Joe Meyer, an arbitrator and mediator for the NASD and NYSE, discussed the probability of a worldwide financial meltdown looming in our future. What could be some of the contributing factors of the coming economic Armageddon? Consumer debt is a big problem. Meyer said, "Currently, we have now outstanding consumer credit [of] $9.3 trillion." According to Meyer, the average debt load per household is about $18,700, and 18% of a household's net income is used to pay down debt.
The total debt of America is $31 trillion. Despite this huge debt load, foreign countries continue to invest in U.S. treasury bonds. However, Meyer warned, "If [foreigners] stopped purchasing our bonds, it would be literally impossible to finance our budgetary deficits." Bond prices would be significantly hindered, which would in turn panic equity and housing markets Meyer concluded. This could, in Meyer's opinion, cause banks to call in mortgages--house loans would have to be paid off immediately or face foreclosure.
The tough job market is also a source of concern for Meyer. He went on to explain that the U.S. has lost 2.7 million manufacturing jobs in the last 3 years. Meyer said that only 10% of the American workforce is in manufacturing--a sharp decrease from 25% during the 1950s and 1960s. Many of these jobs are going to China and other parts of the world. Concerning China, Meyer cited some interesting statistics. Currently China consumes 40% of the world's cement, 27% of its steel, and 7% of its oil production. Meyer said oil consumption in China increased by 30% in one year alone.
Added together, our debt load and lack of savings, the scarcity of good paying jobs, and trade imbalances may be heading us toward economic ruin. Meyer suggested that concerned individuals not take on additional debt, and try to reduce any current debt. He went even farther in proposing that homeowners sell their houses and convert what they own into cash.
The first hour of Saturday night's show featured Open Lines. A caller from California suggested chem/contrails were purposely designed to make the world hotter for reptilian aliens. John in Atlanta voiced his opinion on climate change, suggesting that man has little to do with it. Art politely pointed him to the C2C website to view a satellite photo of contrails crisscrossing the southeastern United States. Another caller proposed the idea that we can fix global warming and "wild weather" by replenishing ozone in the upper atmosphere.