NIA Projects Multi-Trillion Dollar U.S. Budget Deficits

NIA Projects Multi-Trillion Dollar U.S. Budget Deficits

Earlier this week, President Obama released the White House's budget proposal for fiscal year 2012 along with their budget projections for the following 10 years. The White House projects a record budget deficit in 2011 of $1.645 trillion, but for the deficit to be reduced to $1.101 trillion in 2012, $768 billion in 2013, $645 billion in 2014, and a low of $607 billion in 2015, before rising back up to $774 billion in 2021. We give Obama credit for being honest and admitting that he has no intention of making any attempt to balance the budget. However, NIA believes the White House is making ridiculous assumptions and deceiving the public about future budget deficits.

In our opinion, the White House will be right about the U.S. having a record budget deficit in 2011. Unfortunately, we believe this is the only thing they will be right about. Any proposed spending cuts coming out of Washington today are so small that they are a waste of time even discussing. The truth is, the total cost of Social Security, Medicare, Medicaid, and other mandatory programs alone will be $2.2 trillion in 2011. Then when you add in the projected $205 billion in interest payments on our national debt in 2011, we will have a budget deficit of $235 billion right there without including any of the government's $891 billion in security and $496 billion in non-security discretionary spending.

Obama's proposed freeze on non-security discretionary spending will only save $406 billion over the next 10 years, which is absolutely nothing. If Obama didn't just freeze discretionary spending, but he cut all discretionary spending down to zero, we would still have a budget deficit. Nobody in the mainstream media is educating the American public about just how dire our country's fiscal situation is. We get called fear-mongers for preparing Americans for hyperinflation, but we speak the truth while the mainstream media ignores our country's financial problems. We wouldn't have to spend close to a million dollars per year producing documentaries and writing articles about the hyperinflationary crisis ahead if the mainstream media did their job.

NIA believes that after our record budget deficit this year, there is a 99% chance that we will continue to see more record budget deficits in the years ahead. Even if 2012 or 2013 saw a minor dip in our budget deficit, we could see budget deficits that are double or triple their current level within the next few years. In fact, NIA doesn't think our nation will survive until 2021 based on the path we are currently on. The U.S. won't be able to continue printing money to monetize the debt and deficits, without seeing an outbreak of massive inflation and perhaps hyperinflation at some point this decade.

To reach the White House's projected reductions in the budget deficit after a record budget deficit in 2011, the White House is projecting that annual price inflation in the U.S. will rise from just 1.3% in 2011, to just 1.8% in 2012, 1.9% in 2013, 2% in 2014, and 2.1% per year from 2016 through 2021. NIA believes these numbers are unrealistic and that real price inflation in the U.S. is already north of 5%. NIA believes real price inflation is likely to rise above 10% in either the second half of 2011 or early 2012. The Federal Reserve has held interest rates at artificially low levels of 0% to 0.25% for over two years. Artificially low interest rates are very inflationary. In order to contain price inflation and keep it under control, the Federal Reserve must raise interest rates to above the real rate of price inflation. The Fed won't do this because it would destroy our phony economic recovery.

If the Federal Reserve never lowered interest rates and kept them at 5.25% where they were in 2006, instead of having 5% price inflation today, we would likely have at least 5% price deflation. This means inflation is now conservatively 10% higher than where it would have been without the Federal Reserve's destructive actions. To put this into perspective, with three years of 5% price inflation, a product becomes 35% more expensive than it would have been with three years of 5% price deflation.

The U.S. Bureau of Labor Statistics (BLS) reported yesterday that year-over-year price inflation in the month of January was 1.63%, compared to 1.5% in December. Even based on the phony BLS numbers, it is obvious to all that price inflation in the U.S. is accelerating. NIA estimates that real price inflation is now closing in on 6%.

Not only is the White House budget using deceptive inflation numbers, but it is also misleading Americans about GDP growth. The White House budget is projecting 5% annual nominal GDP growth over the next 10 years. Over the past decade, the U.S. has seen an average annual nominal GDP growth rate of 3.95% and if you go back to the years 2001-2005 during the Real Estate bubble, we saw annual nominal GDP growth during those five years of 4.86%.

