Federal Reserve Chairman Ben Bernanke used the word "unsustainable" 3 times in his 4OCT2010 speech at the Annual Meeting of the Rhode Island Public Expenditure Council.

Here is the most glaring excerpt:

"If current policy settings are maintained, and under reasonable assumptions about economic growth, the federal budget will be on an unsustainable path in coming years, with the ratio of federal debt held by the public to national income rising at an increasing pace."

Read the speech in its entirety at the link below:

Ben Bernanke\'s October 4th Unsustainable Speech

Imagrunt comments:

For those who do not yet realize it, history is replete with economic catastrophes, and as history so dictates, the greater the financial turmoil, the higher the likelihood of impending human warfare, which can be concurrently used as a fear-mongering distraction, as well as a "job creation" stimulus program.

Either way, the criminal banksters will profit by lending money to every side in the conflict.

When the fed chairman starts publicly referring to the current economic system, which he and his banking handlers have created, as unsustainable, be assured that we need to be on the alert for an increase in false flags, followed by sabre rattling, and finally, Epic World War.

IMO, this is the big one.

You have been alerted, and if you lack sufficient preps, this is your last opportunity.

Thanks Imagrunt, good post and so noted !

Psalm 144:1 Blessed be the LORD, my rock, Who trains my hands for war, And my fingers for battle;

"This Is Starting To Get Very Real: Agricultural Commodity Prices Have Exploded And Now The Price Of Food Is Beginning To Rise Substantially In The United States And All Over The World"

Do you believe that you will always be able to run out to Wal-Mart or to the local supermarket and buy massive amounts of inexpensive food? If so, you might want to think again. During 2010, agricultural commodity prices have absolutely exploded. Nearly every single important agricultural commodity has seen a double digit percentage price increase. In fact, the S&P GSCI Agriculture Index recently surged to a fresh two year high. Now food producers and retailers are starting to pass those commodity price increases on to consumers. Today when I went to the supermarket I was absolutely startled by some of the price increases that I witnessed. On some of the items that I most commonly purchase, prices were up 20 or 30 percent. So just what in the world is going on here? Well, it turns out that there was a lot of bad weather around the world this year, so many harvests were worse than projected. In addition, the growing population of the world has an increasingly voracious appetite for food. When supply gets tighter as demand continues to go up that means that prices are going to increase.

On a recent article on our sister site entitled "Rampant Inflation In 2011? The Monetary Base Is Exploding, Commodity Prices Are Skyrocketing And The Fed Wants To Print Lots More Money" a reader named Erica left a comment describing the food prices that she is seeing in her area....

Food inflation is real, and it is here. Just yesterday I compared my receipt from a grocery run to prices I have from the same exact store from September 15, 2009. Bacon? Up 52% to $13.69 from $8.99 for 4 lbs. Butter? Up 73% to $9.99 from $5.79 for 4 lbs. Pure vanilla extract up 14% to $6.79 from $5.95. Chopped dried onions up a mere 2% but minced garlic (wet) was up 32%.

These price increases are not a coincidence. This is happening all over the United States.

Food inflation is here and it is not going away any time soon.

In fact, food inflation is hitting consumers hard all over the globe this fall....

*According to the United Nations, international wheat prices have soared 60 to 80 percent since July.

*Since the beginning of 2010, the price of bread has gone up 17 percent and the price of meat has gone up 15 percent in European Union countries.

*The inflation rate in Russia rose to 7 percent in September primarily because of rising food costs.

*Turkey’s inflation rate accelerated to 9.2 percent in September, and authorities there are primarily blaming rising food prices for the increase.

*Food riots have already erupted in the poverty-stricken country of Mozambique and the government there is desperately trying to maintain order.

*Food prices have doubled in Afghanistan and authorities are warning that there could be an outbreak of famine unless the nation quickly receives more humanitarian aid.

So is there hope that things are going to get better in the years ahead?

No, not really.

In fact, global demand for food is only going to increase in the years to come.

Global demand for meat and poultry is forecasted to increase 25 percent by 2015.

