KUHNER: Obama threatens religious liberty Mandating contraception coverage violates the Christian conscience

Like many leftists, President Obama has deep contempt for Christianity and democracy. This is why his administration has declared war on theCatholic Church and religious liberty.

Health and Human Services Secretary Kathleen Sebelius recently went ahead and approved last year’s decision to mandate that many religious organizations provide health insurance plans to their employees that include contraception, abortion-inducing drugs and sterilization coverage - and this must be done without charging a co-pay. In other words, Mr. Obama has done something that is ominous and unprecedented: compelling religious groups to embrace and subsidize free birth control. Catholic universities, hospitals and charities must either betray their fundamental social teachings or drop insurance coverage for their employees, thereby triggering massive financial penalties under Obamacare. The choice is simple: Abandon Catholic doctrine or go out of business.

The ruling will not simply devastate the Catholic heath care system and elaborate social network, which includes soup kitchens, adoption centers, immigrant services and parochial schools. It directly assaults and violates the conscience rights of Catholics. The church teaches that contraception is a sin, an immoral attempt to obstruct God’s will of when and whether human life should be created. It is the ultimate embodiment of pride: man trying to act as God. That is why opposition to birth control is at the heart of the Catholic faith.

The church teaches that the primary purpose of sexual activity within the sacred bonds of marriage is procreation - to perpetuate humanity from one generation to the next. For nearly 1,500 years, such thinking underpinned the Christian West. That was then; this is now. Since the 1960s, modern society is obsessed with contraception, abortion and sexual hedonism. The results have been declining birth rates and shrinking native populations. Literally, the West is dying. As the late Pope John Paul II put it, we are in the grips of “a culture of death.” Birth control is a key pillar. It is a seminal aspect of the socialist drive to establish a secular utopia - smash the traditional family by relentlessly advancing the sexual revolution. The pill and the condom are the hammer and sickle of cultural Marxism. Decades ago, the Vatican warned that birth control eventually would lead to the West’s demise. A civilization unable - and unwilling - to reproduce itself is doomed.

Yet even if one does not care a scintilla about the church’s stance on contraception, the ruling should frighten everybody - Christian and non-Christian. America was founded upon one key principle: religious freedom. The Pilgrims fled religious persecution. Our Founding Fathers deliberately created a republic banning an established church, such as England’s Anglican Church, and championed a nation where different religious denominations could exist - and flourish - without government harassment. Religious liberty lies at the core of American freedom. In fact, the Founders considered it so important that it comes before all other rights enshrined in the First Amendment. James Madison, the primary author of the Constitution, said, “Conscience is the most sacred of all property.” The Obama administration is telling Catholics that their conscience rights can be trampled with impunity. The state has the power to coerce people to support and pay for practices they find morally repugnant and contravene their fundamental religious beliefs. This is tyranny.

Mr. Obama is the most radical president in our history. He is spearheading a liberal social revolution, not just an economic one. He supported partial-birth abortion - the heinous procedure of killing babies just before they are to be delivered. His administration refuses to uphold the Defense of Marriage Act. He has enabled homosexuals to serve openly in the military, transforming the armed forces into a vast laboratory for social engineering. His signature legislation, Obamacare, allows for the federal funding of abortion. Hence, Christians will be forced to have their tax dollars subsidize the mass murder of unborn children - a direct attack on their most basic religious tenets. He is making Christians complicit in infanticide.

To commemorate the 39th anniversary of Roe v. Wade, Mr. Obama made a remarkable and revealing statement. He said legalized abortion is indispensable “to ensure that our daughters have the same rights, freedoms and opportunities as our sons to fulfill their dreams.” In other words, being pregnant is a burden - an obstacle - to be overcome. That a human life is destroyed is irrelevant to him and the feminist left. Murder, it appears, is sometimes necessary to achieve liberalism’s much-vaunted goal of personal liberation.

“Religion is the opiate of the masses,” Karl Marx said. This is why Marxists and their fellow travelers have sought to eradicate religious faith - especially Christianity. Tens of millions of Christians were slaughtered by Vladimir Lenin, Josef Stalin and Mao Zedong. At its core, communism is based on anti-Christian bigotry (just as national socialism is infused with anti-Semitism).

Mr. Obama is a militant secularist. His aim is to purge religion from the public square, forcing it to retreat into the private sphere - making it nothing more than a personal lifestyle choice. He wants us to leave our faith at the door when engaging in civic life. Yet religion is natural to human beings. The only way radical progressives can forge a secular social order is through a repressive state.

