The Big Picture: The U.S. is in worse shape than Europe – $222 trillion in unfunded liabilities.

“… [The] U.S. is in far more trouble than Europe,” according to Jack Mintz, School of Public Policy, University of Calgary.

“This was brought home by calculations presented by Larry Kotlikoff of Boston University at a lecture held at the International Institute of Public Finance, the biggest gathering of public-finance experts in the world. Greece may be bankrupt, but the U.S. looks like a giant Ponzi scheme.

Kotlikoff’s calculations show that U.S. unfunded liabilities total US $222-trillion, the highest of all major OECD countries (12% of the time value of U.S. GDP) once accounting for monetary public debt, Social Security deficits and public-health-care unfunded liabilities. One can quibble with some of the calculations, but no one can doubt that the U.S. is in serious fiscal trouble, more so than any other developed economy.”

Again – the U.S. us running annual GAAP deficits averaging $5 trillion per year over the past 4 years. At $5 trillion per year, the government could take ALL of the income earned by every American, plus ALL of the corporate profits, and it would still be in deficit.

America’s debt is “beyond containment.”  The government can’t raise taxes enough, they can’t cut spending anywhere close to what is needed – to deal with the unfunded liabilities.

America needs strike out in a new direction – one that eliminates debt at the ‘ground level’ and restores economic liberty for American families.

America needs a strategic plan that targets direct liquidity benefits and debt relief for American families, instead of continuing to target financial institutions for preferential liquidity transfers. 

Deliver liquidity to American families – and let it ‘ripple up’ to the financial institutions…

The Leviticus 25 Plan.

Foreclosure Starts Increase for Third Straight Month in July, Bank Repossessions Continue Decline. -Realtytrac, August 6, 2012

 Big Government ‘Central Planning’ is not solving the financial crisis in America.

Realty Trac – August 6, 2012 Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 191,925 U.S. properties in July, a decrease of 3 percent from the previous month and a decrease of 10 percent from July 2011. The report also shows one in every 686 U.S. housing units with a foreclosure filing during the month.“U.S. foreclosure activity continued its uneven descent in July as the overall numbers declined on an annual basis for the 22nd straight month, but properties starting the foreclosure process increased on an annual basis for the third straight month,” said Daren Blomquist, Vice President of RealtyTrac.

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Again… “properties starting the floreclosure process increased on an annual basis for the third straight month.”

July 2012:  “…one in every 686 U.S. housing units” is under a foreclosure filing.

The U.S. Government has thrown trillions of dollars ‘in’ to stem the tide of economic contraction.  And hundred of thousands of Americans are still heading into the foreclosure process on their homes.

It is time for a new approach:  The Leviticus 25 Plan

Global financial system remains ‘fragile’ – big storm coming…

Der Spiegel (8-13-12) headline: “Investors Prepare for Euro Collapse.”

“Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar’s structure isn’t in doubt.”

The global financial system remains fragile – after 4 years and trillions of dollars / euros / yen funneled to the ‘system.’  These massive liquidity infusions have not been effectively ‘targeted’ to relieve debt pressures.  All they have done is quietly debase currencies.  A new approach is needed…

Greg Hunter, USA Watchdog: “There is too much debt and not enough growth or taxes to service it. It’s the same problem almost everywhere on the planet. Governments are just printing money to try and make the problem go away. Egon von Greyerz, founder of Matterhorn Asset Management ($5 billion in assets), said this week, ‘This is why money printing is guaranteed in Europe, the US, UK and Japan. History teaches us that a nation which runs large deficits and increasing debts could never create wealth in the long-run. Wealth has never been created by printing money, and this time, like it has before, it will lead to a financial crash. This time the financial crash will be of a worldwide magnitude.’”

“Nigel Farage, outspoken Member European Parliament, also fears another approaching calamity. Just last week, he said, ‘It isn’t the euro that scares me anymore. What scares me is the sheer level of indebtedness, and the fact that so many of our banks in the Western world are just in such serious trouble that we could face a situation where even if governments wanted to bail them out, the problem may become bigger than them. So I do not discount, at some point, a really dramatic banking collapse.’”

