Global Debt Time Bomb explodes soon

[phil_in_cs]

I don't know about "best looking". The Swiss are yielding negative interest rates which is pretty creepy. Chinese currency would look good but how can you trust a currency that is completely controlled by a government that was communist less than 15 years ago and still far from free?

I don't see how their type of government directly bears into the discussion.

That is because you don't understand how the world currency market works. Investors will not buy into a market when the government is manipulating the currency or the government is unstable.

The govt manipulates the exchange rate to hold the currency low, keeping their exports cheap. That sort of thing makes external investment in the currency risky.

[Pilsung]

http://theautomaticearth.com/Finance/35 ... alone.html

The tragic human cost of Greece's socioeconomic crisis: rising suicides among dispairing and destitute working and middle class people who can no longer bear their daily struggle for existence.

[phil_in_cs]

Relevent to us: if the crisis lasts long enough your preps run out....
http://www.bloomberg.com/news/2012-08-1 ... isery.html

Gold Runs Out In Lisbon As Price Drop Compounds Money Misery
Paulo Oliveira and his wife sold their wedding rings to pay the rent after he lost his job as a builder last month. They were the couple’s last pieces of jewelry.
Portugal’s gold exports increased more than five-fold to 519.4 million euros last year from 102.1 million euros in 2009, according to data published on the Lisbon-based National Statistics Institute’s website. Photographer: Mario Proenca/Bloomberg
“We have no more gold to save us from being kicked out this month,” the 46-year-old said as he stood in the area of downtown Lisbon popular with cash-for-gold stores. “Everyone I know is struggling, even the gold stores are empty because nobody has any more gold left to sell.”
Oliveira encapsulates a growing trend in debt crisis- stricken Europe as household gold supplies dry up after record prices and a deepening recession prompted a proliferation of places to exchange the metal for money.

[Pilsung]

Dissembling statistics on unemployment and other true economic measures are futile attempts to conceal the true extent of our deepening economic crisis.

http://crediblyconnect.blogspot.com/201 ... etter.html

My grandmother grew up in the backwoods of Arkansas. She got 4th grade education, worked in the fields, and when she was 12 years old threw down her cotton sack and took a train to Texas to live with an aunt she had never met. She lived a hard life, never had much of a chance, and yet she was one of the wisest people I have ever known.

She taught me many life lessons that have served me well, one of which went like this: "Jimmy," she would say as she waved her finger in my face, "most folks will lie even when the truth works better."

Not a particularly rosy view of humanity, but it was, and is, deadly accurate.

Nowhere is her admonition better seen than when man is collectivized and given authority. Whether government, corporate or union, the simple fact is that most people are liars, liars lie, good liars rise to the top, and when good liars are collectivized they lie more frequently and more effectively. When they have control of the numbers, it makes their deceit more difficult to discover. When they can make up the numbers, it can unwinding them a near impossibility.

Take the recent unemployment numbers that took the U.S. stock market to fresh 3-month highs. According to the U.S. Department of Labor, 163,000 new jobs were created in July, 2012.

Sounds good enough, but like most numbers, even if it is accurate, which it is not, it creates an intended deceit.

Looking at the Bureau of Labor Statistics own tables reveals the following startling fact: The U.S. actually lost 1,204,000 jobs in the month of July, 2012.

Don't believe it? Take a look at the actual unadjusted data from the Bureau of Labor Statistics. http://www.bls.gov/opub/ee/2012/ces/table1b_201207.pdf

During July, 2012, the private sector added a net 27,000 jobs which represented an added 76,000 goods producing jobs less 49,000 jobs lost in the service sector. The other million plus were lost in the public sector.

[SeerSavant]

Not a particularly rosy view of humanity, but it was, and is, deadly accurate.

Ain't that the sad damning fact...

[TacAir]

Dissembling statistics on unemployment and other true economic measures are futile attempts to conceal the true extent of our deepening economic crisis.

http://crediblyconnect.blogspot.com/201 ... etter.html

My grandmother grew up in the backwoods of Arkansas. She got 4th grade education, worked in the fields, and when she was 12 years old threw down her cotton sack and took a train to Texas to live with an aunt she had never met. She lived a hard life, never had much of a chance, and yet she was one of the wisest people I have ever known.