The Obama administration is eroding the First Amendment, assaulting the conscience rights and religious liberties of Catholics and waging a relentless campaign to destroy America’s Judeo-Christian values. Catholics must engage in civil disobedience. Otherwise, Mr. Obama will succeed in dismantling our republic. Today, he is coming for us. Tomorrow, it will be you.

Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute.

Glenn Beck Unveils ‘Anonymous for Good’

Peter Schiff U.S. is In Worse Shape Than Europe

The "Real" Che

NEWT... THE PROGRESSIVE LIAR.

FRIDAY, JANUARY 20, 2012

Elective Adultery And Election Ambition:

Though I am not political, some moments in the political world spill over into things I do care about. One of them is unfolding at the moment. The disclosure of Newt Gingrich's marital infidelity, and on-going extramarital misconduct resulting in his second divorce and third marriage, is one of those rare moments when the United States has an opportunity to make a significant moral error. It is true we have had past presidents who have engaged in sexual misconduct while in office. Some were discovered only after they left office. President Clinton, of course, was known to have done so while still serving. But the United States has never elected a man whose extramarital affairs were publicly known before the election. Such conduct has always been disqualifying. This is because the United States has always cared about morality as much as about policy.

Apparently many political commentators cannot see the difference between offering an adulterous man whose sins are publicly known before the election as a candidate to the nation's highest office, in contrast to later discovering we've inadvertently elected an adulterous man. [Grover Cleveland was a bachelor and young when he may have fathered a child, not a married adulterer. He paid child support and was never conclusively shown to be the father.] When given the choice beforehand, adultery should always be disqualifying. Yet such "conservative" commentators as Rush Limbaugh and Laura Ingraham have championed Newt Gingrich after the disclosure; even Sarah Palin has defended Mr. Gingrich after it became an issue. Gov. Rick Perry has also endorsed Mr. Gingrich after this moral failing has become public.

Mr. Gingrich is ego-maniacal. He was dishonest and thrown out of Congress for his ethical lapses. His infidelity to his wife is mirrored in his infidelity to high office while serving in Congress. If he betrayed his wife before, and betrayed his public office before, he is unworthy to be trusted again. His very public penitence I view more as public theatre than humble submission to God. He proclaims his God-given forgiveness as a shield against criticism, rather than a matter of private devotion. Such conduct always raises a question about sincerity. He is ambitious, self-centered, now using religion to justify himself, and unworthy of renewed public trust. When someone has been involved in such a troublesome history I would expect they would voluntarily disqualify themselves by never running. I understand and sympathize with failed marriages and moral lapses. They happen. But contrition and ambition are incompatible. Some personal failings are so great they disqualify. At least from the right to hold an office of public trust which was designed to be viewed as much as a "pulpit" of righteousness as a seat of power.

He was careful yesterday to deny wanting an "open marriage" because the definition of the word used in the question does not quite fit his immoral conduct. He was not prepared to welcome his wife joining him in extramarital sexual relations, as "open marriage" implies. He wanted to do that alone. He wanted his wife to "share" him with his paramour. (This loophole allowing the denial was fed to him by Rush Limbaugh.) Therefore he could probably pass a lie-detector test about his denial of wanting an "open marriage." Yet he wants his adulterous companion to be the nation's First Lady, and himself to occupy the high position originally designed for George Washington-- the most trusted man of his generation. A man whose morality was beyond question. A man who led by example, freeing his slaves in his will as the example he hoped would end slavery without requiring the nation to be torn apart. Newt Gingrich will bring dishonor to any office he holds because of his inability to look beyond self-interest and personal glorification.

When a person is known to be an adulterer, they are by definition also a liar. Liars and adulterers are by any scriptural definition wicked. When a nation on this land chooses to uphold a wicked man to head their government, they are ripe for destruction. (See Mosiah 29: 27; Alma 10: 19, Helaman 5: 2.)

You uphold such a man at the peril of national destruction. His campaign has also exposed the underlying confused morality of some popular political commentators.

Posted by Denver Snuffer at 3:51 PM

Treasury dips into pension funds to avoid debt

WASHINGTON (Reuters) - The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.

"I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress.

The House of Representatives is expected to vote on Wednesday on the Obama administration's request to raise the country's legal debt limit to $16.394 trillion.

However, unless the lower chamber and the Senate are able to shore up enough votes to block the White House request, the debt limit will be increased by $1.2 trillion next Friday and a repeat of last year's debt ceiling debacle will be averted.

Geithner said Treasury started suspending reinvestments in afederal pension fund known as the G-Fund -- a tool Treasury has had to employ six times over the past 20 years in order to keep the country below the statutory debt limit.

