 For
one in 53 American households, it may already be too late
Mike Ward
The
Daily Reckoning
January 23, 2006
The Daily Reckoning PRESENTS:
In typical imperial
style, enactment of the 2005 bankruptcy law that drove so many
hard-spending American's into insolvency will increase Federal
budget deficits by about $280 million between 2006-2010. It's
this type of imperial financing that is changing your life forever....
Dear Reader,
On Jan. 11, 2006, at 8:20 EST,
a startling news release crossed the wires.1
It proved us right, but it
was a hollow victory. Because the results of a conclusive report
found that in 2005, one in every 53 American households filed
for bankruptcy.
And you are personally footing
the bill for America's profligate ways.
In typical imperial style,
enactment of the 2005 bankruptcy law that drove so many hard-spending
American's into insolvency will increase Federal budget deficits
by about $280 million between 2006-2010. It's this type of imperial
financing that is changing your life forever.2
None of your elected officials
will fess up to their madness. But the Federal budget really
is a bipartisan flim-flam. In the so-called corridors of power,
the Democrats and Republicans combined have piled on more public
debt in the two Bush administrations than in all the administrations
and all the Congresses that came before them put together.
Even the Heritage Foundation
cannot hide the ugly reality that Federal deficits will likely
reach a migraine-inducing $1 trillion per year in the next decade.
Or that the national debt is expected to triple to $16 trillion.3
"Masterfully delivered!
Repeated buckets full of ice cold reality to the face never felt
so good. You'll giggle, you'll shout, you'll clinch your fist
and stomp your feet - and you'll beg for more. I did!"
-- Mathew Gordon (Long
Beach, CA)
In the federal ledgers, much
of this colossal debt can be traced to the empire's never-ending
appetite for war, including the hot one in Iraq. It has already
gone on longer than America's participation in World War II.4
Since March 2003, the monthly
cost of the war in Iraq has risen from $4.4 billion to $7.1 billion.5 That means the war will cost $266 billion
than originally projected - and ultimately hit $1.2 trillion.6 Every American is writing a check to Uncle
Sam for $727 to fund the Empire's Iraqi expedition - and it will
get bigger.7
Looking at it another way,
Americans so far pay $46 million per Al Qaeda operative killed.8
But what is America to do?
As a declining empire, it seems that the only thing it has left
to offer in a globalized economy is the soft warmth of her protection.
That's why the Defense Department's
budget continues to soar. In 2002 it was $310 billion. Last year,
it swelled to $420.6 billion.
And every penny of it has been
borrowed at 4% interest.
As you know, we tried to tell
our leaders in Washington that imperial financing rarely pays.
On November 14th date, just after we rushed 537 copies of the
Empire
of Debt to the House and Senate offices, the White House
and the Federal Reserve. Nothing happened. We got a few hundred
form letters thanking us for the gift. And a few political agendas
from Senators Reed and Feingold.
All while Congress was busy
passing one of the biggest pork barrel budgets the nation has
ever seen.
"I purchased your book
"Empire of Debt", and now have a better understanding
of the empire. I did not contact any representative in Washington
since they reply with canned messages. Thank you for the information
in your book. One humble suggestion---you should have it made
into a movie, there are some great characters in Washington."
-- D. Cole
Every hour of every single
day, the United States continues to rack up another $80 million
of debt. Just try "googling" a debt clock. It's entertaining
watching how quickly the $100 and $1000 dollar columns whiz buy.
The renowned Levy Institute estimates that the United States
will owe foreigners $8 trillion by 2008 - a breathtaking 60%
of our gross domestic product.
Think about it: if we were
trying to settle up on that debt $6 out of every $10 that we
earn in America has already been spent. Thanks to China or Japan
or South Korea or the rest of Asia, we're racking up a mortgage
nobody can afford, not even the proud beneficiary's of the "resilient"
the U.S. economy.
As if we need to point out
what's worse, our trade deficit with China alone is expected
to surpass $200 billion in 2005 - a 31% increase over the $162
in 2004. And that alarming imbalance includes nearly $4 billion
that American executives are pumping into Chinese business ventures
as foreign direct investments.9
"Although the authors
don't claim to have a crystal ball, as far as I'm concerned,
they offer as clear and likely accurate a view of the future
as you're going to find."