She taught me many life lessons that have served me well, one of which went like this: "Jimmy," she would say as she waved her finger in my face, "most folks will lie even when the truth works better."

Not a particularly rosy view of humanity, but it was, and is, deadly accurate.

Nowhere is her admonition better seen than when man is collectivized and given authority. Whether government, corporate or union, the simple fact is that most people are liars, liars lie, good liars rise to the top, and when good liars are collectivized they lie more frequently and more effectively. When they have control of the numbers, it makes their deceit more difficult to discover. When they can make up the numbers, it can unwinding them a near impossibility.

Take the recent unemployment numbers that took the U.S. stock market to fresh 3-month highs. According to the U.S. Department of Labor, 163,000 new jobs were created in July, 2012.

Sounds good enough, but like most numbers, even if it is accurate, which it is not, it creates an intended deceit.

Looking at the Bureau of Labor Statistics own tables reveals the following startling fact: The U.S. actually lost 1,204,000 jobs in the month of July, 2012.

Don't believe it? Take a look at the actual unadjusted data from the Bureau of Labor Statistics. http://www.bls.gov/opub/ee/2012/ces/table1b_201207.pdf

During July, 2012, the private sector added a net 27,000 jobs which represented an added 76,000 goods producing jobs less 49,000 jobs lost in the service sector. The other million plus were lost in the public sector.

Key words - Public Sector. Most school districts layoff all or most all of their employees in May/June so in July they show up in the stats -- those numbers are not a surprise - that's part of the adjustment made in the "seasonally adjusted number" - number.

The unemployment numbers are still high. So-called "Structural unemployment" (an interesting topic by itself) is being reported at double digit rates. (more background here)

The ShadowStats unemployment numbers are troubling, to say the least.

[TacAir]

Relevent to us: if the crisis lasts long enough your preps run out....
http://www.bloomberg.com/news/2012-08-1 ... isery.html

Gold Runs Out In Lisbon As Price Drop Compounds Money Misery
Paulo Oliveira and his wife sold their wedding rings to pay the rent after he lost his job as a builder last month. They were the couple’s last pieces of jewelry.
Portugal’s gold exports increased more than five-fold to 519.4 million euros last year from 102.1 million euros in 2009, according to data published on the Lisbon-based National Statistics Institute’s website. Photographer: Mario Proenca/Bloomberg
“We have no more gold to save us from being kicked out this month,” the 46-year-old said as he stood in the area of downtown Lisbon popular with cash-for-gold stores. “Everyone I know is struggling, even the gold stores are empty because nobody has any more gold left to sell.”
Oliveira encapsulates a growing trend in debt crisis- stricken Europe as household gold supplies dry up after record prices and a deepening recession prompted a proliferation of places to exchange the metal for money.

Related here in the US
"Major U.S. gold buyer shuts down in wake of fraud"

As noted elsewhere -
"The truth is pawn shops, jewelry stores and other gold buyers will only pay you between 25% and 50% of spot (true market value). The mail in your gold companies are actually worse by typically paying only 15% to 35% of spot. What about selling on Ebay? Most people selling gold on Ebay sell them at around 90% of spot but by the time Ebay and Paypal takes all their fees you end up only netting between 70% to 75% of spot."

Kind of makes jewelry as a PM a bad bet, eh?

[phil_in_cs]

Kind of makes jewelry as a PM a bad bet, eh?

Ferfal said in Argentina, silver and gems were not accepted at all as trade goods. Only gold was, and even then you were constantly under valued.

[Doctorr Fabulous]

Kind of makes jewelry as a PM a bad bet, eh?

Ferfal said in Argentina, silver and gems were not accepted at all as trade goods. Only gold was, and even then you were constantly under valued.