Overall, it is being projected that global demand for food will more than double over the next 50 years.

So where in the world will all of that extra food come from?

That is a very good question.

Meanwhile, rising food prices threaten to send a new wave of inflation sweeping across the globe.

Mark O’Byrne, the executive director of GoldCore in Dublin, was recently quoted in Bloomberg as saying that the Federal Reserve "continues to be worried about low inflation, but the rising prices seen in agricultural commodities such as wheat would suggest that they may be looking in the rear-view mirror and should be more concerned about inflation, especially in the medium and long term."

As mentioned earlier, wheat prices have soared 60 to 80 percent this year, but wheat is not the only agricultural commodity that is going up big time.

In a recent article entitled "An Inflationary Cocktail In The Making", Richard Benson listed many of the other agricultural commodities that have spiked in price in 2010....

*Coffee: 45%

*Barley: 32%

*Oranges: 35%

*Beef: 23%

*Pork: 68%

*Salmon: 30%

*Sugar: 24%

So are American families seeing large increases in pay to keep up with all of this food inflation?

No, actually incomes are going down.

Median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009.

In fact, of the 52 largest metro areas in the nation, only the city of San Antonio did not see a decline in median household income in 2009.

American families are being squeezed like never before, and the last thing that they need is for the price of food to start moving up substantially.

But it isn't just the price of food that is going up.

Health insurance companies across the United States are announcing that health insurance premiums are going to go up substantially this year because of the new health care law.

American consumers can only be stretched so far.

Eventually something has got to give.

In fact, we are already seeing more Americans beginning to fall into poverty than ever before. Today, one out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

Unfortunately, there is every indication that the Federal Reserve wants to make inflation every worse.

It seems like almost every single day now a different official from the Federal Reserve makes public comments about how another round of quantitative easing is going to be necessary in order to stimulate the U.S. economy.

But if the Federal Reserve pumps even more paper money into the financial system isn't that going to put inflationary pressure on the economy?

Of course.

It is time to wake up.

Your dollars are never going to stretch farther than they do today.

The price of food is going to continue to go up.

But perhaps you disagree. Please feel free to leave your opinion in the comments section below....

http://endoftheamericandream.com/arc...over-the-world

There are two separate items you have to understand.
1. The value of the US Dollar $ effects the cost of anythung manufactured abroad or has parts or ingredents manufactured abroad. I suspect that this is the reason that stock prices are climbing even as the shares traded are stable.
2. When the US Government competes with the US Consumer the price of the items become more expensive as they become more scarce and thus the price goes up.
When you have the government buying grains, and other products to send to Haiti and South America it makes food made from them cost more for the American people who buy it.
It will soon get worse as more and more people go on food stamps and welfare. Then when the Federal Government can no longer pay Welfare and the recipients begin to riot and steal it from the stores the stores will stop putting it out. Then the price will go balistic.
Remember! While Spam taste like crap it is much more nutricious as a food source. Stock up on things that come in cans that you can put in a plastic wrap, then in a wood box and bury it deep in your garden. When the riots get bad the Government will start shopping at "YOUR HOUSE" instead of Walmart. It is still a Federal Offence to stockpile more food than your family can consume in a 15 day period.
Prepare, but prepare inteligently, and remember that loose lips sink ships!

".....a Federal Offence to stockpile more food than your family can consume in a 15 day period."

Say what?

I wonder what isnt a "federal offense" these days?

That was a presidential Executive order from the WWII days, but is just as valid today as Bush's Emergency powers EO's.
However none of these are enforced unless they fit the needs of the UNITEDSTATES OF AMERICA Corp.

Funny how that works..Go in debt personal or national and the big bankers get to under-wright it..Cha-ching...go to war the big banks get to under-wright it...cha-ching...pass draconian insurance laws and ...yep the big bankers get to under-wright it

coydog
What is more amazing is that every financial propaganda source is screaming that the Fed is going under and so will every Fed supported bank and yet most Americans still keep their saving in the bank.
Knowing that thousands of Banks have failed or have been taken over by the Fed most Americans continue to invest in Bank CD's and Insurance schemes.
When the Fed pulls the plug and transmits their money overseas what will those Americans use to try and buy that food?

