What will happen in 2012?

Richard Salbato January 3, 2012

What do you have to look forward to or to worry about in this New Year?  Of course, this is an election year, so we have to talk about that and make predictions. Everyone who pays attention to the news will worry about the Economics of Europe and wonders about that. We, who do not have our head in the sand, are watching the Syrian civil war and the elections in Egypt. Russian and Chinese elections will happen. Important elections will take place in Europe.  What we worry about the most is the economy of our own county and our debt. I will talk about Iran and what that means this year. Something few are watching are the latest inventions that will effect the economy of America this or next year.

Before giving my opinions on all these things I want those who care to know that I did a small pole among my extended family, friends and close neighbors and found that 90% of them know nothing about what is going on because they never watch the news and do not want to know about the future of the world, their nation or even themselves. They think if they knew anything they would worry and they only care about today. They do not plan for the future and do not worry about it. The sad thing is that half of these people vote but the good thing is that half do not vote.

Kick the can

What we will find in history is that 2012 will be the year that everyone throughout the world will try to stall off their problems as long as possible because of elections coming up or just the hope that some miracle will save them.  It is because of elections that the Democrats would not pass a budget for the last three years or more. If you pass a budget the people will find out how you are spending their money. They pass increased trillion dollar debts without any spending cuts because their greatest election monopoly are government workers and government unions. This is going on in Europe also and will continue in order to get one more year out of the Euro when in fact they know that at least Greece and Hungary must go bankrupt.  At least these two countries will go bankrupt but it may be three or four other European nations as well. These will leave the Euro but because they can kick the can down the road it will not happen until 2013. Syria will be overturned and the government knows it but they will fight and fight as long as they can hoping something will happen elsewhere in the world that will save them. Throughout Europe and many Asian nations their stock markets have dropped an average of 36% last year, all except Ireland. Ireland is the only nation that cut their government budgets enough to save the nation and they are suffering the results of that with high unemployment for now. In the long run these Irish problems will not last long and they will become the strongest of the European nations because they took the pain now and did kick the can down the road.

Even without solving the problem of too much government, these other nations have huge unemployment numbers from 20% to 30% and rising. Only Germany has a reasonable unemployment number. This is understandable because Germans work and the others do not. Greeks retire at 50, work 35 hours a week and have five weeks paid vacation a year.

Europe will have a depression this year and a Recession in 2013.

2012 Elections

Most people believe that the Republicans will win enough Senate seats to have a majority and will keep a majority in the House. I agree with this. So what about the Presidential race?  These are my predictions. In spite of all this sound and furry in the Republican primaries, when they reach the Republican Convention no one will have enough majority to win on the first ballot.

Let me explain this to those who do not understand the system. In order to be the Republican nomination to run against Obama, one person has to win enough guaranteed votes at the convention to win in the first ballot. An example is that if someone wins Florida in the primary all the Electoral College votes from Florida have to vote for that person on the first ballot but do not have to vote for him on the second or third ballot if that happens. For someone to win on the first ballot he or she must win enough primaries to get 51% of the votes on that first ballet.  After that, anything goes.

Someone can be elected on the second ballot who is not even running now. However, if it is someone who is running now, I will give you who I am going to vote for. I am sick of platitudes like, “I am the most conservative – This is about freedom – look at my background – I have done this or that.” I am not interested in any of these things, I am interested in what they are going to do if elected and I want to know this in detail. Only one person has said what he will do on the day he takes the oath of President, and then on the first week and then the first month, and then the first year.  He has laid this out in detail and I have read it carefully and it is the only plan I like. This man is Newt Gingrich.

Many Republicans say that anyone can beat Obama because he is the worst president in history and he has increased the debt in three years by six and one half trillion dollars, whereas all the presidents in the history of America put together increased the debt less than that. This debt is now fifteen trillion and will be twenty trillion in five more years. It is laughable when I hear of people saying they want to balance the budget.  All that does is stop the yearly increase but does not get rid of the existing twenty trillion which will bankrupt America in three to five years. This election should be about math, but it will be about selfishness.