So the lesson is that precious metals/stones are a bad prep item for the most part, since $900 could buy you plenty of preps today instead of only $500 or $200 worth when you really need it. Investments are out of my league.

[Vicarious_Lee]

Kind of makes jewelry as a PM a bad bet, eh?

Ferfal said in Argentina, silver and gems were not accepted at all as trade goods. Only gold was, and even then you were constantly under valued.

So the lesson is that precious metals/stones are a bad prep item for the most part, since $900 could buy you plenty of preps today instead of only $500 or $200 worth when you really need it. Investments are out of my league.

Well, I remember FerFal advocating buying junk gold early, like old wedding rings and shit, and like a bag of them. I mean, you're GONNA need something that you didn't think of before.

However, Argentina's paper currency is not exactly equivocal to America's paper currency. So, how much junk gold vs how much cash do you have on hand?

I have no idea.

[phil_in_cs]

Personally, I think 1lb bags of sugar, salt, rice, and beans will have a good consistent value in hard times, and importantly, are small enough in value making change is easy and you aren't risking much of your stash.

If all you have is a 1oz krugerand, how are you going to buy a 25lb sack of flour? Pay $1700 in current dollars if they can't make change? Even if you have tenth ounce coins you'd still be paying $170.

I know rice/beans/etc take more room to store and are more difficult to bug out with. I also know our recent ZSC:014 trip to the LDS cannery I got a whole hell of a lot of long term storage food for well under $100.

[Doctorr Fabulous]

Personally, I think 1lb bags of sugar, salt, rice, and beans will have a good consistent value in hard times, and importantly, are small enough in value making change is easy and you aren't risking much of your stash.

If all you have is a 1oz krugerand, how are you going to buy a 25lb sack of flour? Pay $1700 in current dollars if they can't make change? Even if you have tenth ounce coins you'd still be paying $170.

I know rice/beans/etc take more room to store and are more difficult to bug out with. I also know our recent ZSC:014 trip to the LDS cannery I got a whole hell of a lot of long term storage food for well under $100.

Krugerands, you say?

[the_alias]

On the ground report Portugal

I took a holiday to Portugal last week and got to see first hand some of what happens when a country needs a bailout and the resulting fall out:

Key observations
Young people are all but gone - saw very few young people around the city. Those that are are working in Tourism and have plans to leave after their English has improved

Lots of abandoned business and to rent or sell signs. Often right next to brand new buildings or the brand new buildings are totally empty and deserted

Tourism is where the money is - you have some bars trying to rip you off with 5 euros a beer which is extortionate. Go to a locals place and pay what it is really worth (1 euro 25 was the cheapest I found) The industrious ones run their own tours of lisbon and ask for donations. I met three of the guys who ran the tour and they did it all as side income to cash in on tourism - all however were either students or in jobs.

Paying for anything with a 20 euro note or higher draws ire from shopkeepers. This was quite remarkable really but the entire economy seems to function on coins and 5 and 10 euro bills. Stock low denominations.

When you see "cash4gold"shops are out of business things are bad.

You'll get offered drugs "'ash,hash, coke, coke" more times than you can remember. Often in broad daylight in the equivalent of Times Square. (Portugal has decriminalised drugs and I would estimate 80% of the street approach dealers are rip'n'run artists. Shoepolish is not hash.)

Engineering and Medicine are still rock solid degrees and professions.

Not many people are so keen on Ze Germans

Costal tourist spots are far more isolated from the crisis than Lisbon.

Supermarkets with empty shelves and a lack of products is the norm - however local small markets are making a comeback with local produce.

Those EU motorways are lovely and all but not being used

[Ten Eight]

Hmm. Very similiar to what Simon Black had to say about the country when he was there not too long ago.

[Krustofski]

So... Unilever, one of the world's leading food giants prepares for the return of poverty to Europe:

http://www.marketplace.org/topics/wealt ... ng-poverty

Unilever's new european strategy to reflect growing poverty


Interview by Jeff Horwich
Marketplace Morning Report for Tuesday, August 28, 2012


The European company Unilever is a giant food and household goods company. Here in the U.S. it owns brands like Hellman's, Lipton, Vaseline and Dove. Unilever is even more dominant in Europe.