-- Doug Casey, author
of the best selling Crisis Investor,
But who is really carrying
the risk for those Wall Street big shots? In a not-so-indirect
way, it is you and me.
Wal-Mart's biggest trading
partner is China. Wal-Mart, the world's largest retailer, divulged
it purchased some $18 billion in merchandise in 2004 from China,
nearly 10% of all Chinese goods sold in the U.S. that year.10
At the same time, one 200-employee
Wal-Mart store may cost federal taxpayers $420,750 per year in
various assistance programs for the poor. In 2001, the last year
Wal-Mart had disclosed salaries for most occupations, sales associates
earned on average $8.23 an hour for annual wages of $13,861.
The 2001 poverty line for a family of three was $14,630.11
For all of the empire's adventurism,
Americans themselves are growing poorer. In fact, as an imperial
citizen, you are sitting smack dab in the middle of all this
debt.
"I only wish I could
communicate ideas in the wonderfully relaxing and enjoyable manner
in which both of you write. In the mean time I will sit with
my precious metal bullion and stocks, regularly read your columns,
and watch my solvency increase as the market becomes more and
more irrational. Congratulation! I've even ordered a few copies
for friends."
-- John Cooke (Auburn,
AL)
Banks are taking back homes
almost faster than they can finance them. In December 2005, 81,290
properties across America entered some stage of foreclosure.
That's a 13.5% surge from the previous month - and the highest
for the year.12
The so-called hottest markets
for real estate were also the most gruesome. Texas' December
foreclosures took the dubious distinction of the highest anywhere
- a 61% jump. Nevada and Utah, whose markets were even hotter
than their summers, saw a 30% increase in December foreclosures.
And in sunny California, 27% more people had to file for foreclosures
around the holiday gift-giving season than in November.
For imperial citizens, personal
wealth is as valuable as the paper that the first, second and
third mortgage is written on. American's have stopped making
things. Instead, our wealth is built on credit. The more we borrow
the richer we feel, when in fact nearly every asset we own is
made in some other country that we paid for with borrowed money.13
"A true tour de force
and an engaging read. Well worth the money for not only your
personal enrichment, but to encourage the authors to write again!!"
-- M. Kelly (Albuquerque,
NM)
That's why American trade deficit
last year is expected to top $710 billion - surpassing the $617.6
billion of 2004 by 15%.14
We keep importing things because
America has given up manufacturing. The Gross Domestic Product
(a measurement of our productivity) is forecast to nudge up in
2006 from $12.9 trillion in January to $13.1 trillion in December.
That tiny annual expansion of 1.6% comes nowhere close to the
15% rise in our trade deficit.15
And Washington is certainly
doing its part to keep the empire in the red.
"You'll find that Empire
of Debt draws on their wealth of obscure knowledge and builds
on their intellectual courage. It debunks the humbug that everybody
thinks they know but just isn't so. It's really a delight to
see stupidity exposed on every page."
-- The International
Speculator
In 2004, the annual government
deficit already hit $7 trillion, according to the U.S. comptroller.
That's roughly $24,000 the government owes for every American
man, woman and child.
It's money that's coming out
of your pocket, and I'm not just talking taxes...but also from
higher gas prices, food bills, even college tuition. And be assured,
Uncle Sam has no intention of paying you back.
At the same time, Americans
keep spending more than they earn - as if they are entitled to.
Today, the average American
household has $8,000 in credit card debt. And for every $19 Americans
earn, they spend $20.
When you live on the edge,
the smallest miscalculation can send you tumbling. The American
Bankers Associated reported that gas spikes last summer actually
caused 4.74% of Americans to fall 30 days or more behind in their
credit card payments - the third highest level on record. Not
surprising, the highest period of late payments occurred earlier
in the year, when imperial citizens were completely caught off
guard by run-away gas prices, causing 4.81% of them to slip by
30 days or more.16
That was also the period when,
for the first time in history, the savings rate of Americans
dipped into negative numbers. Compare that to China's 25% savings
rate, and you can see the looming danger as China buys up your
future with cash to burn.
As CNN reported, "The
American consumer has become deeply addicted to spending, running
up ever higher levels of debt in order to live in a fashion that
is beyond his means. And the world has become equally addicted
to the consumer continuing to burn through cash."
