trump was easily led astray by the bureaucrat generals he nominated in his first administration, they were successful in forcing the squandering of his priorities. Any increase in defense spending will cause a big blowback after the effort to expose waste and fraud in other departments. I suspect the biggest waste and fraud is occuring in the pentagon budget and does not add to national security, but just blows up the budget and puts the country into more debt.

We have been bombarded with a constant narrative of the dangers of Russian and Chinese aggression and at the same time the narrative of the United States has turned them from economic competitors into enemies, they, in their national interest, feel they need to prepare for war with the United States. Now that they feel it necessary to build up their militaries, we have another excuse to spend more on defense, without any accountability for the defense department for 30 years.

It seems Trump has now fallen into the same narrative trap of Biden, threaten everyone with war in the hope that they submit to U.S. hegemony. An economic and military hegemony that is over and the sooner that the leaders of the west admit to that reality the sooner that prosperity and peace can be possible. 

History has shown that when nations continually threaten war and build up their militaries, their predictions will inevitably become true. With a change of administration many saw hope of a change of direction, if that does not happen, then prepare for disaster, both economic and militarily.

It's all about the debt. Is Trump hastening the inevitable?

 CHINA UNVEILS NEW YUAN BASED PAYMENT SYSTEM

MULTIPOLAR ECONOMIC SYSTEM ACCELERATES

It is without a doubt that dramatic changes are coming to the global economic and  political system. One must wonder if the Trump administration believes it is better to rip the Band-Aids off and hasten these changes so stability and new realities can be absorbed. It is most definitely a work in progress and I doubt anyone knows what the real outcome will be.

Much of this has to do with the unsustainable and growing U.S. debt. Each point of interest rate cost the U.S. $1 billion in interest. It seems the hope was to drive the yield down on treasury debt and lessen the interest problem on $9 Trillion of debt maturing this year, Over $27 Trillion in the next 3 years. Historically a lower stock market sends investors into the bond market and lowers yields, it does not seem to be working. Foreign investors especially China can sell their large holdings and drive interest rates up, and that may be what is happening.

While Trump's analysis of the tariffs and trade barriers is correct, the cure may be much more difficult if attempted with the whole world at one time. Negotiations with the EU, Canada and Mexico are the easy ones, China and the east may feel it is time to decouple from the U.S. completely and the time may be now.  This would put massive pressure on U.S. retailers to find enough products to service their customers. Maybe the Trump administration just wants to get the move to a multipolar economic system over as quickly as possible?

Yesterday China announced the introduction of a rival to the swift payment system, based on the Chinese currency that will be able to consummate transactions in 7 seconds and cost 98% less than the swift system. Many believe the use of the Chinese currency, yet another fiat currency, will only be temporary. It is anticipated that this system will be adopted by the BRICS group and the Gulf countries. It will be a move away from the dollar. It could capture over 40% of the world's market. Some question if the U.S. could freeze the sale of U.S. bonds in a similar fashion as was done to the Russian assets. Any such move would be the instant end of the U.S. dollar.

The next big question is what is going to replace the dollar as the world's reserve currency. The almost non stop rise in the Gold price indicates that the amassing of gold by central banks is in anticipation of a new currency, backed by gold. At this point only speculation, but much of the funding for these gold purchase has been selling of U.S. debt. 

It seems this tariff business is more than just a rebalancing of trade issues, but a potential trigger to accelerate the move to new multipolar economic and political spheres of influence, no longer dominated by the U.S. and its allies.

Trump announces new negotiations with Iran in Oman.

 TRUMP SAYS DIRECT HIGH LEVEL

WHY DID NETANYAHU COME TO WASHINGTON?

Yesterday saw a press conference with Benjamín Netanyahu and Donald Trump. It was a little anticlimactic because it did not seem to have any news except that Trump announced talks will begin In Oman with Iran and the USA. Trump also did not agree to eliminate tariffs on Israel, only stating that there would be a whole new tariff regime and that Israel received a lot of aid from the USA.

One must wonder why Netanyahu came to Washington? Maybe we will never know, but it seems that whatever was decided has not been revealed.

At least it seems no war with Iran is imminent in the next week. It is clear that both the U.S. and Iran do not want war, but it seems that some of the demands by the U.S. for some sort of total disarmament of Iran will never be acceptable. Some are saying that the U.S. will now be content on some sort of nuclear agreement without talking about long range missiles. It seems we will see some conclusion soon, one way or the other.

War with Iran, will have very serious negative consequences for the global economy, it will very likely draw more combatants into taking sides and will not have a quick decisive conclusion.The surrounding countries have all denied aid or the use of bases or air space for an attack on Iran. It has very high risk of major escalation with high losses for all who engage in such an attack.