For Republicans it should be math.  If we do not cut at least two trillion a year for the next four years we will run out of money to run the government.

For Obama it is about math also. His math works like this: 38% of all America families either work for the government or receive a check from the government. He will get 90% of these voters. He will get the 6% vote of homosexuals and pro-homosexuals. He will get the 4% radical environmentalists. Now he only needs to pick up 3% more to win election. He will do this by having the news media and heavy donations from unions sell fear of what Republicans might do. I predict he will win and that will be the end of America as we know it.

Europe’s Debt

European Debt problems are six times greater than ours were in 2008 when we had a crash. Debt is always figured as a percentage of Gross Domestic Product (how much you make) and your ability to pay the debt. If there is a crash in Europe it will affect the world because if you put all the nations of Europe it is about the size of America in GDP but their banks are in poorer shape than ours were in 2008. They may not be able to come out of a massive depression. We can no longer help them as we did with the Marshal Plan.

Elections in Egypt, Russia, China

The elections in Egypt will just bring about more street riots because the army does not want to give up power and it will not be a true democracy as the people want. Russia will continue to be more and more corrupt and this will create more marches in the streets because the people see it and they want a true democracy. China will change government leaders this year but that is not done by elections but by just a vote of the leaders and we have no idea if that will be good or bad.  Nonetheless China has huge problems about the erupt in controlling their people. This is for the same reason of all the other civil wars we have had this last year, the cell phone. Because of the cell phone world wide news can no longer be controlled by governments. Freedom of the press is hear to stay.

War with Iran

No one likes war and if you are a Ron Paul supporter or at least a Libertarian you will not like what I am going to say. War with Iran is going to happen no matter if we want it or not. Iran is sending two large cargo planes of war materials to Syria per day to keep them armed against their people. Iran is arming Afghanistan daily. Iran is arming its friends in Iraq on a daily basis. And Iran is months away from having nuclear bombs, which they can give to terrorists.  These could hit our ports on cargo ships.

Israel will not let this happen and will bomb Iran just before they get the bomb. The general logic in America is that Obama will not help Israel.  I do not agree with this.

Obama is a lover of Franklin D. Roosevelt. He know that  Roosevelt was re-elected four times simply because Americas will never change Presidents during and active war. If Obama does not think he can gain that final 3% to win the election, he will go after the Jewish vote which right now he has lost. He can do this by helping Israel attack Iran months before the election. This will anger the left but they have no other place to go anyway.  In another article I will show that if done right this war will not last over six days. The real crime of this is that Obama will win the election because of it.

The Next Great Inventions

What I love about Steve Jobs is that he did not give people what they wanted. He told people what they ought to want because it would change their lives for the better. He knew what would be good for people and the nation even when no one else realized it until they experienced it. Apple will continue this with the face to face phone systems that they are now improving on. In time we can be face to face with our customers without leaving our office, or face to face with our boss without leaving our home, or face to face with our teacher without going to school. This will get better and better until it changes how we do everything, even government.

However, the greatest money making invention and job creation has to do with energy.  The new and constantly improving fracking method of drilling and pulling oil out of the ground is not only going to save our economy but in time it will close down all the middle east and cut off the money to the terrorists. The second great energy invention is almost as good. A small company has  just invented a system that will pull out of the water 100% of any oil spill and just as fast as it leaks. This will completely eliminate the threat of oil spills from drilling or shipping or even pipe leaks.

We also now have small Nuclear Power plants the size of a trailer and another the size of small car. These will help save our electrical distribution system which is a mess and very vulnerable to terrorists. These will also be great exports around the world.

2013 is the great worry

Because everyone will kick the can down the road this year, the great threat to the world will be next year.  In 3013 sun spots will effect a great deal of the worlds electrical systems, nations will disappear, more civil wars will break out, riots will invade Europe and governments will close down.

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1. Warren Buffett’s Debt Solutions

Warren Buffett..."I could end the deficit in 5 minutes," he told CNBC. "

Warren Buffett, in a recent interview with CNBC, offers one of the best quotes about the debt ceiling:

"I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election

The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971.before computers, e-mail, cell phones, etc.

Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land, all because of public pressure.

Warren Buffet is asking each addressee to forward this email to a minimum of twenty people on their address list; in turn ask each of those to do likewise.

In three days, most people in The United States of America will have the message. This is one idea that really should be passed around.

*Congressional Reform Act of 2011*

1. No Tenure / No Pension.

A Congressman collects a salary while in office and receives no pay when they are out of office.

2. Congress (past, present & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social
Security system, and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all Americans do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the American people.

7. All contracts with past and present Congressmen are void effective 1/1/12. The American people did not make this contract with Congressmen.  Congressmen made all these contracts for themselves.
Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.  If each person contacts a minimum of
twenty people then it will only take three days for most people (in the U.S.) to receive the message. Maybe it is time.


2. Past National Bankruptcies

10 Governments That Went Bankrupt

National bankruptcy is a popular discussion topic of late. In light of the global financial meltdown and the runaway deficit spending of the United States in particular, observers are predicting that national bankruptcy is entirely possible. Harvard MBA John T. Reed, for instance, opines that our children and grandchildren will likely “live in a world where America’s credit cards have been cut up because our huge debt was renounced.” Those who insist this could not happen would do well to look at history, and all of the national governments that have gone bankrupt over the years. Today we’ll take a look back at 10 of the best-known examples.

Argentina 2001


National bankruptcy skeptics like to claim that while countries went bankrupt hundreds of years ago, such catastrophe is out of the question in our modern, inter-dependent world. However, as Spiegel Online insists, national bankruptcy is not “just some theoretical construct.” In their article “The Ghost of Argentina, Spiegel tells the story of Argentina’s bankruptcy in 2001. There was a run on banks following a collapse of the country’s national currency. So desperate and panicked were Argentina’s citizens that “many spent nights sleeping in front of the automated teller machines.” Eventually, the situation became so chaotic that President Fernando de la Rúa fled an enraged mob by helicopter. Despite all the protests and bank runs, the nation simply could not repay its $145 billion in foreign debts.

Iceland 2008

An even more recent national bankruptcy than Argentina’s 2001 fall from grace was Iceland, which became a casualty of the global financial crisis in 2008. According to BusinessWeek, the cause was a rapidly devalued currency: “the country cannot pay back its external debts, and the Icelandic currency, the krona, has become essentially valueless in the rest of the world.” The upshot of a worthless krona was that Iceland could no longer pay for imports, on which the country is heavily dependent. Worst of all, BusinessWeek notes, is that “with Iceland sitting outside the major currency trading blocs, there may be no one with the incentive or ability to save it.” Despite going hat in hand to the International Monetary Fund and Russia, the UK reportedly threatened to sue Iceland over unreturned money.

Germany 1920 1945

Germany has the dubious distinction of having gone bankrupt not once, but twice in recent memory. The first bankruptcy came in the 1920s as a result of losing World War I. The “crushing reparations payments” (reportedly three times the value of all the property in the country) imposed by the Treaty of Versailles reduced Germany to a state of being “completely, hopelessly broke”, according to WebOfDebt.com. Unfortunately, this led to severe hyperinflation of German currency, which eventually got so out of control that “a wheelbarrow full of 100 billion-mark banknotes could not buy a loaf of bread.” The end of World War II produced another bankruptcy in 1945, as most of Germany’s industrial capacity and factories were destroyed by the allies.

Great Britain 1945

Germany was not the only country to go bankrupt after World War II. Following suit, Great Britain demonstrated that even winning a war is accompanied by significant losses. Indeed, a New York Times article reported in 2006 that the UK was only then making its final payment on $4.34 billion in loans extended by the U.S. all the way back in 1945. To put that sum in perspective, $4.34 billion in 1945 is roughly equivalent to $140 billion today, a sum that was “double the size of the British economy at the time.” So ravaged was the British economy following the war that almost all national resources were dedicated to paying war debts for five full years after its completion.