Tuesday, October 5, 2010

Bernanke Tells the Truth: The United States is on the Brink of Financial Disaster

Yesterday, Federal Reserve Chairman Ben Bernanke delivered a speech before the the Annual Meeting of the Rhode Island Public Expenditure Council in Providence, Rhode Island. In the speech, he warned about the current state of the government finances. His conclusion, the situation is dire and "unsustainable".

It is remarkable that mainstream media has given this speech no coverage. I repeat, the central banker of the United States says in his own words:

Let me return to the issue of longer-term fiscal sustainability. As I have discussed, projections by the CBO and others show future budget deficits and debts rising indefinitely, and at increasing rates. To be sure, projections are to some degree only hypothetical exercises. Almost by definition, unsustainable trajectories of deficits and debts will never actually transpire, because creditors would never be willing to lend to a country in which the fiscal debt relative to the national income is rising without limit. Herbert Stein, a wise economist, once said, "If something cannot go on forever, it will stop."9 One way or the other, fiscal adjustments sufficient to stabilize the federal budget will certainly occur at some point. The only real question is whether these adjustments will take place through a careful and deliberative process that weighs priorities and gives people plenty of time to adjust to changes in government programs or tax policies, or whether the needed fiscal adjustments will be a rapid and painful response to a looming or actual fiscal crisis.

This is as close as you are ever going to see a central banker admit that his country's financial situation is so dire that it could breakup at any time.

Here's more from Bernanke's remarkable speech:

The recent deep recession and the subsequent slow recovery have created severe budgetary pressures not only for many households and businesses, but for governments as well. Indeed, in the United States, governments at all levels are grappling not only with the near-term effects of economic weakness, but also with the longer-run pressures that will be generated by the need to provide health care and retirement security to an aging population. There is no way around it--meeting these challenges will require policymakers and the public to make some very difficult decisions and to accept some sacrifices. But history makes clear that countries that continually spend beyond their means suffer slower growth in incomes and living standards and are prone to greater economic and financial instability.

Now, get this, he warns that it is not only the Federal government that has financial problems, but also states and local governments:

Although state and local governments face significant fiscal challenges, my primary focus today will be the federal budget situation and its economic implications.

Does Bernanke see the tsunami hitting or what?

Then, he put things in historical perspective:

The budgetary position of the federal government has deteriorated substantially during the past two fiscal years, with the budget deficit averaging 9-1/2 percent of national income during that time. For comparison, the deficit averaged 2 percent of national income for the fiscal years 2005 to 2007, prior to the onset of the recession and financial crisis. The recent deterioration was largely the result of a sharp decline in tax revenues brought about by the recession and the subsequent slow recovery, as well as by increases in federal spending needed to alleviate the recession and stabilize the financial system. As a result of these deficits, the accumulated federal debt measured relative to national income has increased to a level not seen since the aftermath of World War II.

Then, he explains the deterioration and the problems it will create for the entire economy:

For now, the budget deficit has stabilized and, so long as the economy and financial markets continue to recover, it should narrow relative to national income over the next few years. Economic conditions provide little scope for reducing deficits significantly further over the next year or two; indeed, premature fiscal tightening could put the recovery at risk. Over the medium- and long-term, however, the story is quite different. If current policy settings are maintained, and under reasonable assumptions about economic growth, the federal budget will be on an unsustainable path in coming years, with the ratio of federal debt held by the public to national income rising at an increasing pace.2 Moreover, as the national debt grows, so will the associated interest payments, which in turn will lead to further increases in projected deficits. Expectations of large and increasing deficits in the future could inhibit current household and business spending--for example, by reducing confidence in the longer-term prospects for the economy or by increasing uncertainty about future tax burdens and government spending--and thus restrain the recovery. Concerns about the government's long-run fiscal position may also constrain the flexibility of fiscal policy to respond to current economic conditions.