Its top European official said something very provocative in a new interview with the Financial Times Deutschland. He said poverty has come back to southern Europe -- and the company will approach consumers there using techniques from developing countries.

Gerard Rijk is a food and beverage analyst with ING in Amsterdam. He says the techniques will include reducing the packaging sizes of products to make those products more affordable for customers on tight budgets.

But won't European be insulted to be treated like people in developing countries? Rijk doesn't think so. "It just makes life easier for them," he says.

[...]

http://www.marketplace.org/topics/wealt ... ng-poverty

[Audio recording of interview at link]

Now, my local newpaper offered a commentary on the very same news report:

Badly paraphrased from German:

Europe - A Threshold Country
["threshold country" is a term for "newly industrialized country", e.g. Brazil, used in many European languages]

Commentary by Jan Jessen, Neue Ruhr Zeitung, 28. August 2012


Consumer good giant Unilever prepares for the prosperity level in the periphery of Europe dropping to the level of newly industrialized countries. Think about that! A company like that doesn't care about ideologically charged politics, about justice, or the common good of European society; a compay like that cares about business, about keeping customers in line. Which means: Managers -calculating and weighting certain points against each other- have come to the conclusion that poverty will be on the increase in Europe, and they will have to change the way in which they offer their goods. Not cheaper, of course, but in sizes that may actually be bought without pushing decreasing household budgets too much. Just the way they do it in Africa and Asia.

[...]

[The rest of the commentary leaves the topic of Unilever and rumbles on about eroding wealth even outside of southern Europe, and working poor in Germany]

See, what I'm trying to say is: The commentary has a point. Unilever is known for clever busines models and careful calculations. Unlike some managers in other sectors (my dear bankers, I'm looking at you), these people know what they are doing.

I don't think there's a Global Debt Time Bomb that will explode soon. What we are seeing is a slow erosion of Europe's standard of living, and I'm afraid it's a long-term situation.

[TacAir]

"Southern Europe"

The Balkans, Spain, Portugal and Italy. Would that include Turkey?

And yes, I'd say Unilever was just being pragmatic. "Poverty" is already rife in Spain and Portugal.

[Pilsung]

http://globaleconomicanalysis.blogspot. ... ey-in.html

Harrisburg to Run Out of Money in October; Inside America's Most Indebted City; Labyrinth of Fraud

Congratulations to Harrisburg, the capital of Pennsylvania, for having the highest per capita debt of any city in the country.

The town's 50,000 citizens are on the hook for $1.5 billion according to the NPR article Inside America's Most Indebted City.

The city has delayed payments to light bulb venders and paper sellers. Restaurants have hired their own security. A local strip club paid to keep the street light on. The city is projected to run out of money entirely in October.

A judge has recently ordered a 1% income tax hike on the people still left in Harrisburg. But the city council has promised to fight it.

$1.5 Billion Does Not Include Schools, Pensions, Unfunded Liabilities

The Patriot News notes Harrisburg's eye-popping debt total is just one piece of city's bleak financial puzzle

It’s almost impossible to say exactly how much money the elected and appointed officials of Harrisburg have borrowed.

Missing financial audits, complicated transactions and intertwining finances create a labyrinth of money that stretches decades into Harrisburg’s history.

At best estimates, based upon reviews of independent reports and audited financial statements, the amount of debt owed by the city and its affiliated entities — with interest — stands somewhere north of $1.5 billion.

That’s roughly $30,285 for each of the 49,528 men, women and children living in the city and almost twice the income of the average city resident.

While the amount of debt is eye-popping, it is only one piece of the jigsaw puzzle that is the city’s bleak financial background.

It does not account for past-due debt payments or unfunded pension and healthcare obligations. Nor does it include the estimated annual deficits in the city’s and school district’s budgets, which this year are so far estimated at $6.8 million for the city and at least $7 million for the school district, even with drastic cuts such as eliminating kindergarten.