The Treasury Department has already tapped another seldom-used fund in order to allow the government to continue borrowing without running afoul of the country's laws.

World Bank Warns of Global Growth Slowdown

BEIJING January 18, 2012 (AP)

By JOE McDONALD AP Business Writer

The World Bank warned Wednesday of a possible slump in global economic growth and urged developing countries to prepare for shocks that could be more severe than the 2008 crisis.

The bank cut its growth forecast for developing countries this year to 5.4 percent from 6.2 percent and for developed countries to 1.4 percent from 2.7 percent. For the 17 countries that use the euro currency, it forecast a contraction, cutting their growth outlook to -0.3 percent from 1.8 percent.

Global growth could be hurt by a recession in Europe and a slowdown in India, Brazil and other developing countries, the Washington-based bank said. It said conditions might worsen if more European countries are unable to raise money in financial markets.

"The global economy is entering into a new phase of uncertainty and danger," said the bank's chief economist, Justin Yifu Lin. "The risks of a global freezing up of capital markets as well as a global crisis similar to what happened in September 2008 are real."

Developing countries that have enjoyed relatively strong growth while the United States and Europe struggled might be hit hard, Lin said. He said they should line up financing in advance to cover budget deficits, review the health of their banks and emphasize spending on social safety nets.

Many governments are in a weaker position than they were to respond to the 2008 global crisis because their debts and budget deficits are bigger, Lin said at a news conference.

In the event of a major crisis, "no country will be spared," Lin said. "The downturn is likely to be longer and deeper than the last one."

The bank's outlook in its "Global Economic Prospects" report issued twice a year adds to mounting gloom amid Europe's debt crisis and high U.S. unemployment.

"It is very likely that most European countries, including Germany, entered recession in the fourth quarter of last year," said Hans Timmer, the World Bank's director of development projects.

Investors have cut investments in developing countries by 45 percent in the second half of last year, compared with the same period in 2010, Timmer said.

The report follows similar warnings about the global economy by its sister organization, the International Monetary Fund, and private sector forecasters.

For the United States, the bank cut this year's growth forecast to 2.2 percent from 2.9 percent and for 2013 to 2.4 percent from 2.7 percent. As reasons, it cited the anticipated global slowdown and the on-going fight in Washington over spending and taxes.

Global growth might suffer from the interaction of Europe's troubles and efforts by China, India, South Africa, Russia and Turkey to cool rapid growth and inflation with interest rate hikes and other measures, the bank said.

China's expansion slowed to a 2 1/2-year low of 8.9 percent in the three months ending in December from the previous quarter's 9.1 percent.

As Europe weakens, developing countries could find "their slowdown might be larger than is necessary to cope with inflation pressures," Lin said.

A global downturn would hurt developing countries by driving down prices for metals, farm goods and other commodities and demand for other exoprts, the World Bank said.

Slower growth is already visible in weakening trade and commodity prices, the World Bank said.

Global exports of goods and services expanded an estimated 6.6 percent in 2011, barely half the previous year's 12.4 percent rate, the bank said. It said the growth rate is expected to fall to 4.7 percent this year.

Prices of energy, metals and farm products are down 10 to 25 percent from their peaks in early 2011, Timmer said.

The United States is already feeling some pain from Europe's crisis. Exports to Europe fell 6 percent in November, the Commerce Department said last week.

Ack! They Are Actually Going To Let Greece Default!

I wish that I had an "aha moment" to share with you today, but instead all I have is an "ack moment" to share. As I was analyzing all of the info coming out of Europe in recent days, I came to the following realization: "Ack! They are actually going to let Greece default!" The only question is whether it is going to be an orderly default or a disorderly default. Of course the EU (led by Germany) could save Greece financially if it wanted to. But Germany has decided against that course of action. Many in the German government are sick and tired of pouring bailouts into Greece and then watching Greek politicians fail to fully implement the austerity measures that were agreed upon. At this point a lot of German politicians are talking as if a Greek default is a foregone conclusion. For example, Michael Fuchs, the deputy leader of Angela Merkel's political party, recently made the following statement: "I don't think that Greece, in its current condition, can be saved." But that is not entirely accurate. Greece could be saved, but the Germans don't want to make the deep financial sacrifices necessary to save Greece. So instead they are going to let Greece default.

Many prominent voices in the financial world that have been watching all of this play out are now openly declaring the Greece is about to default. Moritz Kraemer, the head of S&P's European sovereign ratings unit, made the following statement on Bloomberg Television on Monday: "Greece will default very shortly. Whether there will be a solution at the end of the current rocky negotiations I cannot say."

You might want to go back and read that again.

