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It is no longer about living the American dream, living within your means and enjoying your “golden years”.  No, it is now about “keeping what you have” or just plain outright survival.

Earlier this week, Bill Holter wrote these prophetic words, describing EXACTLY what the “average American” faces – care of SURGING unemployment,

…SUFFOCATING inflation…

…SOARING debt…

…a TERMINAL real estate market…

…and NON-EXISTENT interest rates…

I then came across an excellent article by Ron Hera, concisely discussing the demise of the U.S. since – NOT coincidentally – the 1971 abandonment of the global gold standard.  Not everyone will be sucked into the aforementioned vortex; however, those that don’t will succumb to the inevitable hyperinflation – be it in 2012, 2013, or beyond…

The Grinch that Stole the American Dream – Ron Hera, August 9, 2012

A majority of Americans believe that if they work hard and make prudent financial decisions, they can get ahead and eventually own their own home, enjoy a good standard of living and one day achieve financial security.  For a long time, the American dream was achievable, at least in principle, for a majority of Americans.  But is the American dream still attainable for a majority of Americans?  If not, what went wrong?

Setting aside the fact that the real unemployment level is approximately 23%, the majority of the dwindling surpluses produced by American citizens are already spoken for.  Thus, the vast majority of Americans certainly cannot achieve the American dream.

For an affluent society, where the chant “U-S-A, U-S-A, U-S-A…” is often heard, the facts are shocking.  Approximately 49 million Americans live in poverty and 1/3 of Americans are “one paycheck away from homelessness.”  According to the U.S. Department of Health and Human Services (HHS), 100 million households have incomes between 1 and 2 times the poverty level.  And Americans are becoming poorer.  Real wages, adjusted for the rising cost of living, have remained flat or have declined for nearly 40 years.  Median household income has fallen for more than 10 years and the net worth of American families has fallen nearly 40% in the past 5 years alone.

Roughly 2/3 of Americans “own” their own home, which is a high percentage of home ownership, but, in reality, banks own more than $10 trillion worth of American homes.  Ignoring the fact that the American dream is already out of reach for the poorest 1/3 of Americans, about 1/3 of homeowners are currently “under water” and the majority of American homeowners would be wiped out financially if their income were disrupted.  The basic problem is that consumer debt in the United States has increased more than 300% in the past 20 years.

The extreme level of debt in the U.S. economy points to increased economic fragility.  Despite the appearance of affluence, the majority of Americans are running ever faster on a hamster wheel of debt service, desperately trying to stay one step ahead of bankruptcy or foreclosure.  In other words, pursuing the American dream has become a high stakes game where a few will win but the majority will lose.  But, just like in Las Vegas, the house always wins.

Promoting the American dream, as if it were a trip to Disney World that an average family can one day afford, is a fraud.  Fraud is an intentional misrepresentation of the facts made by one person to another with knowledge of its falsity for the purpose of inducing the other person to act, e.g., to borrow money that can never be repaid.  The idea that a majority of American families can finance their homes, enjoy a high standard of living and still achieve financial security is false.  Cui bono?  Banks cash in, municipalities collect property taxes and, when real estate is sold, capital gains taxes are generated.

Of course, homeowners can profit through asset price appreciation, but only if prices are rising.  Technically, the economy grows as a function of asset price appreciation (and the corresponding expansion of the money supply) but, although they are marketed as investments and as a path to financial security, homes are merely long-lived consumer goods.  Increased consumption boosts the economy but it does not represent a real increase in the wealth of society.  Wealth is the result of a surplus derived from excess production.  Excess consumption, on the other hand, leaves nothing but a pile of debt when the proverbial party is over.

Asset price appreciation induced by monetary inflation, i.e., debt expansion, became the engine of the U.S. economy under the policies of former Federal Reserve Chairman Alan Greenspan.  Greenspan’s fraud encouraged consumption funded by debt, which, at the time, served to justify outsourcing and globalization.  In 2008, the party ended.  U.S. manufacturing was gutted and the companies that profited had moved on to greener pastures in other countries.  The dot-com bubble and the housing bubble wrecked the U.S. economy leaving mountains of debt behind.  The average American family was left running on a hamster wheel chasing the shadow of the once great American dream.  Wages, income and household wealth all declined while poverty and unemployment skyrocketed.

The majority of Americans have yet to understand that there is no way to get off of the hamster wheel.  The debt will never be repaid.  All of the wealth they will generate in their lifetimes has already been consumed, along with that of their children and grandchildren, in the name of quarterly profits and globalization.  No matter how hard they work, the wealth they create will be transferred to the government and to banks through debt service, taxes and government deficit spending, and through debt monetization (“money printing”) by the Federal Reserve.

Economist John Maynard Keynes once wrote: “The ideas of economists and political philosophers … are more powerful than is commonly understood.  Indeed the world is ruled by little else.  Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”  Just as Keynes suggested, Americans have been sold into debt servitude for the benefit of a few large, multinational banks and corporations.  Greenspan’s fraud facilitated the greatest heist in the history of the world: the theft of American dream.

Look long and hard at the FACTS presented in this RANT, and decide for yourself is there is any  hope of an alternate outcome.  If you are unbiased, you’ll realize there is NONE.  The U.S. economy – and all those tied to it – are doomed to repeat the collapses of history’s flawed empires; replete with poverty, social unrest, and draconian government decree.

In essence, the LIES underpinning the PROPAGANDA of the “American Dream” have been exposed, creating – for the foreseeable future – the “AMERICAN NIGHTMARE.”


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