Why The Collapse Of The U.S. Economic & Financial System Has Accelerated

By the SRSrocco Report,

The collapse of the U.S. economic and financial system accelerated this year, thus pushing the country closer to a third-world status. Most Americans are unaware of the dire consequences facing the nation, so they continue to believe business as usual will continue indefinitely.

Unfortunately, lousy reporting by the Mainstream media along with the public’s denial and delusional thinking is a recipe for disaster for most Americans over the next several years.

The U.S. economy is being propped up by a great deal of monetary printing, Fed stock and bond purchases and extreme leverage in all areas of the market. While these policies have given the “ILLUSION” of continued prosperity, or at best a sustainable slow growing economy, the debt now in the system is unsustainable.

Still to this day, most investors (including precious metals investors) do not understand the real reason for the massive increase in U.S. Federal debt. They believe the debt was either increased to enslave Americans or to fund continued economic growth. While the second reason is more accurate, they still fail to understand the “ROOT CAUSE” of the debt increase.

The Massive Increase In U.S. Debt Tied To Falling U.S. Oil Production & Rising Oil Prices

This chart puts the huge increase in total U.S. debt in perspective:

The annual increase in U.S. debt was very small up until the 1970’s. This was due to the peak of cheap U.S. domestic oil production. U.S. oil production peaked in 1970 at about 10 million barrels per day (mbd). That year, total U.S. debt was $370 billion. That’s hilarious, because the annual deficits today are larger than the entire U.S. debt in 1970.

As the oil price increased in the 1980’s and as U.S. oil production declined, total U.S. debt continued to increase. However, in the late 1990’s, the U.S. debt leveled off. This was due to the price of oil declining below $20, reaching $14 in 1998 and $19 in 1999. In 1999, U.S. debt had increased to $5.4 trillion.

Then as the price of oil increased from $30 in 2000 to nearly $100 in 2008, total U.S. debt nearly doubled to $10.5 trillion. In addition, U.S. domestic oil production declined nearly 4 million barrels per day from 1985 to 2008. This also had a negative impact on U.S. debt levels.

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While it’s true that the cost of energy is only a small part of U.S. GDP, its impact is multiplied when the U.S. economy and government try to provide the same standard of living as it did prior to 1970. Furthermore, the EROI- Energy Returned On Invested of U.S. oil production declined significantly since the 1950’s. The EROI of U.S. oil and gas production in 1970 was 30/1, however shale oil comes in at a low EROI of 5/1.

Thus, the falling EROI means less profitable barrels to provide the same (higher) standard of living as Americans enjoyed before 1970.

The U.S. Economy Is Propped Up By Massive Govt Spending

In fiscal 2015, the United States Govt. (supposedly) spent $3.8 trillion on mandatory, discretionary funding and interest on the debt. Total revenues were only $3.18 trillion, so the U.S. Govt had to borrow $583 billion to pay its bills:

These next two charts break down the “Mandatory” and “Discretionary” spending:

The $3.8 trillion in U.S. Govt spending is 21% of total U.S. GDP for fiscal 2015. Even though the U.S. Govt spends a lot of money on many different areas, let’s focus on Social Security and Medicare-Health. These two parts of the mandatory spending equal $2.2 trillion of the $3.8 trillion total Federal budget. This is nearly 58% of the total budget.

That $2.2 trillion spent in the U.S. economy has a “MULTIPLIER EFFECT”. This is the reason the Fed and U.S. Govt won’t allow a collapse in stock, bond or real estate values. The revenues collected by the U.S. Govt depend on elevated stock, bond and real estate prices. Once these start to collapse, then revenues plummet causing the annual budget deficit to balloon higher. If the budget deficit was $583 billion (that’s what the Govt reports) in 2015 ,then what happens when the market cracks and highly inflated stock, bond and real estate prices collapse?

Well, we already experienced that in 2008. Here is the most recent update of the U.S. Retirement Market as of Q1 2016:

The total U.S. Retirement Market collapsed 21% from 2007 to 2008 ($17.7 trillion down to $13.9 trillion). The current U.S. Retirement market is valued at $24.1 trillion. When the U.S. broader markets finally crack, I forecast a 50% decline in the U.S. Retirement market in the first wave. This could take place over a few years. A 50% decline would put the U.S. Retirement market at $12 trillion, a little less than what it was in 2008.

This is highly likely as the markets have been propped up with a lot of leverage since 2009. A 50% decline in the stock and real estate prices will cause serious trouble to the entire U.S. economy and financial system.

…… THIS IS THE CRASH WE NEVER COME OUT OF.

U.S. Financial & Economic Market Suffered Two Big Blows

As I mentioned in the beginning of the article, ENERGY has been the key in pushing the U.S. debt to record levels. Now, you would think that the huge increase of domestic U.S. shale oil production would have helped stabilize the annual increase of U.S. debt….. IT DIDN’T. Actually, it did the opposite.