It is absolutely insane for the White House to be projecting nominal 5% GDP growth per year, with inflation of only 2% per year. There is absolutely no chance of the U.S. economy seeing real GDP growth of 3% per year, which would be higher than our average real GDP growth during the biggest artificial boom in U.S. history. In our opinion, any GDP growth the U.S. sees this decade will be created entirely by inflation. Considering that the White House expects there to be a lot of GDP growth in the years ahead, they are clearly putting a lot of pressure on Federal Reserve Chairman Ben Bernanke to create as much monetary inflation as possible.

As part of the White House's budget projections, they also project unemployment in the U.S. to decline from an average of 9.6% in 2011 to a low of 5.3% in years 2016 through 2021. Real unemployment in the U.S. today, after accounting for both short and long-term discouraged workers, is now approximately 22%. Between federal, state, and local government workers, government employees now make up 16% of all U.S. payrolls. Over the past 60 years, government employment growth has just about doubled the rate of U.S. population growth. During the upcoming hyperinflationary crisis, we could very easily see the number of government employees cut in half, which would send the official U.S. unemployment rate up to 16% and the real unemployment rate up to 29%.

 

The biggest problem NIA has with the White House budget is their projections for interest payments on our national debt. Historically, going back the past 50 years, yields on the 10-year bond have averaged about 7.2%. The 10-year bond yield has been skyrocketing in recent months and is currently 3.57%, up from being 2.381% on October 8th of last year. With the 10-year bond yield surging 50% over the past four months, there is no reason the yield can't surge another 50% over the next six to twelve months up to 5.36%. Yet, the White House is projecting the bond yield to average 3% in 2011 and to rise to only 3.6% in 2012, 4.2% in 2013, and up to a high of 5.3% for years 2017 to 2021. Trust us, if interest rates on the 10-year bond don't rise to 5.3% within the next six to twelve months, we guarantee they will still do so a lot closer to six months than six years.

With treasury yields having been held at artificially low levels for so long, we expect them to rise above historically average levels and remain there for many years. There is no doubt that we will see bond yields back above 7.2% in the years ahead. As inflation begins to spiral out of control, we expect to see bond yields rise to above 10% and beyond. The White House doesn't expect interest payments on our national debt to rise above $500 billion until the year 2015. They're projecting net interest payments in 2015 of $505 billion with our public debt averaging the year around $13.9 trillion. In order words, they expect us to pay only 3.6% interest on our debt that year.

To summarize, Obama expects our budget deficit to decline from $1.645 trillion this year down to a low of $607 billion in 2015 by having 5% per year GDP growth, only 2% per year inflation, unemployment in 2015 of only 5.9%, and an overall interest rate that is only 1/2 of historical 10-year treasury yields. NIA projects that the U.S. will see zero GDP growth adjusted for inflation and if we are right, and we also see the U-3 unemployment rate rise back above 10% along with our overall interest rate on our debt rising back to historical levels of 7.2%, our actual deficit in 2015 could very easily surpass $3 trillion.

In early 2008, the Bush Administration was projecting the U.S. budget deficit to decline to $160 billion in 2010, $96 billion in 2011, and for the U.S. to have a $48 billion surplus in 2012. Look how easily a $96 billion projected deficit turned into a $1.645 trillion deficit, 17 times higher than projected. It is nearly impossible to reduce budget deficits once they begin spiraling out of control, unless the government acted to dramatically slash spending by 50% or more in all areas of the budget including the so-called untouchable areas like Social Security, Medicare, and Medicaid. Obama pledged while running for President to cut the budget deficit in half during his first term, but it has so far increased by 262%. If we have just a few more years of trillion dollar plus budget deficits, interest payments on our national debt will begin to approach half of U.S. government tax receipts and at that point, hyperinflation will be all but guaranteed.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

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Link Wheels - Why smart marketers are using this service

Posted by admin on February 15, 2011

Link Wheels are being used by smart online marketers.  I am using a link wheel for my new site, Virginia Bankruptcy Lawyers, that I am trying to get #1 Google rankings for.  I purchased a link wheel and have been using it for a short time now.

A link wheel allows you get 10 good 2.0 sites up and running within a few days.  This is a basic service.   And once you get the link wheel.  Contact me privately and I will provide some secrets and tips to make your link wheel much more effective allowing you to  increase your traffic across your whole main site.

The link wheel is there to support your one main site, which should target one keyword phrase for best marketing results and Google rankings.

