BREAKING – Major Employer Takes Stand Against Anti-Trump California, LEAVES State
California has led the way in the attacks against Trump, with several of its representatives openly defying the president… and major companies are starting to take notice.
After several other companies already left the state, Nestle USA has announced it is packing its bags and moving its headquarters and roughly 1,200 jobs across the country to Rosslyn, Virginia, via Investors.
This means more jobs are leaving an already fiscally challenged state, and there will likely be many more.
Big business is finally realizing California is not exactly business-friendly.
Two of the last three governors of the state are Democrats, and now the state is paying the price for liberal rule, especially under Governor Jerry Brown.
He has openly supported the far-left policies supporting illegal immigrants and refugees, and it is costing the state big time.
Even with all of its glitz and glamour, the state has a long history of struggling financially, and many experts blame the tax system Brown is using.
Christopher Thornberg, the founding partner of Beacon Economics, stated, “We have an enormous budget problem, and that’s because of the structure of our revenue system, not because of the fundamentals of the California economy,” via CNBC.
Add the mismanagement of the budget with the cost of supporting illegals and refugees, and you have a recipe for disaster. The money has to come from somewhere, and it does in the form of some of the highest taxes in the country, with more increases expected.
The result of this is businesses closing their doors in California and moving to greener pastures even if they have to go all the way across the country to do it. California’s loss, however, has been a boom for states like Texas, Arkansas, and Virginia, which offer much friendlier financial benefits for business owners.
If you look across the map, with few exceptions, blue states are not exactly booming these days. We can expect to see a lot more business defections in the coming months, especially if these Democrats continue to take hardline stances against Trump.
This, of course, bodes well for Trump and the Republicans as liberal business owners will be forced to realize their bottom line is being affected by the horrible mismanagement of their chosen representatives.
When they see how businesses in red states are booming and what Trump does for the economy overall, I think we will see more defections not only in businesses moving, but also in people leaving the Democrat party and going to a party that actually looks after their well-being rather than that of people who should not even be in this country.
Thank You Kent Lamberson
The US government now has less cash than Google
March 13, 2017
Sovereign Valley Farm, Chile
In the year 1517, one of the most important innovations in financial history was invented in Amsterdam: the government bond.
It was a pretty revolutionary concept.
Governments had been borrowing money for thousands of years… quite often at the point of a sword.
Italian city-states like Venice and Florence had been famously demanding “forced loans” from their wealthy citizens for centuries.
But the Dutch figured out how to turn government loans into an “investment”.
It caught on slowly. But eventually government bonds became an extremely popular asset class.
Secondary markets developed where people who owned bonds could sell them to other investors.
Even simple coffee shops turned into financial exchanges where investors and traders would buy and sell bonds.
In time, the government realized that its creditworthiness was paramount, and the Dutch developed a reputation as being a rock-solid bet.
This practice caught on across the world. International markets developed.
English investors bought French bonds. French investors bought Dutch bonds. Dutch investors bought American bonds.
(By 1803, Dutch investors owned a full 25% of US federal debt. By comparison, the Chinese own about 5.5% of US debt today.)
Throughout it all, debt levels kept rising.
The Dutch government used government bonds to live beyond its means, borrowing money to fund everything imaginable– wars, infrastructure, and ballooning deficits.
But people kept buying the bonds, convinced that the Dutch government will never default.
Everyone was brainwashed; the mere suggestion that the Dutch government would default was tantamount to blasphemy.
It didn’t matter that the debt level was so high that by the early 1800s the Dutch government was spending 68% of tax revenue just to service the debt.
Well, in 1814 the impossible happened: the Dutch government defaulted.
And the effects were devastating.
In their excellent book The First Modern Economy, financial historians Jan De Vries and Ad Van der Woude estimate that the Dutch government default wiped out between 1/3 and 1/2 of the country’s wealth.
That, of course, is just one example.
History is full of events that people thought were impossible. And yet they happened.