One of the top officials at one of the top credit rating agencies in the world publicly declared on television that "Greece will default very shortly."

That should chill you to your bones.

If the EU allows Greece to default, that would be a signal to investors that the EU would allow Italy, Spain and Portugal to all default someday too.

Confidence in the bonds of those countries would disintegrate and bond yields would go through the roof.

Right now, confidence in government debt is one of the things holding up the fragile global financial system. Governments must be able to borrow gigantic piles of very cheap money for the system to keep going, and once confidence is gone it is going to be incredibly difficult to rebuild it.

That is why a Greek default (whether orderly or disorderly) is so dangerous. Investors all over the world would be wondering who is next.

At the end of last week, negotiations between the Greek government and private holders of Greek debt broke down. Negotiations are scheduled to resume Wednesday, and there is a lot riding on them.

The Greek government desperately needs private bondholders to agree to accept a "voluntary haircut" of 50% or more. Not that such a "haircut" will enable the Greek government to avoid a default. It would just enable them to kick the can down the road a little farther.

But if Greece is able to get a 50% haircut from private investors, then why shouldn't Italy, Spain, Portugal and Ireland all get one?

Once you start playing the haircut game, it is hard to stop it and it rapidly erodes confidence in the financial system.

This point was beautifully made in a recent article by John Mauldin....

So our problem country goes to its lenders and says, "We think you should share our pain. We are only going to pay you back 50% of what we owe you, and you must let us pay a 4% interest rate and pay you over a longer period. We think we can do that. Oh, and give us some more money in the meantime. And if you refuse, we won't pay you anything and you will all have a banking crisis. Thanks for everything."

The difficult is that if our problem country A gets to cut its debt by 50%, what about problem countries B, C, and D? Do they get the same deal? Why would voters in one country expect any less, if you agree to such terms for the first country?

But if Greece is able to negotiate an "orderly default" with private bondholders, that would be a lot better than a "disorderly default". A disorderly default would cause mass panic throughout the entire global financial system.

One key moment is coming up in March. In March, 14 billion euros of Greek debt is scheduled to come due. If Greece does not receive the next scheduled bailout payment, Greece would default at that time.

But the EU, the ECB and the IMF are not sure they want to give Greece any more money. There are a whole host of austerity measures that the Greek government agreed to that they have not implemented.

Since the Greeks have not fully honored their side of the deal, the "troika" is considering cutting off financial aid. The following comes from the New York Times....

Officials from the so-called troika of foreign lenders to Greece — the European Central Bank, European Union and International Monetary Fund — have come to believe that the country has neither the ability nor the will to carry out the broad economic reforms it has promised in exchange for aid, people familiar with the talks say, and they say they are even prepared to withhold the next installment of aid in March.

But the austerity measures that Greece has implemented so far have pushed the Greek economy into a full-blown depression. Greece is experiencing a complete and total economic collapse at this point. The following comes from the New York Times....

Greece’s dire economic condition can hardly be overstated. After two years of tax increases and wage cuts, Greek civil servants have seen their income shrink by 40 percent since 2010, and private-sector workers have suffered as well. More than $75 billion has left the country as people move their savings abroad. Some 68,000 businesses closed in 2010, and another 53,000 — out of 300,000 still active — are said to be close to bankruptcy, according to a report issued in the fall by the Greek Co-Federation of Chambers of Commerce.

“It’s an implosion — it’s an endless sequence of implosions from bad to worse, to worse, to worse,” said Yanis Varoufakis, an economics professor at the University of Athens and commentator on the Greek economy. “There’s nothing to stop the Greek economy losing 60 percent of its G.D.P., given the path it is at.”

But Greece is not the only one in Europe with major economic problems. The unemployment rate for those under the age of 25 in the EU is an astounding 22.7%. And as I have written about previously, there are a whole host of signs that Europe is on the verge of a major recession.

Greece is just the canary in the coal mine. The truth is that the entire European financial system is in danger of collapsing.

Today, it was announced that S&P has downgraded the European Financial Stability Facility. It is pretty sad when even the European bailout fund is getting downgraded.

Of course most of you know what happened on Friday by now. Very shortly after U.S. financial markets closed, S&P downgraded the credit ratings of nine different European nations.

Only four eurozone nations (Germany, Luxembourg, Finland, and the Netherlands) still have a AAA credit rating from S&P.

But even more importantly, the nightmarish decline of the euro is showing no signs of stopping.

Right now, the EUR/USD is down to 1.2650. It is hard to believe how fast the EUR/USD has fallen, but if a major financial crisis erupts in Europe it is probably going to go down a whole lot more.