Last modified on February 15, 2011

Categories: BOTS, Search Engine Marketing - SEM, Search Engine Optimization - SEO
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Egypt: Preview of America in 2015

Egypt: Preview of America in 2015   The rioting and looting currently taking place in Egypt is primarily a result of massive food inflation and shows what all major cities in the United States will likely look like come year 2015 due to the Federal Reserve's zero percent interest rates and quantitative easing to infinity. On December 16th, 2009, NIA named Time Magazine's 2009 'Person of the Year' Ben Bernanke our 'Villain of the Year', saying he created "unprecedented amounts of inflation in unprecedented ways" and "When it costs $20 for a gallon of milk in a few years, Americans will have nobody to thank more than Bernanke."   What started out a few weeks ago as protests in Algeria with citizens chanting "Bring Us Sugar!" and five citizens being killed, quickly spread to civil unrest in Tunisia which saw 14 more civilian deaths, and has now spread to riots in Egypt where 300 Egyptian citizens have been killed. Food inflation in Egypt has reached 20% and citizens in the nation already spend about 40% of their monthly expenditures on food. Americans for decades have been blessed with cheap food, spending only 13% of their expenditures on food, but this is about to change.   NIA was the first to predict the recent explosion in agricultural commodity prices in our October 30th, 2009, article entitled, "U.S. Inflation to Appear Next in Food and Agriculture", which said we have a "perfect storm for an explosion in agriculture prices". A couple of months later in 'NIA's Top 10 Predictions for 2010' we predicted "Major Food Shortages" and said, "Inventories of agricultural products are the lowest they have been in decades yet the prices of many agricultural commodities are down 70% to 80% from their all time highs adjusted for real inflation". Over the past year, agricultural commodities as a whole have outperformed almost every other type of asset, with silver being one of only a few other assets keeping pace with agriculture. (On December 11th, 2009, NIA declared silver the best investment for the next decade at $17.40 per ounce and it has so far risen 64% to its current price of $28.39 per ounce).   The world is at the beginning stages of an all out inflationary panic. Wheat, which NIA previously called on 'NIAnswers' its favorite investment besides gold and silver, is now up to a new 30-month high of $8.63 per bushel and has doubled in price since June of last year. Algeria bought 800,000 tonnes of wheat this past week, bringing their total purchases for the month of January up to 1.8 million tonnes, which was quadruple expectations. Saudi Arabia is also beginning to stockpile their inventories of wheat. Rice futures have gained 8% during the past few days with Bangladesh and Indonesia placing extraordinary large orders. Indonesia's latest rice order was quadruple its normal allotment and Bangladesh plans to double rice purchases this year. Meanwhile, the U.S., which is the world's third largest exporter of rice, is expected to cut production by 25% in 2011.   NIA considers rice to be one of the world's most undervalued agricultural commodities at its current price of $15.96 per 100 pounds and forecasts a move back to its 2008 high of $24 per 100 pounds as soon as the end of 2011. NIA believes cotton, at its current price of $1.80 per pound, may have gotten a bit ahead of itself in the short-term. In NIA's first ever article about agriculture on February 17th, 2009, we said that cotton's "upside potential is astronomical" at its then price of $0.44 per pound. NIA pointed to increasing sales to textile companies in China and the fact that cotton was down 70% from its all time high as reasons to be very bullish on cotton at $0.44 per pound. Early NIA members could have made 309% on cotton, but today we see much bigger potential in rice. The recent spike in cotton reminds us of the 2008 spike in oil. Although we believe cotton will ultimately rise above $3 per pound later this decade, we could possibly see a dip to below $1.40 per pound first.   Many people in the mainstream media have been criticizing NIA's recent food inflation report, claiming that agricultural commodity prices have very little to do with prices of food in the supermarket. CNBC's Steve Liesman, in particular, claims that "rising commodity prices won't cause inflation". Liesman has it backwards. NIA has never claimed that rising commodity prices cause inflation. Soaring budget deficits that the U.S. government can't possibly pay for through taxation causes inflation when the Fed is forced to monetize the debt by printing money.   Rising commodity prices are only a symptom of inflation. The reason NIA was so bullish on agricultural commodities going back two years ago when we produced our first documentary 'Hyperinflation Nation', is because while gold is the best gauge of inflation and is often the best tool for predicting future money printing, agriculture is where the majority of the monetary inflation ends up going after the Fed's newly printed money trickles down to the middle-class and poor. With gold prices already surging two years ago when we produced 'Hyperinflation Nation', NIA said in the documentary "food prices have the potential to surge most during hyperinflation".   One thing NIA is almost 100% sure of is that come year 2015, middle-class Americans will be spending at least 30% to 40% of their income on food, similar to Egyptians today. As NIA warned in its latest documentary 'End of Liberty', if you don't have enough money to accumulate physical gold and silver, it is important to begin establishing your own food storage, and store enough food to feed you and your family for at least six months during hyperinflation. Many store shelves in Egypt are now empty after recent panic buying, with shortages of nearly all major staple items throughout the country.   The U.S. Treasury is getting ready to sell $72 billion in new long-term bonds next week, as the U.S. rapidly approaches its $14.29 trillion debt limit. The debt limit is now expected to be reached by April 5th and Treasury Secretary Geithner warned the U.S. will see "catastrophic damage" if it isn't raised. With the Federal Reserve now surpassing China and Japan as the largest holder of U.S. treasuries, the real "catastrophic damage" ahead will be hyperinflation as a result of the U.S. government doing absolutely nothing to dramatically reduce spending. It is an absolute joke that Obama during his State of the Union address announced $400 billion in spending cuts over the next 10 years, but then the very next day, the Congressional Budget Office increased its 2011 budget deficit projection by $400 billion to $1.48 trillion.   Not raising the debt limit would be a good thing, as it would force Washington to live within its means. Sure, the stock market would collapse and the U.S. economy would enter into its next Great Depression, but at least it would save the U.S. dollar from losing all of its purchasing power. In fact, the standard of living for middle class Americans might actually improve if the government allowed the free market to put our economy into a depression, because goods and services would get cheaper.

