Great Fiscal Cliff of 2012-13
D. Weiss interviews Charles Goyette
by Charles Goyette: ‘Fiscal
Cliff’ … an Illusion or Reality?
A growing list
of authorities are now warning that one of the deadliest financial
crises in U.S. history is set to level the U.S. economy beginning
this coming New Year’s Day.
says that, barring a miracle in Washington, America will fall “head
first into the fiscal meat grinder.”
Chairman Ben Bernanke agrees, saying that paralysis in Washington
will cause America to plunge off the “fiscal cliff” on January 1,
Treasury Secretary Robert Rubin warns that the impact of the fiscal
cliff could be worse than the fallout from the 2008 financial crisis,
which resulted in the worst recession since the Great Depression.
to these insiders, this new crisis will vaporize millions more jobs
in every sector of the economy …
trillion out of the hands of U.S. consumers and companies …
of businesses …
the unemployment rate to unimaginable levels.
Are they right?
Is America’s economy only weeks away from one of the most traumatic
collapses in memory?
And if so,
how can you prepare?
In a very
timely online briefing last week, my team and I provided answers:
Fiscal Cliff of 2012-2013
Weiss: As you know, ours is the only firm that specifically
named well ahead of time nearly every major company
that failed in the last debt crisis. And as you also know, we have
been warning about a fiscal disaster for quite some time.
But now, two
important things have changed:
- This is
the first time high officials have added their dire warnings.
- It’s also
the first time that the nation is careening toward an immutable,
fixed deadline the Fiscal Cliff of January 1, 2013.
Now, let me
introduce you to a man who knows more about the Fiscal Cliff and
its consequences than anyone I have ever met.
He will issue
five forecasts on how these impending events will impact your income,
the economy, corporate profits, your stocks, your gold and silver
He will give
you a clear roadmap of the coming crisis to help you invest wisely
NOW so you can preserve your wealth and so you can even grow
the end of this briefing, he will NAME three Fiscal Cliff investments
to help you start immediately.
His name is
Charles Goyette, and I am pleased to welcome him here today as the
newest member of our Weiss Research team.
been an investment professional for over three decades since
He’s the author
of the New York Times bestselling book, The
Dollar Meltdown and he has recently released a new volume,
and Blue and Broke All Over.
the chairman of the prestigious Ludwig von Mises Institute, says:
Goyette has been a rare beacon of freedom and common sense.”
Barry Goldwater Jr. asks:
did a country as prosperous as ours get ‘broke all over’? Charles
Goyette makes a clear and compelling case that it is the result
of a change in American ideals.”
Ron Paul says:
… my friend Charles Goyette does a great job explaining why America
faces a looming financial crisis and outlines common sense strategies
for individuals to protect themselves and their families.”
The Von Mises Institute! Goldwater! Ron Paul! Those are some big
names singing your praise!
Goyette: Thank you!
Until recently, you were among a tiny handful of observers warning
about a fiscal disaster.
And now, here
we are, months later, and look who’s adding their voices: Fed Chairman
Bernanke, JPMorgan, Former Treasury Secretaries and other credible
sources saying these incredible things. Is it as bad as they say?
No. It’s worse because it’s the culmination of MANY years of Washington’s
gross mismanagement of the economy. America will have no choice
but to pay the piper, to suffer the consequences, to have its own
financial judgment day.
is based on my own research and that of Safe Money Report
editor Mike Larson. We looked at the “heads up” you gave us of your
questions. Then we worked together to provide our answers.
I am presenting our joint conclusions from my perspective. Then,
he’s going to do the same from his perspective as well.
I like that team approach! But tell me what’s unique about the fiscal
crisis right now.
What’s unique now is that, unlike past brushes with disaster, we
know precisely when this financial apocalypse is scheduled to begin:
At one second after midnight, this coming New Year’s Day.
also very unique is that it’s coming at a time when the stock market
is near the HIGH end of its big up-and-down gyrations of the last
A lot of investors seem to think that’s a good thing.
But it’s precisely the opposite of what they think. It signals overvaluations.
It signals extreme complacency among investors, and extreme VULNERABILITY
to the looming fiscal crisis.
All this could
not be happening at a worse time for the U.S. economy.
Let me show
you how and why based on my own research and also based on
Mike Larson’s Safe Money Report.
Look at the
median wealth of U.S. families! Over the past five years, it has
plunged more than 30%.
And look at
how many families are still under water on their mortgages! Nearly
a third! Instead of a great retirement asset, our homes have become
The official unemployment rate remains stubbornly above 8%. It’s
been there ever since February 2009, the longest stretch in the
64 years that the government has been keeping track!
And that’s just the official unemployment.
Correct. The real unemployment rate – including all underemployed
and discouraged workers is nearly three times higher: A staggering
22.9% and rising, according to Shadow
Inside the Beltway, some politicians may get away with calling 22.9%
unemployment “a recovery.” But to the 12.8 million jobless Americans
who wonder where their next meal is coming from, this is a flat-out
Plus, among the jobless, a whopping 29.5% are now out of work for
more than a year, the worst in history. That’s 3.9 million Americans
in near-permanent limbo more than the total population of
Chicago and San Francisco combined.
This is why
America’s middle class is shrinking rapidly.
43.6 million Americans, many formerly from the middle class, are
now living in poverty more than at any time since the government
began keeping records.
of U.S. household income now comes from government assistance of
A record one
in every seven Americans is now living on food stamps.
It boggles the imagination. And what’s most ironic is that they
call this a “recovery.” Why do you think things have turned so sour?