Russia 1998

Few developed nations have had economic histories as complicated and challenging as Russia’s. Never was this more apparent than in 1998, when the former communist country suffered a financial crisis unlike any it had experienced prior. This time period was also known as the “ruble crisis” because of the ruble’s central role to Russia’s struggles. Following months of downward pressure on the ruble by currency speculators, Wikipedia states that “Russian stock, bond, and currency markets collapsed as a result of investor fears that the government would devalue the ruble, default on domestic debt, or both” in August 1998. Inflation soared past 80% before the year was out, with many banks closing down and the ruble losing over two thirds of its value from August to September alone. Nor has the crisis been forgotten, with the UK’s Telegraph wondering in November 2008 “will Russia go bankrupt again?”

Pakistan 2008

Russia isn’t the only country that has been dragged into default by a decline in the value of rupees. In 2008, BusinessWeek reported that Pakistan “faced default on its huge foreign debt” amidst the beginnings of the financial crisis late that year. Remarking on the effects of looming default on the country at large, BusinessWeek states that “electricity goes out for as much as 12 hours a day, the gasoline lines get longer, and depositors rush to banks to pull out their meager savings.” Much of this trouble owes to Pakistan’s foreign exchange reserves dropping to $4.3 billion (a 75% free fall over the year prior) primarily because of soaring oil prices, which comprise roughly a third of Pakistani imports. Topping things off, the rupee lost about 25% of its value in 2008 alone.

Zimbabwe 2008

Zimbabwe offers perhaps the most tragic story of national bankruptcy. In 2008, CNN reported that the embattled African country was “in the midst of an outbreak of cholera, food shortages, hyper inflation, and renewed calls for President Robert Mgabe to step down.” Unable to repay its $4.5 billion debt and struggling with an astounding 80% unemployment, Zimbabwe’s plight eventually worsened to such an appalling degree that one informant told CNN “most areas hadn’t had water for at least a year.” Yale University’s Center For The Study of Globalization reached similar conclusions back in 2005, dubbing Zimbabwe “the world’s fastest shrinking economy.”

Ecuador 2008

Ecuador is another nation unfortunate enough to have gone bankrupt twice in its history. In fact, according to Bloomberg, Ecuador’s announcement that it would default on $30 billion in interest payments was the second such announcement in this decade alone. Addressing the world with defiance and self-righteousness, Ecuadorean President Rafael Correa flatly stated “I have given the order that interest payments not be made. The country is in default.” Arturo Porzecanski, an international finance professor at American University in Washington, spoke for much of the international community (and certainly Ecuador’s creditors) by calling the country a “serial defaulter.” “A lot of other countries have had one or two defaults”, Porzecanski explains, “but Ecuador tops them all.” All told, the South American country has gone bankrupt six times since its 1830 separation from Gran Colombia.

France Eight times

In an article entitled Can European Countries Really Go Bankrupt?, the San Francisco Sentinel uses pre-twentieth century France as an object lesson. As the Sentinel reminds us, “France became insolvent eight times” between 1500 and 1800. While it is tempting to dismiss such long-ago events as irrelevant to modern considerations, we should remember France’s place in the world during those times. Because the United States either did not exist or was still forming from 1500-1800, France (along with England) was one of the world’s foremost superpowers.

Spain 1557, 1560, 1575 and 1596

Defaulted on its financial obligations seven times during the 19th century alone. In fact, Spain was actually the first sovereign nation in history to declare bankruptcy, doing so as far back as 1557. It should be noted that Spanish King Phillip II “had to declare four state bankruptcies” during his time on the throne: 1557, 1560, 1575 and 1596.

End of Euro

Earlier this month, Swiss Finance Minister Eveline Widmer-Schlumpf told parliament that the Swiss government was preparing concrete measures to defend Switzerland against a collapse of the euro.

Meanwhile, Handelsblatt Germany’s equivalent of the Wall Street Journal — advised its readers to prepare their finances for the day Germany reverts back to the Deutschmark.

And even the French daily Le Monde — a staunch supporter of the euro — recently ran a shocking headline that declared, "The Explosion of the Eurozone Is Now Possible."

So, clearly, even major European politicians and mainstream media sources have no problem warning their citizens about an imminent collapse and what to do about it.

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