Unfortunately, the addition of U.S. shale oil production came at a huge cost. It only added more overall debt to the system. Even though the price of oil remained above $100 for three years, most of the shale oil companies made no real profit. Which means, the increase of U.S. domestic oil production from 5 mbd in 2008 to a peak of 9.6 mbd last year, did nothing to keep the U.S. debt from rising.

This was due to two reasons:

1) The U.S. Govt continued to print money while suffering even larger annual budget deficits to provide a standard of living for Americans that it really couldn’t afford.
2) The EROI- Energy Returned On Invested of U.S. shale oil production of 5/1 was way too low to sustain our modern economy that needs something north of 12/1.

While the situation for the United States became even worse as domestic oil production surged higher, the consequences will be even more dire as oil production plummets over the next several years.

Top Two Shale Oil Fields Suffer Hugh Production Losses

The top two shale oil fields in the U.S. suffered huge production losses over the past year… especially over the last six months.

The Bakken Oil Field in North Dakota was touted to make the U.S. energy independent. While the author of this article never believed the hype by the U.S. Energy Industry, many Americans fell for this delusion. As the price of oil declined on top of exceedingly high decline rates, Bakken oil production has dropped significantly.

How much??

If we go by the minimum production between August 2014 and December 2015, the Bakken is down 137,000 barrels per day (bd). While the Bakken achieved a much higher production peak, I am going by the minimum oil production achieved in that time-frame.

Thus, the Bakken will now lose 4.1 million barrels of oil in a month and 50 million barrels in a year compared to what it was producing last year. A loss of 50 million barrels in a year from the North Dakota industry is a BIG DEAL. That being said, the Bakken will continue to lose production going forward so the annual production loss will be even greater than 50 million barrels. At $50 a barrel, North Dakota is losing $2.5 billion a year.

NOTE: A small part of the Bakken is located in Montana, but this doesn’t really change the overall situation for North Dakota all that much.

Now, if you think the loss of production from the Bakken is bad, you need to take a look at the disaster taking place at the Eagle Ford Field in Texas:

The Eagle Ford has lost 300,000 barrels per day since its minimum production between Aug 2014 and Dec 2015. That’s one hell of a lot of oil. In Dec 2015, the Eagle Ford was producing 1,508 thousand barrels per day (1.508 mbd) and is forecasted to decline to 1,212 thousand barrels per day in June. This is a 20% decline in six months.

Thus, the Eagle Ford will now lose 9.1 million barrels of oil per month and a whopping 110 million barrels annually. Again, this is only if production stabilizes. That figure continues to increase as Eagle Ford production continues to decline.

While some individuals believe the decline in U.S. shale oil production was due to falling oil prices, this was only part of the reason. According to the energy analysts that I have been reading, these two shale oil fields were going to peak between 2015-2017, even with higher oil prices. So, yes… the low oil price forced the peak a little sooner than later.

What happens as U.S. shale oil production continues to decline?? Well, it puts more pressure on the U.S. energy sector that is saddled with debt up to their eyeballs. Here is a chart I published in one of my articles a few weeks back:

If the U.S. Energy sector is paying about 50% of its operating profits just to pay the interest on its debt (2015)… WHAT HAPPENS AS OIL PRODUCTION DECLINES?? Correct… it just makes a bad situation WORSE.

Americans have no clue the dire situation they face. No longer will we be able to offer U.S. Treasuries in the future for oil. Of course, this won’t end overnight, but the trend is not on our side.

The healthy U.S. economy and financial system in the 1950’s-1960’s was powered by its cheap domestic rising oil production. This is why we were the powerhouse of the world. However, as the years went by and domestic oil production declined as prices increased, we were forced to use the ENERGY CREDIT CARD.

While this worked for many decades, the ENERGY CREDIT CARD BALANCE now is unsustainable. The decline of U.S. shale oil production will speed up the demise of the U.S. economy and empire.

If Americans haven’t connected the DOTS by purchasing physical precious metals, the majority of their supposed wealth will EVAPORATE into thin air. Even though owning precious metals doesn’t guarantee an individual will make it through the coming economic and financial collapse unscathed, it will at least offer better options than 99% of the Americans out there.

Zerohedge

A sexually transmitted disease the world thought it eradicated is coming back at an alarming rate

• Olga Khazan and Russell Berman, The Atlantic

• Jul. 3, 2016, 9:54 AM
  
  

A poster from 1940 urging caution on the gentleman soldier.commons.wikimedia.org

In recent months, newspapers around the country have published stories that sound like they could have been written 100 years ago. Indiana’s syphilis cases skyrocketed by 70 percent in a single year. Texas’ Lubbock county was under a “syphilis alert.” Various counties faceshortages of the medication used to treat syphilitic pregnant women.