Then, he tells us how powerful the negative trends are and how the aging population and Obamacare are going to make things worse:

Our fiscal challenges are especially daunting because they are mostly the product of powerful underlying trends, not short-term or temporary factors. Two of the most important driving forces are the aging of the U.S. population, the pace of which will intensify over the next couple of decades as the baby-boom generation retires, and rapidly rising health-care costs. As the health-care needs of the aging population increase, federal health-care programs are on track to be by far the biggest single source of fiscal imbalances over the longer term. Indeed, the Congressional Budget Office (CBO) projects that the ratio of federal spending for health-care programs (principally Medicare and Medicaid) to national income will double over the next 25 years, and continue to rise significantly further after that...he aging of the U.S. population will also strain Social Security, as the number of workers paying taxes into the system rises more slowly than the number of people receiving benefits. This year, there are about five individuals between the ages of 20 and 64 for each person aged 65 and older. By 2030, when most of the baby boomers will have retired, this ratio is projected to decline to around 3, and it may subsequently fall yet further as life expectancies continue to increase. Overall, the projected fiscal pressures associated with Social Security are considerably smaller than the pressures associated with federal health programs, but they still present a significant challenge to policymakers.

Then he goes back to warn that the financial mess also exists at the state and local level:

The same underlying trends affecting federal finances will also put substantial pressures on state and local budgets, as organizations like yours have helped to highlight. In Rhode Island, as in other states, the retirement of state employees, together with continuing increases in health-care costs, will cause public pension and retiree health-care obligations to become increasingly difficult to meet. Estimates of unfunded pension liabilities for the states as whole span a wide range, but some researchers put the figure as high as $2 trillion at the end of 2009.5 Estimates of states' liabilities for retiree health benefits are even more uncertain because of the difficulty of projecting medical costs decades into the future. However, one recent estimate suggests that state governments have a collective liability of almost $600 billion for retiree health benefits. These health benefits have usually been handled on a pay-as-you-go basis and therefore could impose a substantial fiscal burden in coming years as large numbers of state workers retire.

Bernanke then breaks the news that the problem is global:

It may be scant comfort, but the United States is not alone in facing fiscal challenges. The global recession has dealt a blow to the fiscal positions of most other advanced economies, and, as in the United States, their expenditures for public health care and pensions are expected to rise substantially in the coming decades as their populations age. Indeed, the population of the United States overall is younger than those of a number of European countries as well as Japan.

Bernanke then re-emphasises, the damage this will do to the overall economy:

Failing to address our unsustainable fiscal situation exposes our country to serious economic costs and risks. In the short run, as I have noted, concerns and uncertainty about exploding future deficits could make households, businesses, and investors more cautious about spending, capital investment, and hiring. In the longer term, a rising level of government debt relative to national income is likely to put upward pressure on interest rates and thus inhibit capital formation, productivity, and economic growth. Larger government deficits increase our reliance on foreign lenders, all else being equal, implying that the share of U.S. national income devoted to paying interest to foreign investors will increase over time. Income paid to foreign investors is not available for domestic consumption or investment. And an increasingly large cost of servicing a growing national debt means that the adjustments, when they come, could be sharp and disruptive. For example, large tax increases that might be imposed to cover the rising interest on the debt would slow potential growth by reducing incentives to work, save, hire, and invest.

He then states that we do not know how much time is left before all hell breaks loose:

It would be difficult to identify a specific threshold at which federal debt begins to pose more substantial costs and risks to the nation's economy. Perhaps no bright line exists; the costs and risks may grow more or less continuously as the federal debt rises. What we do know, however, is that the threat to our economy is real and growing, which should be sufficient reason for fiscal policymakers to put in place a credible plan for bringing deficits down to sustainable levels over the medium term.

From there,Bernanke goes into a bit of wishful thinking by identifying ways Congress can rein in spending and make the tax system more efficient. Good luck with all of that.

The real important part of Bernanke's speech is the first half where he warns of the financial crisis just ahead.

So I suppose every obedient LDS member will soon be incarcerated?

That would be one effective way for .gov to start the war they so desperately need as a distraction.