A declining tax base contributes to the overall problem — between 2009 and 2012, the assessed value of property in the city dropped by more than $30 million, according to a school district report.

Meanwhile, each time property taxes increase, fewer people pay them. According to a school district report, property tax collection rates have fallen from 87 percent to 83 percent.

[Pilsung]

http://www.zerohedge.com/news/september ... tgage-lend

September has arrived which means for Europe reality can, mercifully, return. First on the agenda: moments ago the French government suddenly announced the nationalization of troubled mortgage lender Credit Immobilier de France, which is also the country's second lagrest mortgage specialist after an attempt to find a buyer for the company failed. "To allow the CIF group to respect its overall commitments, the state decided to respond favourably to its request to grant it a guarantee," Finance Minister Pierre Moscovici said according to Reuters. What he really meant was that in order to avoid a bank run following the realization that the housing crisis has finally come home, his boss, socialist Hollande, has decided to renege on his core campaign promise, and bail out an "evil, evil" bank. Sadly, while the nationalization was predicted by us long ago, the reality is that the French government waited too long with the sale, which prompted the Moody's downgrade of CIF by 3 notches earlier this week, which in turn was the catalyst that made any delay in the nationalization inevitable. The alternative: fears that one of the key players in the French mortgage house of cards was effectively insolvent would spread like wildfire, leading to disastrous consequences for the banking system. End result: congratulations France: your Fannie/Freddie-Dexia moment has finally arrived, and the score, naturally: bankers 1 - taxpayers 0.

[TacAir]

Spain is in trouble, and that trouble is heating up. (Source)

Several days ago we reported that Spanish financial institutions suffered the largest deposit outflow on record in the month of July when a whopping EUR74 billion, or 5% of the country's entire asset base, picked up and left, the bulk of it most likely taking the well-known path of least resistance to the safety of Swiss and German bank vaults.

We showed how this looks visually, and as the chart below confirms it can be summarized in one word only: waterfall. And while in isolation this news was bad enough, a far more troubling implication arises when one considers that in Europe's financial Ice-9 world, in which the interbank market has been dead for over a year, and where the ECB is the shadow lender of only resort, providing funding via various repo channels to local banks to fund Spain's deficit by purchasing sovereign bonds in the primary market.

To wit: since the entire financial system's liabilities (deposits) just declined by a record EUR74 in one month, since the consolidated balance sheet has to balance, either Spain's (thoroughly insolvent) banks had to generate EUR74 billion in shareholder equity in one month, i.e. profits - a prospect which is rather amusing considering Spain's banking system recently officially demanded a European bailout, or banks had to sell a like amount of assets in order to fund this outflow.

Naturally, they chose the latter. The problem is that the security they sold is the one which only the banks have been buying recently in order to preserve the illusion that Spain is solvent. It was Spanish sovereign bonds.


For those not familiar with the reference to Kurt Vonnegut Jrs book, "Cat's Cradle" Ice 9

[Pilsung]

http://www.peakprosperity.com/blog/7954 ... st-realize

This is an important update on the U.S. drought of 2012, the combined record-setting July land temperatures, and their impact on food prices, water availability, energy, and even U.S. GDP.

Even though the mainstream media seems to have lost some interest in the drought, we should keep it front and center in our minds, as it has already led to sharply higher grain prices, increased gasoline costs (via the pass-through of higher ethanol costs), impeded oil and gas drilling activity in some areas (due to a lack of water), caused the shutdown of a few operating electricity plants, temporarily reduced red meat prices (but will also make them climb sharply later) as cattle are dumped in response to feed- and pasture-management concerns, and blocked and/or reduced shipping on the Mississippi River. All this and there's also a strong chance that today's drought will negatively impact next year's Winter wheat harvest, unless a lot of rain starts falling soon.

[Mister Dark]

Bankia to get yet another bailout. Hilarity ensues.

http://news.yahoo.com/spain-bank-rescue-fund-approves-bankia-aid-174146664--finance.html

MADRID (Reuters) - Spain's national bank rescue fund approved an immediate capital injection of 4.5 billion euros ($5.66 billion) into ailing lender Bankia on Monday, the Fund for Orderly Bank Restructuring, or FROB, said in a statement.