Primarily because of debt and the dramatic changes that society
must make to adapt to the huge debt burdens.
But we owe
our huge debt burden to …
The red and
blue wings of the Washington political party …
AND the Democrats …
AND the Tweedledumbers of deficit spending!
buried us under the largest mountain of debt in world history.
You blame them both.
It’s not me it’s the facts! When George W. Bush came into
office, the federal debt ceiling was less than $6 trillion. When
he left office, it was nearly double that over $11 trillion.
Bush presided over seven increases in the debt ceiling and added
$5 trillion to the national debt after eight years in office, Obama
has presided over five increases and added more than $5 trillion
in debt in just three years in office.
federal debt of nearly $16 trillion works out to $211,000 for a
family of four.
Add in obligations
for Social Security, Medicare and veterans, and you have a total
government debt of $120 trillion!
And you believe even that number could be greatly understated.
Yes. Boston University economist Laurence Kotlikoff, a former senior
economist with Reagan’s Council of Economic Advisers, demonstrates
that the debt is much larger. He shows how Washington’s total debts
and obligations are now $222 trillion. That’s about $2.8 MILLION
for every family of four in the nation.
And now, with
the fiscal cliff, THREE FISCAL TIME BOMBS are set to explode on
New Year’s Day each of which has the power to wipe out what’s
left of our so-called economic recovery:
Cliff Time Bomb #1:
The Budget Control Act of 2011.
summer of 2011: Washington was dead broke; out of money.
was done and done quickly the United States of America,
the most powerful nation on Earth, would have had no choice but
to default on its debts for the first time in history.
Standard & Poor’s revoked Washington’s triple-A credit rating.
why, at the last moment, Congress reached a makeshift compromise
The Budget Control Act of 2011.
That new law
raised the debt limit by $2.1 trillion enough to keep the
government from collapsing until the end of 2012. But in return,
it imposed spending caps that will slash spending by $109 billion
per year for nine years, beginning on January 1, 2013.
Run through those for us.
Defense $54.7 billion in cuts
Human Services plus other discretionary program $38.6 billion
other entitlements $16.2 billion.
billion pulled out of the economy and out of people’s pockets, starting
this coming New Year’s Day and every year thereafter.
to a recent university study, these and other cuts will destroy
more than two million jobs throughout the economy.
The hardest hit sector?
The U.S. defense industry! A whopping 49.9% of the cuts will come
out of America’s military budget.
In fact, in
preparation for these cuts, thousands of military personnel are
already being let go and being added to unemployment rolls.
My father, who was a Wall Street analyst in the late 1920s, not
only lived through the Great Depression but actually predicted it.
And if he
were here today he’d be dumbfounded. Because after the Great Depression,
it was thanks to massive increases in defense spending,
for World War II, that the unemployment rate finally dropped.
around, it seems the government is doing just the opposite. The
real unemployment rate is over 20%, and Washington is cutting
defense spending laying off civilian and military personnel.
out for our viewers how this impacts everyday Americans?
If you or a family member has a job with the government or the defense
industry, that job’s at risk.
Lockheed Martin has warned that most of its 100,000-plus workforce
is at risk of being laid off. Other defense companies say they’re
set to send layoff notices to “hundreds of thousands” of employees
this coming November.
Plus, if you
have family members or friends working in an area that benefit from
government or military spending construction, manufacturing,
retail sales and many others they could also find themselves
without a paycheck.
And of course,
millions of investors own defense stocks Lockheed Martin,
Northrop Grumman, General Dynamics, and others that are likely
to fall sharply due to these cuts.
Before the actual fiscal cliff deadline, or after?
Well before the deadline. Smart investors don’t wait. They sell
in advance of the deadline.
Right now, Congress is sharply divided and deadlocked, especially
during the presidential election campaign. But many investors are
hoping that, between the election and year-end, they could reach
a compromise to cancel all these spending cuts.
That is possible. But even if some of these spending cuts are delayed,
many experts are warning that there’s another, larger blow to the
U.S. economy hitting on New Year’s Day. I’m talking about …
Cliff Time Bomb #2:
It’s a $440
billion tax hike on the entire Middle Class … on every wealthy American
… on retirees … on every employer in the nation, and on YOU!
The Washington Post calls it “Taxmageddon”: Tax cuts in
seven different categories are scheduled to expire.
Please tell our viewers how that impacts them.
Right off the bat, your basic income tax rate the percentage
of your money that goes directly to Washington – will rise significantly.
- If you have
kids at home, your tax credit for each child will be cut in half
- If you have
long-term investment profits, your maximum tax rate will be raised
by a third …
- If your
investments earn dividends, the tax on those dividends could more
than double …
- If you
own a business, the deductions you get for investing in that business
will be dramatically slashed …
- Many of
your personal exemptions and itemized deductions will be cancelled,
including tax deductions for married couples.
Make no mistake:
If these tax increases go forward, it will NOT be just a tax hike
on the rich. It will be the one of the largest tax increases in
history on nearly EVERY American company and family.
to the nonpartisan Tax Policy Center, a whopping 96% of all middle
income earners will see their taxes rise an average of $1,800 per
If the so-called “recovery” were robust, maybe we could survive
Exactly. But the recovery is fragile, probably more so than in any
recovery in over 100 years. That’s why so many experts are saying
these tax hikes alone could cause massive damage.
And even if
Congress is able to come together and delay some of these tax increases
in the nick of time, Americans will have to start paying the equivalent
of five NEW taxes under Obamacare on January 1.
the rest of the article
© 2012 Charles Goyette
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