Prepare to be afraid.
Last week I was amused to see a debate on CNBC about whether we were in a depression or not. It is especially amusing now that we have been "officially" informed that we are in a recession.
What people should know, however, is that what happened to GrannyDoc is not remotely isolated. Reuters dropped the bombshell today:
(Reuters) - The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.
The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.
"In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent."
Merry Christmas
It looks like the CNBC panelists arguing that we are in a depression just got a boost. This is exactly what we saw in the Great Depression - banks cutting risk, raising interest rates, and contracting the money supply.
For tens of millions of Americans, their credit card is their lifeline. And it's about to be pulled right out from under their feet.
In fact, credit cards have been covering the real state of our economy for many years. Now, combine this impending catastrophe with this recent report from CBS News:
(CBS) There's a new wave of foreclosure sweeping across the country, and the people who are getting swept up are not greedy investors, or people who got in over their heads with bad loans, reports CBS News correspondent Ben Tracy. Rather, the crisis is hitting home for those who never expected to be in trouble until the slumping economy put them out of work.
"The foreclosure crisis began mostly as a problem for lower income households," says Mark Zandi of Moody's. "It is now a problem for all households: low, middle income and even higher income households."
More than 2 million prime mortgages, traditional loans for people with good credit, are now delinquent. That's 624,000 more than this time last year, according to the mortgage bankers foundation, Tracy reports.
"We didn't necessarily expect the distress levels that we are seeing at this point," says economist Mark Fleming.
What people should understand about GrannyDoc, and millions of Americans like her with perfect credit and a long record of employment, is that they are now an increased risk. Banks are increasingly reassessing the American consumer, and concluding that no one is a safe bet anymore. So they're adjusting their models to accommodate.
The reason it was so hard for the CNBC people to get a fix on whether we are in a depression or not is because it is not precisely and universally defined. But if it walks like a duck...
The real tragedy of all this is that it doesn't have to happen. Like so many boiling frogs, we are oblivious to how simple the remedy really is.
Many civilizations throughout history have been poor - poor in food, energy, water, minerals. The US is not one of them. We have everything we need to put all of our people to work tomorrow building the greatest civilization the world has ever known.
We have the greatest supply of natural resources of any country on the planet. We have the greatest storehouse of knowledge. Even with the very real energy shortage, we could still use what is left to convert to renewable energy in record time.
And yet all we hear is how we are out of money. Does anyone even comprehend how ridiculous this is?
How did we allow ourselves to be brought to our knees by parasites who produce nothing, and a monetary/banking policy that has sucked all of the money away from the real producers?
Corruption. Plain and simple.
Most people go their entire lives without even questioning where money comes from. It's just always been. But currency is supposed to be a symbol, a tool. Not a shackle. We, as a society, have grown so accustomed to never asking questions about where the money comes from, that we don't see the most obvious thing in the world - we have become slaves to bankers who make more money off the money itself, than the goods or services the money is supposed to represent.
Money is supposed to represent real wealth - so you don't have to carry around your chickens. It should never be the sole source of wealth. Anyone who is making money solely off of money is a parasite.
What kind of system penalizes the producers of real wealth, things that have real value, and rewards the parasites? A system designed by parasites.
This is the greatest opportunity in almost a century to fix this absurd monetary system, and rebuild our country. But it won't happen because the parasites also control our political system. So the people are being taxed to death to pay for the parasites ponzi scheme.
Abraham Lincoln told the bankers to piss off and began printing up greenbacks - pure fiat currency backed only by the US government. It was an economic boom and it won him the Civil War. It's a long story. As is the one about how bankers schemed for a hundred years to put American on the central banking system of Britain.
But just remember this: Next time someone tells you we can't afford universal healthcare, ask them what exactly we are short of, Doctors? Medical equipment? Sick people?
Or when someone says, we can't afford to rebuild our infrastructure, ask them what can't we afford. We've got plenty of workers, standing idly by. We've got plenty of rock and steel. We've even got plenty of energy.
No, the only thing we're short of is a symbol.
FOr more on the money scam, and the true nature of money and our monetary system, watch this little video.