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A Credit Rating Downgrade And A Market Collapse Coming In Weeks: Wealthy Fleeing France, UK, U.S. As The Country Is Entering An Era Of Fiscal Austerity And Tax Rates Becoming Unbearable, Fiscal Cliff Deal Looking Increasingly Unlikely, And Economic Growth In Advanced Economies Is Essentially Over!
The market continues to track the same pattern it performed going into the failed debt ceiling talks of July 2011. As you’ll recall, then as is the case now, US politicians failed to reach a credible solution to the US’s debt problems. What followed was a credit rating downgrade and a market collapse:
Here’s the S&P 500′s recent action:
Here’s the S&P 500′s action going into the failed debt ceiling talks of 2011:
Here’s what followed:
Be forewarned. As noted earlier this week there are no political incentives for the GOP or Democrats to propose a real solution to the fiscal cliff. So it is highly likely we will be going over the cliff.
Another item holding up the market is hype and hope of more QE from the Federal Reserve at its December 10-11 meeting. I have to admit, I find this proposal completely baffling. Macroeconomics 101 dictates that it takes a full six months or more before a change in monetary policy by the Fed will be fully digested by the system. The Fed just announced a new program three months ago. So the academics at the Fed aren’t even drinking their own Kool-Aid anymore….
BREAKING: Boehner: Obama Walking Economy to Edge of ‘Cliff’
Fiscal Cliff 2013: Why It’s Looking Like No Deal
Expectations have changed lately regarding fiscal cliff 2013. It’s looking increasingly likely that we are going over it.
U.S. Treasury Secretary Timothy Geithner, U.S. President Barack Obama’s lead delegator on the fiscal cliff talks, told CNBC the Obama administration is “absolutely” prepared to go over the cliff if Republicans don’t change their tune on taxes.
President Obama and Republican House Speaker John Boehner on Wednesday, along with Congressional Republicans, reiterated their stance on the fiscal cliff. No compromise was reached, with just 25 days remaining before zero hour.
President Obama maintains there could be a quick deal if Republican lawmakers withdraw their resistance to raising taxes for individuals earning more than $250,000 a year, swapping for concessions on federal spending cuts and entitlement reforms….
The US Is Entering A New Era Of Fiscal Austerity
In discussing the fiscal cliff issue, the one big takeaway not to forget is that it is all about austerity—-extreme austerity if we go over the cliff and a lesser amount of austerity if we settle it before year-end.
More than likely, this is the start of new era of fiscal austerity in the U.S. In no way do we see this as a solution to the myriad of problems besetting the U.S. economy and stock market.
These include the still excessive level of household debt that is the main culprit holding back economic growth, a loss of economic momentum in the last few months, declining earnings estimates and guidance, the European recession and the growth slowdowns in the BRIC nations and emerging markets.
Austerity Pushes Europe Into Its Second Recession In Four Years
Wealthy Americans Fleeing The U.S. As Tax Rates Becoming Unbearable
…
1. Thanks to Proposition 30, many high income residents of California will be paying marginal income tax rates of51.9% in 2013 if the fiscal cliff is not avoided. Keep in mind that the 51.9% figure only includes federal and state income taxes. It does not count any of the dozens of other taxes that we pay each year.
2. If a fiscal cliff deal is not reached, many residents of New York and Hawaii will also be paying marginal income tax rates of more than 50 percent.
3. If Americans fully funded the government through their taxes without any borrowing, the average American would have to work for 197 days just to meet the expenses incurred by government.
…
Income tax will exceed 50% in California, Hawaii, and New York City
Thanks to passage of Proposition 30 last month, high-income Californians would pay the nation’s highest marginal income tax rates –nearly 52 percent — if President Barack Obama and Congress fail to make a deal to avoid the so-called “fiscal cliff,” according to a new study.
Any civilization that taxes it’s people more than 50% has always fallen.
Always.
Business Fleeing France as 75% Income Tax Looms
A flood of top-end properties are hitting the market as businessmen seek to leave France before stiff tax hikes hit, real estate agents and financial advisors say.
“It’s nearly a general panic. Some 400 to 500 residences worth more than one million euros ($1.3 million) have come onto the Paris market,” said managers at Daniel Feau, a real-estate broker that specialises in high-end property.
While it is not yet on the scale of the exodus of rich French after the election of Socialist president Francois Mitterrand in 1981, real estate agents said, the tax plans of France’s new Socialist President Francois Hollande are having a noticeable effect.
While the Socialists’ plan to raise the tax rate
to 75 percent on income above 1.0 million euros per year has generated the most headlines, a sharp increase in taxes on capital gains from the sales of stock and company stakes is pushing most people to leave, according Didier Bugeon, head of the wealth manager Equance.
Read more here: http://www.newsmax.com/Newsfront/business-flees-france-income/2012/10/07/id/459007
Two-thirds of millionaires left Britain to avoid 50p tax rate – Telegraph
Almost two-thirds of the country’s million-pound earners disappeared from Britain after the introduction of the 50p top rate of tax, figures have disclosed.
Read more here: http://www.telegraph.co.uk/news/politics/9707029/Two-thirds-of-millionaires-left-Britain-to-avoid-50p-tax-rate.html
Seven Steps for We the People to reclaim our Nation…
First, We the people must demand zero tolerance for Congressional gridlock and bi-partisanship…no legislation, no compensation, period.
Second, End the Federal Reserve Act of 1913 on its 100th evil anniversary. End the Fed and cancel the bogus National Debt owed to the Federal Reserve international banking cartel
Third, arrest all Bankers involved in the sale of derivatives and other worthless paper.
Fourth, put an immediate moratorium on banking initiated illegal foreclosures.
Fifth, create Treasury-backed Silver Certificates to replace the Federal Reserve Note.
Sixth, the State Legislatures must come together as one body with the military oathkeepers to stop this globalist agenda and overthrow those in the Federal Legislative and Executive Branches of government in a peaceful transiton of power. Return our government back to defenders of the Republic and away from the Globalist puppets that are attempting to destroy the nation and deliver the remains to the United Nations!
Seventh, impeach any president that doesn’t comply with the will of We the People.
The Feds are completely under the control of the Zionists bankers. If the State and local governments together with State and Local Law enforcement, Attorneys General, State Militias, National Guard and Military Oathkeepers can’t come together as a single body to defend the American people against this federal system run amock, and re-take the Republic from this silent enemy, then America has already lost the Third World War. What is your choice as Americans? Join with the States, Counties and Municipalities to end the forced tyranny of the Federal Reserve Act of 1913.