Looking back, they always seem so obvious.
Duh. The Dutch were spending 68% of their tax revenue just to service the debt. Of course they were going to default.
But at the time, there was always some prevailing social influence… some wisdom from the “experts” that made otherwise rational people believe in ridiculous fantasies.
Today is no different; we have our own experts who peddle ridiculous (and dangerous) fantasies.
Case in point: this week, yet another debt ceiling debacle will unfold in the Land of the Free.
You may recall the major debt ceiling crisis in 2011; the US federal government almost shut down when the debt ceiling was nearly breached.
Then it happened again in 2013, at which point the government actually DID shut down.
Then it happened again in 2015, when Congress and President Obama agreed to temporarily suspend the debt ceiling, which at the time was $18.1 trillion.
That suspension ends this week, at which point a debt ceiling of $20.1 trillion will kick in.
There’s just one problem: the US government is already about to breach that new debt limit.
The national debt in the Land of the Free now stands at just a hair under $20 trillion.
In fact the government has been extremely careful to keep the debt below $20 trillion in anticipation of another debt ceiling fiasco.
One way they’ve done that is by burning through cash.
At the start of this calendar year in January, the federal government’s cash balance was nearly $400 billion.
On the day of Donald Trump’s inauguration, the government’s cash balance was $384 billion.
Today the US government’s cash balance is just $34.0 billion.
(Google has twice as much money, with cash reserves exceeding $75 billion.)
This isn’t about Trump. Or even Obama. Or any other individual.
It’s about the inevitability that goes hand in hand with decades of bad choices that have taken place within the institution of government itself.
Public spending is now so indulgent that the government’s net loss exceeded $1 trillion in fiscal year 2016, according to the Treasury Department’s own numbers.
That’s extraordinary, especially considering that there was no major war, recession, financial crisis, or even substantial infrastructure project.
Basically, business as usual means that the government will lose $1 trillion annually.
Moreover, the national debt increased by 8.2% in fiscal year 2016 ($1.4 trillion), while the US economy expanded by just 1.6%, according to the US Department of Commerce.
Now they have plans to borrow even more money to fund multi-trillion dollar infrastructure projects.
Then there’s the multi-trillion dollar bailouts of the various Social Security and Medicare trust funds.
And none of this takes into consideration the possibility of a recession, trade war, shooting war, or any other contingency.
This isn’t a political problem. It’s an arithmetic problem. And the math just doesn’t add up.
The only question is whether the government outright defaults on its creditors, defaults on promises to its citizens, or defaults on the solemn obligation to maintain a stable currency.
But of course, just like two centuries ago with the Dutch, the mere suggestion that the US government may default is tantamount to blasphemy.
Our modern “experts” tell us that the US government will always pay and that a debt default is impossible.
Well, we’re living in a world where the “impossible” keeps happening.
So it’s hard to imagine anyone will be worse off seeking a modicum of sanity… and safety.
Do you have a Plan B?
Believe it or not, for every minute that goes by, our federal government’s financial sinkhole grows deeper by about $10 million! The U.S. public needs to know the current and future issues concerning the U.S.’s finances.
Nine years later, Greece is still in a debt crisis…
March 22, 2017
Sometimes you have to marvel at the absurdity of the financial universe in which we live.
On one side of the Atlantic, we have the United States of America, which triggered yet another debt ceiling disaster last Thursday when the US government’s maximum allowable debt reset to just over $20 trillion.
Of course, the US national debt is pretty much already at $20 trillion.
(That’s roughly $166,000 per taxpayer in the Land of the Free.)
This means that Uncle Sam is legally prohibited from ‘officially’ borrowing any more money.
But far be it from the US government to start living within its means. Sacrilege!
These guys have zero chance of making ends meet without going into debt.
Just last year, according to the government’s own financial report, their annual net loss totaled $1 TRILLION, and the national debt increased by $1.4 trillion.
