Already some financial analysts are saying that this global financial crisis is the worst since the 1930's Depression.
Some of the top forecasters are saying that things can only get worse from here.
So how are Americans responding? Given a shovel, Americans are choosing to dig deeper into debt faster than ever.
So what is really going on here?
Is this just a temporary financial downturn, or is something bigger at work here?
Take a really good look at the two charts posted below. The information in these charts is absolutely shocking. They show that the banking crisis that the Federal Reserve is currently trying to solve is much worse than we have been told in the media. The collapse of our financial system has begun.
The reserves of our local banks are gone. Just take a look at what has happened with IndyMac bank just recently. Our financial institutions have borrowed an insane amount of money from the Federal Reserve just to stay afloat. Our financial system has never experienced a crisis of this magnitude.
And the bad news is that it is just the beginning. Our greed has been our undoing, and things are about to become a lot worse.
For decades we have lived like kings and queens.....enjoying the biggest party the world has ever known.....but financed with ever increasing amounts of debt.
Now it looks like our debt party is almost over.
Once upon a time, the United States was the biggest creditor in the world. But those days are long gone. Now we are the biggest debtor nation to ever exist on the earth.
We were once the richest nation in the world, but that was not nearly enough for us. We always had to have a bigger car, a bigger house and an endless supply of "stuff". So our government piled up debt, our companies gorged on debt, and we made using credit cards into a national pastime.
Spending our own money wasn't even enough. We spent the money of our children, and of our grandchildren, and of their children, and now the national debt is more than 9 TRILLION dollars.....an amount that we will never be able to repay. And if you include the future liabilities that our government has committed us to such as future Social Security and Medicare payments, then the total is over 59 TRILLION dollars.
Now that many of our jobs have gone overseas, the price of gasoline is shooting through the roof, and people are losing their homes, do we find that Americans are learning their lesson?
Instead we are squeezing everything we can out of our plastic. Total credit card debt in America is now over 790 billion dollars, and it is increasing at a rate which is four times faster than earlier this decade.
Instead of showing restraint, we have jammed the accelerator to the floor.
And did you know that Americans actually have a NEGATIVE savings rate?
Do you know the last time when that happened?
The Great Depression of the 1930s.
Prices are increasing dramatically while wages are remaining flat or even decreasing. Jobs are being outsourced and factories are being closed at a staggering pace. Our largest banks and financial institutions are teetering on the brink of failure. Homes are being foreclosed at record rates. Personal bankruptcies recently hit an all-time high. And what is the answer the politicians give us? Wasting even more money and getting us into more debt.
We are reaping what we have sowed.
The Scriptures talk about those who would hoard wealth in the last days. Instead of feeding the poor and taking care of those who couldn't take care of themselves, we spent our money on mini-mansions, luxury SUVs and as much entertainment as we could possibly consume. Now we will pay the price just as the Scriptures say:
"Now listen, you rich people, weep and wail because of the misery that is coming upon you. Your wealth has rotted, and moths have eaten your clothes. Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. Look! The wages you failed to pay the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter."
No matter who is elected President in November, things are going to get worse financially. We all need to take a good, hard look at ourselves, and we need to really prepare for hard times ahead.