"But it's my understanding
these guys wrote that book and some of this one while over in
France (they're also the team behind the Daily Reckoning ezine,
which I also read). There must be something in the wine over
there that makes you see a little more deeply into things than
most are prone to here in the States. Or maybe it's the distance
from their homeland (they're both American) that gives them perspective."
-- Jack T. (Philadelphia,
PA
That is great news for bankruptcy
attorneys. They are the ones who are getting rich. Last year,
they raised their fees by 100%.17
A noted Washington, D.C. attorney
who advises the American Bankers Association on bankruptcies
explains it this way: Like divorce, bankruptcy does not carry
the social stigma it once did.18
So with no more concern than
sliding a quarter into a parking meter, consumers' debt continues
to rise toward an all-time high of $2.16 trillion - twice the
cost of the war in Iraq.19
Too often, when they return
to their car, the meter is expired.
"I was shocked that
the case for an American empire is so clear. Empire of Debt has
made me much more aware of the very steady path toward financial
grandiosity and empire that Americans have walked in the last
century. I don't think that any discussion of American domestic,
foreign, or monetary policy, legislation, or law is complete
without this view of American history, so highly recommend the
book."
-- R. Bexton (San Francisco,
CA)
Just look at the new credit
card law that hit the books on Jan. 1, 2006. Thanks to your friendly
banker, your monthly minimum payment has doubled for your revolving
account. "They" say the higher payments are for your
own good. Because if you are one of the 35 million imperial citizens
who only make the minimum payment, and had the average credit
card balance of $9,200, it would take you 15 years to pay it
off.20
But let's fact it. The lure
is irresistible. Online holiday shoppers spent more than $30.1
billion online in the weeks leading up to Christmas 2005 - a
25% increase over the same overly festive season in 2004.21
And online merchants don't
take hard cash.
At Amazon.com, holiday shoppers
charged the essentials of an imperial lifestyle. Last year's
holiday best-sellers for the online superstore included the Mario
Party 7 video game, an electronic dart board, the "March
of the Penguins" DVD movie, 2 pounds of chocolate truffles
and just about every version of Apple's Taiwanese-made iPod.22
"If the authors' style
is troublesome to some reviewers, I found it amusing and insightful."
-- W. Wilmeth
Many Americans have no idea
what's coming. They've been blinded by "The 10 Delusions
of Empire" that Bonner and Wiggin reveal. It's those delusions
that the government has promulgated that have created the destructive,
imperial attitudes that so many have come to believe. You see,
there's a cadre of "imperial citizens" that can't imagine
this Empire of Debt will ever end.
That's why the prestigious
Economist Magazine named Empire of Debt one of the top 10 must-read
books of 2005-2006. This book is a wake-up call -- as well as
a call to arms to every American.
"More than a great
read, it will challenge and inform your understanding of events
through every news article you read, political debate you hear,
or news show you watch. The power of the ideas is not that will
be unconditionally accepted as truth, but that they provide a
perspective that is important for any rational discussion of
current events. At the heart of the book are some commonly held
beliefs and truths that seem strangely absent from the current
political debate."
-- JST (Waterloo, Ontario,
Canada)
Empire of Debt is filled with
the latest economic research from two internationally famous
authors, Bill Bonner and Addison Wiggin. And what it finally
uncovers is the whole secret story of how and why America has
put itself into the worst financial crisis since 1929. And more
importantly, how you can protect yourself and your assets from
this crisis.
Worse yet, the man in the striped
suit and tall hat is already asking for more...
Up until now, there's been
little you could do to protect your wealth, your retirements
and your way of life...
Inside Empire of Debt, you'll
discover the specific steps you can take to protect yourself
from the massive debt buildup and the secret funneling away of
your funds.
Don't be caught off guard.
Empire of Debt shares the five things you must do now to protect
yourself - including buying the one investment you cannot live
without. (If it's not already in your portfolio... you need to
get it right away.)
They give forthright, candid
and sincere views about how we, as Americans, have become freely
unsatisfied to the point of destruction.
"Not only is this book
so well written, but Bonner and Wiggin surpassed my expectations
for a reality based, factual book on the very subject that others
are trying to deny. It was well researched and based with solid
facts from our own American history."