The situation in Israel needs some kind of resolution and there seems little on the horizon. The Houthis are still launching missiles even after a billion dollar attack by the USA, depleting its limited supply of missiles. The Houthis, who it has been revealed have its own missile manufacturing ability, say they will continue until there is an end to the dying in Gaza. No one seems to know what the plan is with the IDF claiming they have only neutralized 30% of the Hamas tunnels and other defenses. That would indicate that the hope of eliminating Hamas has a long way to go. 

Is this whole affair becoming another long term game of attrition, rather than short quick military action. While the toll on Palestinians and Houthis is great it is also damaging the economy and social situation in Israel. Yet there still are no viable serious solutions being offered by anyone. 

Will eventual exhaustion by all be necessary, before there is any hope of any real solution. 

Why financial readjustment is imperative now?

 DOLLAR PRIVILEGE IS COMING TO AN END

U.S. NEEDS TO PREPARE TO LIVE WITHIN ITS MEANS

The world is in the midst of a change in the balance of the world's economic system. It is happening, and adjustments will be made whether from willful action or from catastrophic uncontrolled events.  For the United States, the unrivaled western leader, post WW2, it is going to be a painful and difficult process. 

With the rise of competing economic powers worldwide the privilege of the United States having its currency as the worlds reserve currency, is coming to an end, it is already in the process of losing that status, and it is not going to be reversed. 

At the end of WW2 the dollar was considered "As good as gold", but slowly it has been abused and diluted until it is a shadow of its former self. It has only continued because there is not at the present an alternative. The dollar not long ago was used for over 80 of global transactions, now it hovering near 50%. 

The reserve currency dollar allowed the United States to engage in a deficit spending binge that has now become 30% of the budget, it is going to collapse and it is inevitable. 

This weekend I listened to a CNN analyst who claimed the United States is the richest and most powerful economy in the world, he listed the Gross domestic product, the increase in living standards and a lot of statistics to back up his claim, except for 1, he never mentioned the debt or the now fixed annual deficits. 

Here is an interesting statistic, the total of bank deposits in the U.S., is $17.9 Trillion. The Total IRA balance is $15.2 trillion and the total 401 K balance is $9.9 Trillion. This is a total of $42. Trillion and that was before the decline of last week. The Federal debt is now $37 Trillion. That would leave a positive balance of $5 Trillion. The reality is, it would take the combined balance of all savings and pension investments to pay off this debt. For some reason no one ever considers that this country is living on debt and much of the prosperity is circular paper transactions of questionable financial instruments, not wealth producing activity.

Now that we are coming to a financial reckoning that expanding the debt is going to come to an end, a major readjustment needs to be made.  

To simplify the formula, spending needs to be reigned in and real wealth producing income needs to be increased. It will take cooperative effort from Americans to accomplish this or the alternative will be something similar that happened when the Soviet Union collapsed, pensions evaporated, government benefits of all types ended and the result was poverty and chaos that took 20 years of effort to recover.

The change and readjustment is coming, it is inevitable, and yes it will be in your lifetime, unless you are leaving very soon.

 

Overturning the global trading table. Just the beginning?

 CONSEQUENCES OF TARIFF PLAN, INCALCULABLE

WILL RESULT IN ENORMOUS CHANGES

The much anticipated onslaught of Tariff's on the world is now reality, the consequences will be enormous and far reaching. This move will be similar to Bretton-Woods, and Nixon's decoupling of the dollar from gold. We can expect massive flows of Capital, tax changes in every country and social changes, many not easily calculable. It is an indication of the Trump administration's realization that the country is in a perilous financial situation, a situation that is not sustainable, and is near coming to catastrophic conclusion.

This action will further put peril on the western economies, may further move the BRICS to their goal of a independent financial situation and be very painful in the short run. Maybe it will at least awaken more of the population of the real peril on the horizon, one that no none seems to realize.

Below is an article I wrote in 2015, "Where has all the money gone" the numbers are out of date, but if you know anything about the current deficits and debt, you will see what has happened in the last 10 years.

We constantly see reports of budget deficits, unfunded pensions, crumbling infrastructure, and weak economic growth. This has been an ongoing and escalating problem for over 40 years. Some of this has been masked by increasing debt by individuals and most local, state and federal governments. The country as a whole will have to address these problems in a serious way, either in a rational long range strategy, or with a haphazard attempt to deal with effects rather than solutions.

It is generally acknowledged that wealth is created by the combination of raw materials and labor  to create a  tangible product of greater value.

I remember reading in the early 1970,s the book, "The Post Industrial Society ". There was some debate about whether this was a viable idea. I also remember the economic debate in the late 1960's about the economic benefits of deficit spending by the Federal Government.  The supporters speculated that this would be a continuous stimulation of the economy, The detractors believed that the government needed to keep a sound money policy. I was a young person at the time but was always a believer that one of the most important duties of government is good stable money. I was not sure about a Post Industrial Economy, but had my doubts.