 

The U.S. economy has become a drug addict that is dependent on cheap and easy money from the Federal Reserve. While Wall Street bankers took home a record $135 billion in total compensation in 2010, up 5.7% from $128 billion in 2009, this money was stolen from middle-class and poor Americans through inflation. The more monetary inflation (heroin) the Federal Reserve creates in order to satisfy the (in the words of Gerald Celente) "money junkies" on Wall Street, the more middle-class and poor Americans become dependent on unemployment checks and food stamps just to survive. Millions of American students are graduating college with hundreds of thousands of dollars in debt but no jobs. Luckily for them (but not holders of U.S. dollars), NIA is hearing reports from both unemployed and underemployed college graduates with student loans that the government is reducing their required monthly payments by sometimes 90% or more based on their current incomes.

 

China and Japan recently saw their credit ratings downgraded, while the U.S. credit rating remains at "AAA". NIA believes it would make far more sense for the world's largest debtor nation to be downgraded instead of the world's two largest creditor nations. The Federal Reserve's second round of quantitative easing has yet to even reach the halfway point and the Fed already holds about $1.11 trillion in U.S. treasuries. By the time QE2 is over at the end of June, the Fed will own $1.6 trillion in U.S. treasuries, about what China and Japan own combined. Shockingly, Kansas City Fed President Thomas Hoenig is already dropping hints about QE3. According to Hoenig, the Fed may consider extending treasury purchases beyond June 30th, 2010, (the scheduled completion date for QE2) if U.S. economic data looks disappointing.

 

With the Fed taking over as the largest holder of U.S. treasuries, China is beginning to rapidly move away from the U.S. dollar and into gold. In just the first 10 months of 2010, China imported 209 metric tons of gold compared to 45 metric tons in all of 2009, a stunning five-fold increase. While the western world is downplaying the threat of inflation as much as possible, Asian countries understand that hyperinflation is the most devastating thing that can possibly happen to any economy. The demand for gold in Asia right now is the most intense it has ever been, as they look to tackle rising inflation before it becomes hyperinflation.

 

The Chinese are so smart that families are now giving each other gold bullion as gifts instead of traditional red envelopes filled with cash. China is now on track to soon surpass India as the world's largest consumer of gold. The China Securities Regulatory Commission recently gave Beijing-based Lion Fund Management Co. approval to create a fund that will invest into foreign gold ETFs.

