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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Notes:
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.
THIS IS HOW YOU FIX CONGRESS!!!!!
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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