These ideas were pushed by many at the time and coupled with new social programs of the late 1960's and a avalanche of regulation of industry in 1970's we have now become largely a post industrial society. We have not had a balanced budget since 1969, except 4 years from 1998 to 2001, and those budget surplus's  did not take into account unfunded liabilities that are not included in the budget.  We have not had a trade surplus since 1971, except for a small surplus in 1973.                   

 

June 3, 2015
U.S. Trade in Goods and Services - Balance of Payments (BOP) Basis
Value in millions of dollars
1960 through 2014
Balance				Exports				Imports
Period	Total	Goods BOP	Services		Total	Goods BOP	Services		Total	Goods BOP	Services
1960	3,508	4,892	-1,384		25,940	19,650	6,290		22,432	14,758	7,674
1961	4,195	5,571	-1,376		26,403	20,108	6,295		22,208	14,537	7,671
1962	3,370	4,521	-1,151		27,722	20,781	6,941		24,352	16,260	8,092
1963	4,210	5,224	-1,014		29,620	22,272	7,348		25,410	17,048	8,362
1964	6,022	6,801	-779		33,341	25,501	7,840		27,319	18,700	8,619
1965	4,664	4,951	-287		35,285	26,461	8,824		30,621	21,510	9,111
1966	2,939	3,817	-878		38,926	29,310	9,616		35,987	25,493	10,494
1967	2,604	3,800	-1,196		41,333	30,666	10,667		38,729	26,866	11,863
1968	250	635	-385		45,543	33,626	11,917		45,293	32,991	12,302
1969	91	607	-516		49,220	36,414	12,806		49,129	35,807	13,322
1970	2,254	2,603	-349		56,640	42,469	14,171		54,386	39,866	14,520
1971	-1,302	-2,260	958		59,677	43,319	16,358		60,979	45,579	15,400
1972	-5,443	-6,416	973		67,222	49,381	17,841		72,665	55,797	16,868
1973	1,900	911	989		91,242	71,410	19,832		89,342	70,499	18,843
1974	-4,293	-5,505	1,212		120,897	98,306	22,591		125,190	103,811	21,379
1975	12,404	8,903	3,501		132,585	107,088	25,497		120,181	98,185	21,996
1976	-6,082	-9,483	3,401		142,716	114,745	27,971		148,798	124,228	24,570
1977	-27,246	-31,091	3,845		152,301	120,816	31,485		179,547	151,907	27,640
1978	-29,763	-33,927	4,164		178,428	142,075	36,353		208,191	176,002	32,189
1979	-24,565	-27,568	3,003		224,131	184,439	39,692		248,696	212,007	36,689
1980	-19,407	-25,500	6,093		271,834	224,250	47,584		291,241	249,750	41,491
1981	-16,172	-28,023	11,851		294,398	237,044	57,354		310,570	265,067	45,503
1982	-24,156	-36,485	12,329		275,236	211,157	64,079		299,391	247,642	51,749
1983	-57,767	-67,102	9,335		266,106	201,799	64,307		323,874	268,901	54,973
1984	-109,072	-112,492	3,420		291,094	219,926	71,168		400,166	332,418	67,748
1985	-121,880	-122,173	294		289,070	215,915	73,155		410,950	338,088	72,862
1986	-138,538	-145,081	6,543		310,033	223,344	86,689		448,572	368,425	80,147
1987	-151,684	-159,557	7,874		348,869	250,208	98,661		500,552	409,765	90,787
1988	-114,566	-126,959	12,393		431,149	320,230	110,919		545,715	447,189	98,526
1989	-93,141	-117,749	24,607		487,003	359,916	127,087		580,144	477,665	102,479
1990	-80,864	-111,037	30,173		535,233	387,401	147,832		616,097	498,438	117,659
1991	-31,135	-76,937	45,802		578,344	414,083	164,261		609,479	491,020	118,459
1992	-39,212	-96,897	57,685		616,882	439,631	177,251		656,094	536,528	119,566
1993	-70,311	-132,451	62,141		642,863	456,943	185,920		713,174	589,394	123,780
1994	-98,493	-165,831	67,338		703,254	502,859	200,395		801,747	668,690	133,057
1995	-96,384	-174,170	77,786		794,387	575,204	219,183		890,771	749,374	141,397
1996	-104,065	-191,000	86,935		851,602	612,113	239,489		955,667	803,113	152,554
1997	-108,273	-198,428	90,155		934,453	678,366	256,087		1,042,726	876,794	165,932
1998	-166,140	-248,221	82,081		933,174	670,416	262,758		1,099,314	918,637	180,677
1999	-258,617	-337,068	78,450		969,867	698,524	271,343		1,228,485	1,035,592	192,893
2000	-372,517	-446,783	74,266		1,075,321	784,940	290,381		1,447,837	1,231,722	216,115
2001	-361,511	-422,370	60,858		1,005,654	731,331	274,323		1,367,165	1,153,701	213,465
2002	-418,955	-475,245	56,290		978,706	698,036	280,670		1,397,660	1,173,281	224,379
2003	-493,890	-541,643	47,754		1,020,418	730,446	289,972		1,514,308	1,272,089	242,219
2004	-609,883	-664,766	54,882		1,161,549	823,584	337,966		1,771,433	1,488,349	283,083
2005	-714,245	-782,804	68,558		1,286,022	913,016	373,006		2,000,267	1,695,820	304,448
2006	-761,716	-837,289	75,573		1,457,642	1,040,905	416,738		2,219,358	1,878,194	341,165
2007	-705,375	-821,196	115,821		1,653,548	1,165,151	488,396		2,358,922	1,986,347	372,575
2008	-708,726	-832,492	123,765		1,841,612	1,308,795	532,817		2,550,339	2,141,287	409,052
2009	-383,774	-509,694	125,920		1,583,053	1,070,331	512,722		1,966,827	1,580,025	386,801
2010	-494,658	-648,678	154,020		1,853,606	1,290,273	563,333		2,348,263	1,938,950	409,313
2011	-548,625	-740,646	192,020		2,127,021	1,499,240	627,781		2,675,646	2,239,886	435,761
2012	-536,773	-741,171	204,398		2,218,989	1,562,578	656,411		2,755,762	2,303,749	452,013
2013	-478,394	-702,587	224,193		2,279,937	1,592,043	687,894		2,758,331	2,294,630	463,700
2014	-508,324	-741,462	233,138		2,343,205	1,632,639	710,565		2,851,529	2,374,101	477,428
U.S. Census Bureau, Economic Indicator Division
NOTE: (1) Data presented on a Balance of Payment (BOP) basis. Information on data sources and methodology
are available at http://www.census.gov/foreign-trade/guide/sec2.html#bop.