But the headlines are very much modern—and urgent. Syphilis is back, public-health experts say.

For many years, syphilis was considered a practically ancient ailment—a “Great Pox” that, like tuberculosis or polio, Americans just don’t get anymore. There were just 6,000 cases of primary and secondary syphilis in 2000, and the CDC briefly thought the disease’s total elimination was within reach.

But in November, the CDC reported that there were nearly 20,000 cases in 2014. While the rates haven’t climbed close to the devastating levels of the early 1990s, they’re rising at an alarming rate. Perhaps most concerning, the past two years have seen a cluster of cases of syphilis of the eye, and a rise in cases of congenital syphilis—something even developing countries have been able to eliminate .

This year, the U.S. Preventive Services Task Force recommended screening high-risk people for syphilis every three months. The disease is curable with antibiotics, but it’s a bit of a secret agent, transmissible through almost every sexual means and erupting as a tiny lesion about a month after exposure. At various stages of the infection, it might cause no symptoms or apuzzling array of them. If gone undiagnosed, it can cause everything from disfigurement to seizures.

As a result, “many people don’t know what syphilis is or how it’s transmitted,” said Darryl Richards, the STD coordinator in Decatur, Georgia, which has one of the highest syphilis ratesin the country. “Most people associate sexually transmitted infections with a discharge or a burning sensation. However, syphilis does not cause these symptoms.”

Among gay men, the syphilis infection rate has increased to levels not seen since the start of the AIDS epidemic of the 1980s. Some public-health experts we interviewed think the syphilis resurgence might be driven, in part, by the rise of hook-up apps such as Grindr. And with the AIDS crisis now a distant memory, gay men might not be as careful with condoms as they once were. Indeed, those factors help explain why syphilis rates have also spiked in parts of Canada and Europe.

The organism treponema palladium, which causes syphilis, is seen through an electron microscope, May 23, 1944. AP

But others say a big reason is federal and state governments’ failure to adequately fund local public-health budgets.

“This is a sentinel event—it is a failure of the healthcare system,” Gail Bolan, the CDC’s director of STD prevention, said at a recent Congressional briefing.

Many cities and counties have dedicated, low-cost STD clinics that are staffed by government health workers who specialize in sexually transmitted infections. They typically allow people to walk in without an appointment and offer many services for free. Each year, these clinics identify a fifth of all syphilis cases in women and a quarter of those in men, but they’ve been gutted by state, local, and federal budget cuts. The CDC, which helps fund local STD prevention efforts, has lost more than a billion dollars in its budget since 2005.

In 2012, more than half of all STD programs in the country saw budget cuts. Many of them reduced their hours and screening capacity as a result. Since 2008, local health departments shed nearly 44,000 jobs. Syphilis rates have risen more rapidly in states that have underfunded syphilis prevention efforts, according to the CDC. After a wave of clinic closuresin the past four years in New York, for example, 50,000 fewer people have visited the clinics for testing.

“Our public health infrastructure is at the point of breaking,” said Bill Smith, the executive director of the National Coalition of STD Directors. “Our mantra has been to ‘do more with less,’ but now we're doing less with less. The public's health is in danger.”

Congress is now debating the funding level for STD prevention grants in the fiscal year beginning October 1, and the prospects for an increase are not good, Smith said. Syphilis, gonorrhea, and chlamydia are all covered in one block of money sent to states and cities through the CDC, and that line item has remained flat, at around $157 million, for the last several years. In a letter to members of the Senate, Smith wrote that funding for STD prevention had dropped by $21 million since 2003, which he said represented a 40 percent loss in purchasing power for prevention programs.

A World War II-era poster advising syphilis sufferers to seek treatment. Wikimedia Commons

The Senate has proposed a $5 million cut in funding for STD prevention as part of the appropriations bill covering the CDC, while the National Coalition of STD Directors is seeking an $8.1 million increase. The funding probably won’t change at all until the spring of 2017, though, since Congress will likely pass only stopgap bills that maintain current levels of spending until the next president takes office. “The word we got back was that it’s a tough budget year and cuts need to be made,” Smith said.

That’s the same line he’s heard on Capitol Hill for the last half-decade of austerity budgets in Congress. In the first years of the Republican majority, lawmakers cited the newly-passed Affordable Care Act as an excuse not to increase sexual health budgets. If more people are gaining insurance and access to care, the reasoning went, why does Congress need to appropriate more money for STD prevention? According to advocates and public-health workers, the answer is that people still turn to publicly funded STD clinics for testing, rather than to family doctors, either because they are uninsured (as half of all STD clinic patients are) or out of embarrassment.