And that was in a relatively stable year. There was no major war or financial crisis to fight. It was just business as usual.
This year isn’t going to be any different.
So, cut off from their normal debt supply (the bond market), the Treasury Department is resorting to what they call “extraordinary measures.”
They’re basically pillaging government employee retirement funds, and will continue to do so until Congress raises the debt ceiling.
It’s a repeat of what happened in 2015. And 2013. And 2011.
Pretty amazing to consider that the “richest” country in the world has to plunder retirement funds in order to keep the lights on.
Former US Treasury Secretary Larry Summers said it perfectly when he quipped “How long can the world’s biggest borrower remain the world’s biggest power?”
Then, of course, on the other side of the Atlantic, we have Greece, which is now in its NINTH YEAR of a major debt crisis.
Greece has had nine different governments since 2009. At least thirteen austerity measures. Multiple bailouts. Severe capital controls. And a full-out debt restructuring in which creditors accepted a 50% loss.
Yet despite all these measures GREECE IS STILL IN A DEBT CRISIS.
Right now, in fact, Greece is careening towards another major chapter in its never-ending debt drama.
Just like the United States, the Greek government is set to run out of money (yet again) in a few months and is in need of a fresh bailout from the IMF and EU.
(The EU is code for “Germany”…)
Without another bailout, Greece will go bust in July– this is basic arithmetic, not some wild theory.
And this matters.
If Greece defaults, everyone dumb enough to have loaned them money will take a BIG hit.
This includes a multitude of banks across Germany, Austria, France, and the rest of Europe.
Many of those banks already have extremely low levels of capital and simply cannot afford a major loss.
(Last year, for example, the IMF specifically singled out Germany’s Deutsche Bank as being the top contributor to systemic risk in the global financial system.)
So a Greek default poses as major risk to a number of those banks.
More importantly, due to the interconnectedness of the financial system, a Greek default poses a major risk to anyone with exposure to those banks.
Think about it like this: if Greece defaults and Bank A goes down, then Bank A will no longer be able to meet its obligations to Bank B. Bank B will suffer a loss as well.
A single event can set off a chain reaction, what’s called ‘contagion’ in finance.
And it’s possible that Greece could be that event.
This is what European officials have been so desperate to prevent for the last nine years, and why they’ve always come to the rescue with a bailout.
It has nothing to do with community or generosity. They’re hopelessly trying to prevent another 2008-style meltdown of the financial system.
But their measures have limits.
How much longer do Greek citizens accept being vassals of Germany, suffering through debilitating capital controls and austerity measures?
How much longer do German taxpayers continue forking over their hard-earned wages to bail out Greek retirees?
After all, they’ve spent nine years trying to ‘fix’ Greece, and the situation has only become worse.
For a continent that has been at war with itself for 10 centuries and only managed to play nice for the last 30 or so years, it’s foolish to expect these bailouts to last forever.
And whether it’s this July or some date in the future, Greece could end up being the catalyst which sets off a chain reaction on both sides of the Atlantic.
Do you have a Plan B?
How the China Shock, Deep and Swift, Spurred the Rise of Trump
Many assumed the U.S. would withstand the import threat as it had with Japan, Mexico; devastation in Hickory, N.C.By Bob Davis and Jon Hilsenrath
HICKORY, N.C.—In the late 1990s, this furniture-making hub seemed sheltered from the disruptive forces of globalization. Laid-off steelworkers from West Virginia, Tennessee and beyond streamed here for new jobs building beds, tables and chairs for American homes. The unemployment rate fell below 2%.
These days, Hickory is still suffering from a series of economic shocks, none more powerful than China’s rise as an export power. The invasion of imported furniture drove factories out of business, erased thousands of jobs and helped drive unemployment above 15% in 2010.
Stuart Shoun, 59 years old, has been laid off three times since 1999. After one layoff, the Hickory machinist studied architecture at a community college but then couldn’t find a job and returned to the furniture industry. He makes $45,000 a year, the same as he did nearly 20 years ago and $14,000 a year poorer after adjusting for inflation.