The accumulated trade deficits from 1971 to 2014 total, $10,096,538,000,000, over $10 Trillion .
This is over 50% of our national debt. This is  money that was not spent or invested within the country.

When the debates in the 1980's and 90's concerning NAFTA and GAAT were ongoing, I, along with many others, predicted that if American labor is to compete with third world labor on an equal basis, the standard of living of Americans must go down. This decline has been happening for many years, many have made up for this by borrowing more, home equity loans etc. Borrowing will no longer bridge the gap.

Many politicians and international corporations both Democratic and Republican preached unlimited free trade, and promised we would make up for our losses by becoming a Hi-Tech exporting country. Look at the numbers above and you decide.

While the private sector has struggled to adapt, the public sector has mostly been insulated from the realities of the real economy. With strong political power it has been decades of special deals for those that benefit from connections in Government. Whether it is entrenched bureaucracies' or International corporations with political connections.  This has been all at the expense of the lower and middle class Americans.

As for the Budget Deficits. They have accumulated since 1969 to $19 Trillion .  The estimated total debt is near to $100 Trillion,  this is the money owed to unfunded mandates, Social Security money that was spent out of the surpluses in Social security since the 1990's. Money from other supposed safe keeping funds that has been spent, by both Democratic and Republican administrations.  Anyone with knowledge of  Economics  know there is only hyper-inflation or default on the horizon. If the Federal Government was a pension fund or a Corporation,  they would all be in jail.

While this time is probably the last hope of correcting these entrenched problems, It would need the cooperation of all the people and government, It does not look likely. We would have to change regulations and Government policies to make the USA a enticing place to do business, The kind of business that produces wealth, real tangible goods.  We have become adverse to anything  that produces dust, smoke or makes your hands dirty.  Look at the cities, like Detroit, once the  wealthiest city in America, and many others, there are no jobs of substance.

When I was a youth, I remember the textile plants from Northampton to Easton, that employed many thousands, and paid well,  as well as the Steel and foundry business's that were a large part of the Pennsylvania economy. I lived in Emmaus, and within walking distance of everyone were several foundries, Rodale mfg., Lehigh Safety shoe' EMF and others. My father worked for Western Electric for 25 years, None of those business exist today. There is too much risk and too little hope of success for manufacturing in America.

If you had a National balance sheet, with income and expenses. The income side is Manufacturing, mining, and producing machines etc. to mass produce products, Farms, Auto Co., Caterpillar, etc. The expense side is everything that is part of the Government. The Government at all levels is not a creator of wealth, a necessary expense, but an expense. Service jobs, lawyers, accountants etc. are all expense side. Government attempts to redistribute wealth, wealth being created today, and even past wealth.

We have been sold a false Philosophy,  and we all believed in it to some extent. There are powerful interests who want things to continue as they have. Who hope they will just get to  retirement before the reckoning comes.  It will be interesting to see how it all plays out.

Originally published 10/21/2015