 

U.S. stock mutual funds saw $6.7 billion in net inflows during the past two weeks, the most in any two week period since May of 2009. The rioting, looting, and civil unrest in Egypt is now making the U.S. look like the safe haven of the world, even though it should be considered the riskiest place to invest. From the Dow's low in August until now, about $38 billion was actually removed from U.S. stock mutual funds, despite the stock market rising 20%. The Dow Jones has been rising from September until now solely due to the Federal Reserve printing around $350 billion out of thin air. When central banks print money, stock markets often act as a relief valve due to there being too much inflation going into the hands of financial institutions.

 

The U.S. M2 money supply surged by $46.6 billion during the week ending January 17th to a record $8.8623 trillion, following a rise during the previous week of $7.6 billion. The rise in the M2 money supply over the past two weeks of $54.2 billion equals an annualized increase of 16%. The M2 multiplier now stands at 4.218 compared to a long-term average of 10. When QE2 is complete, the Fed's monetary base will likely stand at $2.59 trillion. A return to the long-term average M2 multiplier of 10 means we are due to see a 192% increase in the M2 money supply and that is not even including a possible QE3 and QE4.

 

The U.S. economic ponzi scheme could unravel very quickly in the years ahead, with the velocity of money increasing much faster than anybody expects. As more Americans learn about NIA and become educated to the truth about the U.S. economy and inflation, a complete loss of confidence in the U.S. dollar could occur very suddenly. It is important for all Americans to prepare as if hyperinflation will be here tomorrow. At least in Egypt, their currency still has purchasing power and their citizens are trying to implement a regime change before it is too late. By 2015 in America, it will already be too late and the civil unrest here has the potential to be many times worse.

 

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

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Grow thick anodyne flowers

Grow thick anodyne flowers

Spring is coming! It is a lovely 61 degrees outside now @ Furbelow Farms

Alpaca Fleece, Fur, Fiber, For Sale @ Furbelow Alpaca Farms: A state that uses the residents' tax dollars to SERVE the residents!

Alpaca Fleece, Fur, Fiber, For Sale @ Furbelow Alpaca Farms: A state that uses the residents' tax dollars to SERVE the residents!

A state that uses the residents tax dollars to SERVE the residents!

A state that uses the residents' tax dollars to SERVE the residents!


Missouri's approach to the problem of illegal immigration appears to be more advanced, sophisticated, strict and effective than anything to date in Arizona.

Do the loonies in San Francisco, or the White House, appreciate what Missouri has done?

When are our fearless President and his dynamic Attorney General going to take action to require Missouri start accepting illegal immigrants once again? So, why doesn't Missouri receive attention?

Answer: There are no illegals in Missouri to demonstrate.

The "Show Me" state has once again shown us how it should be done.

There needs to be more publicity and exposure regarding what Missouri has done.

In 2007, Missouri placed on the ballot a proposed constitutional amendment designating English as the official language of Missouri. In November, 2008, nearly 90% voting in favor! Thus English became the official language for ALL governmental activity in Missouri . No individual has the right to demand government services in a language OTHER than English.

In 2008 a measure was passed that required the Missouri Highway Patrol and other law enforcement officials to verify the immigration status of any person arrested, and inform federal authorities if the person is found to be in Missouri illegally. Missouri law enforcement offices receive specific training with respect to enforcement of federal immigration laws.
In Missouri, illegal immigrants do NOT have access to taxpayers benefits such as food stamps and health care through Missouri HealthNET.

In 2009 a measure was passed that ensures Missouri's public institutions of higher education do NOT award financial aid to individuals who are illegally in the United States .

In Missouri all post-secondary institutions of higher education to annually certify to the Missouri Dept. of Higher Education that they have NOT knowingly awarded financial aid to students who are unlawfully present in the United States.  So while Arizona has made national news for its new law, it is important to remember, Missouri has been far more proactive in addressing this horrific problem.

Missouri has made it clear that illegal immigrants are NOT welcome in the state and they will certainly NOT receive public benefits at the expense of Missouri taxpayers.

Alpacas in the snow again and baby goats

Snow and freezing rain overnight have the alpacas camped out in the Run in shed.
The pekin ducks seem to really enjoy snow and freezing rain, I guess it is good bathing weather for ducks.

We have had 3 baby cashmere goats this year, and we still have one young buck for sale from last year, Domino is now almost 4 months old and he is looking for a new home. http://furbelowfarms.com/html/goats.html