Hickory, N.C., is still suffering from the aftershocks of Chinese imports. Donald Trump has tapped into potent anti-free-trade sentiment on the campaign trail. Video: Madeline Marshall/WSJ. Photo: Mike Belleme for The Wall Street JournalMr. Shoun ’s son, Steven, a trained furniture upholsterer, manages a junkyard and discourages his own son, now in college, from working in the industry that gave North Carolina the nickname “Furniture Capital of the World.” Steven Shoun says he blames “the people who run our country and who run our companies” for Hickory’s economic turmoil.
Mr. Shoun and his father say they favor Donald Trump for president, even though they don’t plan to vote. “I don’t think one vote will make any difference,” says Stuart Shoun.
When import booms from Japan, Mexico and Asian “tiger” economies such as Taiwan arrived in the U.S., many cities and towns were able to adapt.
China was different. Its emergence as a trade powerhouse rattled the American economy more violently than economists and policy makers anticipated at the time or realized for years later. The U.S. workforce adapted more slowly than expected.
What happened with Chinese imports is an example of how much of the conventional wisdom about economics that held sway in the late 1990s, including the role of trade, technology and central banking, has since slowly unraveled.
The aftershocks are sowing deep-seated political discontent this election year. Disillusionment with globalization has fed one of the most unconventional political seasons in modern history, with Bernie Sanders and especially Donald Trump tapping into potent anti-free-trade sentiment.
Both presidential candidates aimed much of their criticism at 1994’s North American Free Trade Agreement, which boosted imports from Mexico. Even then, though, the real culprit was China, economists now say.
Many U.S. factories that moved to Mexico did so to match prices from China. Some of the new Mexican factories helped support U.S. jobs. For example, fabrics made in the U.S. are turned into clothing in Mexico for sale globally by U.S. companies.
David Autor, a Massachusetts Institute of Technology economist who has studied trade, labor markets and technological change, calls China’s economy a “500-ton boulder perched on a ledge.” At some point, it would tumble and splatter what was below, but “you just didn’t know when,” he says.
Century survived the invasion of Chinese imports by focusing its U.S. production on made-to-order furniture. PHOTOS: MIKE BELLEME FOR THE WALL STREET JOURNALEconomists have long argued that while free trade creates winners and losers, the net results are beneficial. Americans gained from inexpensive imports and filled their homes with low-price bicycles, jewelry and kitchenware. U.S. companies won access to overseas markets.
Workers in industries exposed to imports were expected to upgrade their job skills or move somewhere offering fresh opportunities.
Japan’s invasion in the 1970s largely hit industries in cities with broad manufacturing bases on which to fall back. In Akron, Ohio, long the center of the U.S. tire industry, chemists trained at the University of Akron helped create a local polymer industry that employs tens of thousands of workers, said David Lieberth, a former Akron deputy mayor who chronicles the city’s history.
China upended many of those assumptions. No other country came close to its combination of a vast working-age population, super-low wages, government support, cheap currency and productivity gains.
Imports from China as a percentage of U.S. economic output doubled within four years of China joining the World Trade Organization in 2001. Mexico took 12 years to do the same thing after Nafta. Japan took just as long after becoming a major U.S. supplier in 1974.
By last year, imports from China equaled 2.7% of U.S. gross domestic product, a percentage point larger than Japan or Mexico ever won.
Japan’s import wave also challenged a limited group of advanced manufacturing industries, largely autos, steel and consumer electronics. China’s low-cost imports swept the entire U.S., squeezing producers of electronics in San Jose, Calif., sporting goods in Orange County, Calif., jewelry in Providence, R.I., shoes in West Plains, Mo., toys in Murray, Ky., and lounge chairs in Tupelo, Miss., among many other industries and communities.
The Economic Collapse: Are You Prepared For The Coming Economic Collapse And The Next Great Depression?