“It’s not the flu. It’s not ‘my wrist hurts,’” Smith explained. “That’s not something people are entirely comfortable sharing with their primary care provider.” And because syphilis was so rare for so long, Smith says many general practitioners miss clear signs of the disease that STD clinics are trained to notice.

Smith believes local health departments are short-changed financially because “sex is one of those third rails,” and STDs don’t have the newsy visibility of, say, Ebola or Zika. Few lawmakers—Democrats or Republicans—step up to be champions of STD prevention. While advocates no longer hear the moralizing from conservative lawmakers they might have encountered a generation ago, politicians are still leery of being the public face of syphilis, gonorrhea, or chlamydia.

Instead, the public face of syphilis, which in later stages can cause everythingfrom oozing wounds to disintegrated noses, might eventually belong to unsuspecting, low-income people.

Toxic algae bloom blankets Florida beaches, prompts state of emergency

By Mayra Cuevas

WATCH VIDEO | Algae outbreak ravaging Florida coast

(CNN)Jordan Schwartz, owner of the Ohana Surf Shop, said he wanted to cry when he saw the green slime -- a toxic algae bloom -- covering his swath of Stuart Beach on Florida's east coast.

"Animals are in distress, some are dying, the smell is horrible," he told CNN on Friday. "You have to wear a mask in the marina and the river. It's heartbreaking and there is no end in sight."

The economic impact is devastating, he said.

"This town is 100% driven by tourism but the tourism is empty," he said. "You go to the beach and it's the height of summer and we have empty beaches, empty restaurants, empty hotels."

Gov. Rick Scott,declared a state of emergency midweek in Martin, St. Lucie, Lee and Palm Beach counties because of the toxic algae bloom that originated in Lake Okeechobee and spread to the beaches.

Algae-covered water at Stuart's Central Marine boat docks.

The Army Corps of Engineers released nutrient-heavy water into the St. Lucie Estuary as part of their flood control measures, Corps spokesman John Campbell told CNN. The algae outbreak eventually reached the beaches.

To make matters worse, a massive algae bloom was already covering the lake. Following the emergency declaration, the Corps announced it would cut discharges by about a third beginning Friday.

"The algae outbreaks are triggered by fertilizer sewage and manure pollution that the state has failed to properly regulate. It's like adding miracle grow to the water and it triggers massive algae outbreaks," Earthjustice spokeswoman Alisa Coe told CNN.

Earthjustice, a nonprofit environmental law organization, has been fighting for tougher pollution limits in the state.

"We've seen this for years and years and instead of addressing the problem, here we are on the Fourth of July weekend with a state of emergency being declared," Coe said. "Usually folks would be out fishing, swimming and enjoying the beach with their families. Instead, they are left with water that is too toxic to touch."

Toxic blooms can affect the gastrointestinal system, liver, nervous system and skin, according to the Florida Department of Environmental Protection.

The hazardous water is costing Schwartz's family owned business about $10,000 a week. They even had to cancel their surf camp for kids, one of their main streams of income.

"We are afraid to put our kids or our camp teachers in the water," Schwartz said.

In a press release, Scott placed blame not on pollutants but on water storage limitations.

"Florida's waterways, wildlife and families have been severely impacted by the inaction and negligence of the federal government not making the needed repairs to the Herbert Hoover Dike and Florida can no longer afford to wait," Scott said.

Earthjustice's Coe said storage projects won't fix the real problem.

"The State wants to pretend the problem is only about water storage but it's also a pollution issue," Coe said. "In order to really get at the problem you got to clean up the water. Anyone whose been watching the state of regulation in Florida saw this coming."

Campbell agreed.

"The storage would help as would additional conveyance but it's a problem with both quantity and quality," he said.

While the Army Corps of Engineers must watch over water levels in the lake, it does not monitor water quality.

"The State of Florida is responsible," said Campbell, adding that the Corps knows it is releasing heavily polluted water into the estuary.

Part of the problem, Campbell explained, is that Lake Okeechobee's dike is susceptible to seepage and erosion and water levels are already at a 10- year high.

"The lake could rise another 5 feet during the wet season," said Campbell. "The Corps doesn't want the water to get too high in the interest of public safety."

For his part, Schwartz is hoping his business of 10 years will survive the state and federal back and forth.

"We are used to seeing our rivers continually being polluted year after year but we have never seen our beaches polluted. What we are witnessing right now, it's the tip of the iceberg," he said.

(CNN)

Iranian commander warns there are 100,000 missiles ready to strike Israel

PHILIPPINES: 30 ‘DRUG DEALERS’ EXECUTED IN DUTERTE’S FIRST FOUR DAYS AS PRESIDENT

Duterte is nicknamed The Punisher for his hardline views.