-- Becca Gibson
Empire of Debt may well be
the most important reading you'll do in the next five years during
this period of unrelenting crises.
"Empire of Debt is
not for everyone, only for those of us who hope to enjoy continuing
prosperity amidst difficult conditions."
-- Eric Fry, editor,
The Rude Awakening
Bonner and Wiggin wrote Empire
of Debt to warn you of the danger and give you a clear path to
profits. They give you the knowledge you need to protect yourself
- and prosper - as the American empire flails upon itself.
Empire of Debt details how
the government's irresponsibility has bled into society. Following
the government's lead, Americans have felt free to spend, spend,
spend - putting themselves in deeper and deeper debt.
"The message of the
book is alarming, all right--the American economy, and the American
empire--are headed for colossal and probably inescapable train
wrecks. They are both doomed by a mountain of personal, corporate,
and national debt unprecedented in the history of mankind."
-- R.W. Behan (Lopez
Island, Washington)
With just a few simple steps,
you can prepare your portfolio to weather the coming crisis.
Empire of Debt will show you everything you need to know. And
if you act now, you can get your own copy of Empire of Debt for
just $18.45. That's a full 34% off the cover price, click below
to order today.
We believe Empire
of Debt, for less than $19, is the most important financial
purchase you can make this year, more important than any stocks
or index funds you can find.
After reading it, I'm sure
you'll agree.
Notes
1
http://money.cnn.com/2006/01/11/pf/personal_bankruptcy/
2 http://www.cbo.gov/showdoc.cfm?index=6266&sequence=0
3 Daily Reckoning
1/13/06
4 Daily
Reckoning 1/13/06
5 http://www.cfr.org/publication/9565/economic_costs_of_the_iraq_war.html
6 http://www.globalpolicy.org/security/issues/iraq/attack/consequences/2005/09costsofthewar.pdf
7 http://www.commondreams.org/views05/0831-31.htm
8 http://voxbaby.blogspot.com/2004/11/americas-secret-war.html
9 http://www.uscc.gov/annual_report/2005/05_executive_summary.htm
10 http://www.aflcio.org/corporatewatch/walmart/walmart_5.cfm
11
http://wakeupwalmart.com/facts/
12 http://realtytimes.com/rtapages/20060113_foreclosures.htm
13 http://www.google.com/search?hl=en&lr=&rls=GGLD%2CGGLD%3A2005-15%2CGGLD%3Aen&q=u.s.+
foreclosures+2005&btnG=Search
14 http://www.cbsnews.com/stories/2006/01/12/business/main1203762.shtml?CMP=OTC-RSSFeed&source=
RSS&attr=Business_1203762
15 http://www.forecasts.org/gdp.htm
16 http://www.cbsnews.com/stories/2006/01/10/business/main1195638.shtml
17 http://money.cnn.com/2005/10/17/pf/debt/bankruptcy_law/
18 http://www.mysanantonio.com/business/stories/MYSA010806.1R.banruptcystories.1bc3eb8a.html
19 http://timesunion.com/AspStories/story.asp?storyID=438841&category=BUSINESS&BCCode=HOME&newsdate
=1/12/2006
20 http://www.hoinews.com/home/headlines/2148207.html
& http://credit.about.com/od/creditanddebitcards/a/051805.htm
21 http://www.internetnews.com/ec-news/article.php/3576601
22 http://www.the-dma.org/cgi/dispnewsstand?article=4289
Sincerely,
Mike Ward
The Daily
Reckoning
Publisher, Agora Books
 "Empire
of Debt is probably the most important history book you will
ever read."
-- Dan Brown, (Madison,
AL)
"Not only have I bought
the book and read it, but I have given it now as a gift to two
other people. I have also sent an email to my Congressman, Dan
Lungren, urging him to read it or I would start a petition. I
will be very interested in what this real live, breathing elected
official had to say in this hand written letter."
-- David Tribble (Sacramento,
CA)
"The United States
can be likened to Rome before the fall of the empire. Its financial
condition is worse than advertised. It has a broken business
model. It faces deficits in its budgets, its balance of payments,
its savings - and its leadership."
-- David Walker, Comptroller
General of the United States
321gold Inc
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