“The next collapse will make the 2008 meltdown look like a day at the beach. According to Professor William Black, it looks like a mathematical certainty. Black is a former top bank regulator who helped unwind the Savings and Loan scandal. He is also a professor of both law and economics and studies why we have “reoccurring and intensifying financial crises.” In an interview this week, he told me, “. . . each crisis is becoming bigger by an order of magnitude. The savings and loan debacle was $150 billion roughly. The Enron era frauds and collapse of the high tech boom was six to seven trillion dollars. Just the household sector (in the 2007-2008 meltdown) lost $11 trillion dollars.”… If you add in $700 billion of TARP, more than $800 billion in stimulus, zero percent interest rates through 2014, FDIC deposit insurance for investment banks, the implicit guarantee of the “too big to fail” banks by taxpayers and the $16.1 trillion pumped out by the Fed to bailout the world–you have one colossal crisis. The next calamity will get bigger than the last by an “order of magnitude” because bankers, according to Professor Black, “can commit these frauds with impunity.” (Black is referring to liar loans, security fraud of bundling those loans, ratings fraud, and the forgery and perjury of foreclosure fraud and many others.)”

“Professor Black says, “We are rolling the dice every day to have the disaster.” In short, the next one will be the big one, and it can happen at any time without warning.”

Full article – USA Watchdoghttp://usawatchdog.com/prepare-for-us-and-euro-financial-collapse-the-next-one-will-be-the-big-one/

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It is time for a new solution…

The Leviticus 25 Plan, with direct credit extensions to citizens, is critical to stabilizing the system, from the ground up.

 

“…we are still in the throes of a debt deleveraging cycle that first engulfed the housing and consumer sectors and is now attacking the government sector in country after country.” -David Rosenberg, Gluskin Sheff

More from Rosenberg: “It is not only Europe. China and the U.S.A. too.  There is still far too much debt at all levels of society relative to the world’s capacity to service it.  This is a critical reason why government and central bank policies aimed at fighting traditional recessions in the past have so far been ineffective and now we have monetary authorities dipping into the toolbox of unconventional balance sheet expansions and contortions.”

Europe for some reason continues to believe that a debt crisis can be fought with more debt. Maybe because they think this strategy has worked in the United States. But it hasn’t and the U.S. is either recession-bound or at best left with a listless economy, and also will likely soon face its own existential moment from a fiscal crisis perspective if it doesn’t get its act together. If left unchecked, the day will come when the entire revenue base will be absorbed by interest expense, defense, health care and social security.

The numbers vary by the hour and the data source. but it looks like Q2 operating EPS of S&P 500 companies is on track for a 0.5% YoY dip — by far the weakest since the recovery began three years ago (and well below consensus views of +3% a month ago) . The big problem !s revenues which are coming in just 1.2% ahead of year-ago levels and only 43% are beating their sales targets the lowest since the first quarter of 2009 (only the fourth time in the past 10 years that the beat-rate was under 50%).

The other problem is guidance. The WSJ cites research that finds that 40 companies have already warned about Q3 versus only eight who have raised guidance. We have not seen a gap like this since the onset of the tech wreck in the second quarter of 2001. The bottom-up consensus is now looking for just +3.3% for YoY EPS growth for Q3 — last October, the analysts collectively were calling for 14.5% for the quarter….

We have governments battling a debt deleveraging cycle of epic proportions, and by definition, these phases involve debt paydowns, defaults, and rising savings rates — a highly deflationary brew…. This is no time for denial.

(Source: http://www.zerohedge.com/news/david-rosenberg-headless-chickens-topless-americans-and-bottomless-europeans)

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Again – note the obseration by Rosenberg:  “There is still far too much debt at all levels of society relative to the world’s capacity to service it. This is a critical reason why government and central bank policies aimed at fighting traditional recessions in the past have so far been ineffective…”

It is time to deliver credit extensions direct from the Federal Reserve to American citizens – with The Leviticus 25 Plan.

The Leviticus 25 Plan will effect massive debt reductions at the family level.  It will re-ignite the economy, improve productivity, and reduce the scope of government.  It will set us on course to restore individual freedom and liberty for Americans.