"The operation will be carried out by the FROB subscribing to a capital increase," the FROB said in a statement.

The FROB added that the operation was subject to approval from the Bank of Spain and the government. The operation will restore Bankia's core capital to meet regulatory levels, the FROB said.

($1 = 0.7947 euros)

http://online.wsj.com/article/SB10000872396390443759504577629331770883046.html?mod=googlenews_wsj

From the Wall Street journal:
Government ministers from Madrid to Brussels cheered Spain's much-anticipated bank-reform law, unveiled Friday, which creates new procedures for winding down failing institutions. Friday was also the day on which Madrid said it would grant a bridge loan to Bankia, that basket case of Spain's financial system, instead of shutting it down. What good is a hammer if you're not going to use it on a protruding nail?

By any standard, Bankia is one of those nails. Formed in 2010 as a mash-up of seven savings banks, Bankia last week reported a €4.45 billion loss for the first half of the year—among the largest ever for a Spanish bank. It shed nearly a fifth of customer funds over the same period, and its ratio of bad loans to total lending jumped by 44%. Its core capital ratio is 6.3%, well below the level required of Spanish banks under the February 2011 financial-sector overhaul.

So it's bad enough that Madrid is delivering another dose of smelling salts instead of administering last rites. Yet even more troubling is the new loan's source. Madrid won't be drawing rescue capital from the €30 billion available to it from the July agreement with the EU. Instead, the €4.5 billion injection will come from Spain's taxpayer-backed bank-bailout vehicle. The money will be rolled into the EU bank rescue once that begins disbursement in November.

There are technical reasons that Spain might be choosing, for now, not to tap the bailout money already allocated to it. But the cynical interpretation is that Madrid is again seeking to dodge the requirement, enshrined in the EU agreement, that junior bondholders take losses as part of any rescue. Burden-sharing would reduce the amount of state aid needed to repair troubled lenders, but Madrid fears the political consequences of forcing haircuts on retail investors.

None of this helps the feeling that Spain's bank rescue has become a costly sop that favors bank creditors over taxpayers. Friday's reform package also creates a "bad bank" to buy and hold toxic real-estate assets. Economy Minister Luis de Guindos vowed last week that the measure will cost nothing to taxpayers. But Ireland's NAMA, the other "asset management agency" set up since the eruption of Europe's crisis, has been accused of opaque accounting and of creating conditions for its assets to be bought below their purchase value. The sovereign bailout that Madrid is so desperate to avoid is looking ever likelier.

After a few weeks of "all quiet on the EU front", I believe we are seeing the next phase of problems begin to surface. combined with QE3 and the problems the chinese are having with their markets, this may be a more bumpy fall than I expected.

[phil_in_cs]

here's why they needed the bailout:

In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system.

The deposit outflow in Spain reflects a broader capital flight problem that is by far the most serious in the euro zone. According to a recent research note from Nomura, capital departing the country equaled a startling 50 percent of gross domestic product over the past three months — driven largely by foreigners unloading stocks and bonds but also by Spaniards transferring their savings to foreign banks.

http://www.nytimes.com/2012/09/04/busin ... tw-nytimes

[Pilsung]

Coming soon to a country near you....

http://news.yahoo.com/argentines-feelin ... 02211.html

BUENOS AIRES, Argentina (AP) — Argentines are increasingly feeling trapped inside their country as the government restricts access to the foreign cash they need to travel.

Legally trading pesos for dollars or euros has become ever more difficult as President Cristina Fernandez tries to keep dollars inside the country and bolster the Argentine peso's sliding value. And new rules taking effect this week are squeezing them still further by going after credit card spending.

Until now, travel has offered a limited exception to the currency controls first imposed last November: People up to date on their taxes and poised to cross a border, tickets in hand, can get permission to buy no more than $100 per person for each day abroad. The process is bureaucratic and intrusive, and many say their requests are rejected for reasons they don't understand.

