America is going on 4 to 5 years of economic struggle depending on when you start counting. Individuals in their 30s and older can vividly recall a time where this country had a strong economy and students graduating from colleges, for the most part, had a solid paying job waiting for them. They can recall a time when you got laid off from your job and it actually took less than 12 weeks to replace it. Older individuals can even go back as far to remember when one blue collar job could cover the expenses of a household. A mechanic working 40 hours a week could purchase a home, have a wife and two kids, and go on a vacation once a year.
Growing up now in the current conditions is much different than it was years ago. The worst part about it is that young adults don’t know anything else but this. This economy has been like this now and getting worse for an extended period of time that is actually normalizing a sub-standard expectation for their lives. Young adults are staying at home longer than they used to, having to wait to get married longer to save and wait for an opportune moment, and having kids later in life all because of a change in the economic condition of the country. Young adults have a right to be upset and angry because the system in place is being driven straight into a ditch by the leaders and power holders in the nation. This situation can be changed but there are many interested parties that are going to have to selflessly step aside and allow for real change to take place.
Gold is being used as a medium of liquidity for central banks to stabilize the fiat dollars circulating throughout the world. Central banks actually increased the amount of gold they lent for the first time in a decade in 2011. This is a way to assist commercial banks raise U.S. dollars. Although central banks hold one sixth of all the gold ever mined in their reserves, their activities in the bullion market are opaque, with not a single institution revealing its day-to-day operations. In addition to holding gold for their reserves, some central banks also trade the metal, lending it on the open market in order to obtain a yield. Gold is still the place to hold your money and not U.S. dollars. If central banks are using it as a way to attract and manipulate the market, the power is in the metal and not the paper.
More downgrades to come
S.& P. warned in December that it might downgrade many of the 17 nations that share the euro, largely because it said European politicians were moving too slowly to strengthen the monetary union and because the euro zone’s problems were propelling Europe toward its second recession in three years.
The World Bank cut its forecast for global economic growth this year to 2.5%, from 3.6%. The bank revised its estimate for the U.S. economy to 2.2% growth, from 2.9%. The eurozone forecast is for 0.3% contraction, compared with the 1.8% expansion previously predicted. It always seems like these forecasters just never get it right. It’s always in the downward revision that changes are made because of over optimistic projections.
Bad taste for euro in mouths of Europeans
CNBC has some interesting figures on a recent poll in Italy: Majority of Italians No Longer Trust the Euro
- 65% of those polled thought the introduction of the euro has been more damaging than beneficial for the Italian economy
- 55% percent of Italians have lost confidence in the euro
- Confidence in the European Union stood at 51%, the lowest level in many years
- 31% said they would prefer a return to the lira
Standard & Poor’s 500 companies will probably have to put $90 billion into pension plans this year to meet shortfalls, a report from Credit Suisse accounting analyst David Zion. In 2011, companies had to pay $52 billion to fund pension plans. CrushTheStreet.com believes this will be a drain on the companies financial obligations and abilities to grow. This along with sentiment will continue to drag down the big players on Wall Street.
Buyout IRS Agents
IRS agents, just like we’ve seen in other areas of government and other union bound industries, are actually being offered compensation to retire at an early age. This of course is the better alternative to keeping them working for additional years making over priced salaries and accumulating unrealistic tax funded benefits. Instead of just mandatory pay cuts and or layoffs, the taxpayers are forced to offer IRS agents the option to an early ticket to the country club. The buyout program was offered to IRS employees on Thursday, according to Federal News Radio. It comes after another buyout offer that went out to IRS employees last November, in which they were also promised $25,000 for retiring. With all the money that they steal every year from taxpayers, they still can’t manage to keep their financial house in order.
Shipping Good Jobs Elsewhere
The United States lost more than a quarter of its high-tech manufacturing jobs during the past decade as U.S.-based multinational companies placed a growing percentage of their research-and-development operations overseas, the National Science Board reported Tuesday. 28% of high tech manufacturing jobs left the U.S. in a decade. Unfortunately the recovery we are seeing isn’t in the high paying sector, but rather in retail and fast food. America will need these jobs back in the country for it to maintain the standard of living that so many have become accustomed to living.
Citigroups Reported Earnings
Citigroup missed it’s earnings estimates for the 4th quarter in 2011. Citigroup released 8.2 billion in “loan loss reserves” to fictitiously boost their earnings to paint their mess in a better light. Along with their 1.8 billion in paper gains, they managed to report a total of 11.2 billion in earnings. Sounds like Citigroup is taking some lessons from our Federal Government. When seeing companies fudge numbers like this, it makes wanting to own them very displeasing. This is not considering how they are still sitting on many mortgages still to be defaulted on.
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