Credit and debit cards provided a legal way out, enabling people to make purchases and get money while abroad. But now the government is cracking down there as well.

The new measures make using plastic inside or outside the country less affordable by charging 15 percent in taxes on all foreign purchases that appear on credit or debit card bills, plus a 50-percent customs duty on any goods from abroad that might be brought back to Argentina. Internet purchases on sites such as Amazon, eBay and the Apple Store are included, along with anything bought using online services such as PayPal.

Consumers will pay the tax along with their monthly card bills. And for the first time, the government will be able to scrutinize each cardholder's entire bill, tracking their spending to capture anything unreported on customs and tax declarations. Argentines are taxed on wealth as well as income, so this gives tax agents powerful new tools to collect a piece of everything they own.

Tax chief Ricardo Echegaray described twin objectives: catching scofflaws and making it less attractive for Argentines to spend abroad.

[Doctorr Fabulous]

In the realm of "Oh Shit, please don't let this happen here" I give you news out of Spain, hot off the presses.

http://investmentwatchblog.com/breakdown-three-tons-of-food-looted-from-grocery-stores-in-spain-as-millions-struggle/#.UEg7_41lSXO

As the economic and financial systems of the world rapidly approach the real possibility of total collapse, signs of what we can expect on a mass scale in the near future are beginning to appear throughout Europe.

In Spain, a country that just a few years ago was heralded as a shining example of real estate entrepreneurship, international tourism and a rising middle class, the situation is so bad that many are unable to meet the most basic necessities for life.

Social safety nets across the continent are visibly under stress and breaking down, so much so that unemployed Spaniards have begun raiding supermarkets in order to put food on the table. As recently as last month the people of Cadiz and Sevilla, which have a reported unemployment rate of 32%, joined together to loot local grocery stores of three tons of food - some of which was distributed to local food banks.

Fernando "FerFAL" Aguirre, author of Surviving the Economic Collapse, was in Argentina in the early 2000?s when the country underwent a hyperinflationary currency meltdown, and says that these acts of desperation are a carbon copy of what he witnessed in his own country and should be expected as the economic crisis accelerates:

To be fair they aren’t taking booze and big screen TVs, but taking what isn’t yours is still under the same principle. Would you do any different if you couldn’t put food on the table and spent months unemployed?

Just a few years ago many Spaniards would joke saying that thanks to the new immigration wave everyone in Spain could afford to have a “Sudaca” as a maid. Sudaca is a derogatory term similar to wetbacks, commonly used in Spain referring to South Americans. This is pretty sad given that these “sudacas” are children and grandchildren of those same Spaniards that left to SA because of the Spanish Civil war. Now, its obvious that they are suffering many of the miseries their “Sudaca“ brothers went through in the past.

Spaniards eating out of garbage bins, many of them senior citizens, have become a common sight in Spain and in other European countries where they have emigrated to looking for work themselves.

This morning we learned that 46.7 million Americans – a new record – are receiving government nutritional food assistance benefits, so the troubles we’re seeing in Spain, Greece and other European countries are not just limited to the other side of the ocean. They are happening right here at home.

The only reason stores in the United States are not yet being looted like those in Spain is that our social safety nets are still able to support the basic needs of most of the population. But as prices continue to rise, more jobs are lost, and record numbers of people join the ranks of the already 100 million receiving some form of government welfare, the breaking point is quickly approaching.

In Spain, just a few short years ago people were living the high life. Expensive homes, expensive cars, luxury vacations and dining, ever-expanding credit limits, and not a worry in the world. Does that sound familiar?

Those same people who would have laughed in your face five years ago had you told them the economy was going to collapse and their country would be facing a massive debt default that would leave the majority of their population in poverty – those same people are rumaging through garbage cans in the hopes they can find some bread, rice and vegetables to put on their dinner tables.

This is reality.

More videos at the link. Original story courtesy of SHTFPlan.org. Some text and typographical errors fixed.