So what happens next?

Well, if there is a Greek default all hell will break loose in Europe.

But even if Greece does not default, the coming recession in Europe is going to put an incredible amount of strain on the eurozone.

Many have been speculating that Greece or Italy could be the first to leave the euro, but actually it may be the strongest members that exit first.

The number of prominent voices inside Germany that are calling for Germany to leave the euro continues to increase.

In addition, public opinion in Germany is rapidly turning against the euro. Onerecent poll found that only 47 percent of Germans were glad that Germany joined the euro, and only 36 percent of Germans want "a more federal Europe".

As this crisis continues to unfold, there will probably be even more "ack moments". European leaders have mismanaged this crisis very badly from the start, and there is no reason to believe that they are suddenly going to become much wiser.

Once again, it is important to emphasize the role that confidence plays in our financial system. The entire global financial system runs on credit. Banks and investors lend out money because they have confidence that they will be paid back. When you take that confidence away, the system does not work.

Let us hope that the folks over in Europe understand this, because right now we are steamrolling toward a credit crunch that could potentially make 2008 look tame by comparison.

22 Signs That We Are On The Verge Of A Devastating Global Recession

The following are 22 signs that we are on the verge of a devastating global recession....

#1 On Thursday it was announced that U.S. jobless claims had soared to a six-week high.

#2 Hostess Brands, the maker of Twinkies and Wonder Bread, has filed for bankruptcy protection.

#3 Sears recently announced that somewhere between 100 and 120 Sears and Kmart stores will be closing, and Sears stock has fallen nearly 60% in just the past year.

#4 Over the past 12 months, dozens of prominent retailers have closed stores all over America, and one consulting firm is projecting that there will bemore than 5,000 more store closings in 2012.

#5 Richard Bove, an analyst at Rochdale Securities, is projecting that the global financial industry will lose approximately 150,000 jobs over the next 12 to 18 months.

#6 Investors are pulling money out of the stock market at a rapid pace right now. In fact, as an article posted on CNBC recently noted, investors pulled more money out of mutual funds than they put into mutual funds for 9 weeks in a row. Are there some people out there that are quietly repositioning their money for tough times ahead?....

Investors yanked money out of U.S. equity mutual funds for a ninth-consecutive week despite a bullish 2012 outlook from Wall Street and a December rally that’s carried over into the New Year.

#7 There are signs that the Chinese economy is seriously slowing down. The following comes from a recent article in the Guardian....

Growth had slowed to an annual rate of 1.5% in the second and third quarters of 2011, below the "stall speed" that historically led to recession.

#8 The Bank of Japan says that the economic recovery in that country "has paused".

#9 Manufacturing activity in the euro zone has fallen for five months in a row.

#10 Germany's economy actually contracted during the 4th quarter of 2011. At this point many economists believe that Germany is already experiencing a recession.

#11 According to a recent article by Bloomberg, it is being projected that the French economy is heading into a recession....

The French economy will shrink this quarter and next, suggesting the nation is in a recession as investment and consumer spending stagnate, national statistics office Insee said.

#12 There are a multitude of statistics that indicate that the UK economy is definitely slowing down.

#13 The credit ratings of Italy, Spain, Portugal, France and Austria all just got downgraded.

#14 It is being reported that the Spanish economy contracted during the 4th quarter of 2011.

#15 Bad loans in Spain recently hit a 17-year high and the unemployment rate is at a 15-year high.

#16 According to a recent article in the Telegraph, the Italian government is forecasting that there will be a recession for the Italian economy in 2012....

The Italian government predicts GDP will contract 0.4pc next year, but many economists fear the figure is optimistic.

"We can say without mincing words that we have already slipped into recession," said Intesa Sanpaolo analyst Paolo Mameli. "We expect GDP to keep contracting for the next 3-4 quarters."

#17 Italy's youth unemployment rate has hit the highest level ever.

#18 The unemployment rate in Greece for those under the age of 24 is now at39 percent.

#19 Greece is already experiencing a full-blown economic depression. About a third of the country is now living in poverty and extreme medicine shortages are being reported. Things have gotten so bad that entire families are being ripped apart. According to the Daily Mail, hundreds of Greek children are being abandoned because the economy has gotten so bad that their parents simply cannot afford to take care of them anymore. The note that one mother left with her child was absolutely heartbreaking....

One mother, it said, ran away after handing over her two-year-old daughter Natasha.

Four-year-old Anna was found by a teacher clutching a note that read: 'I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry.'

#20 In Greece, large numbers of people are simply giving up on life. Sadly, the number of suicides in Greece has increased by 40 percent in just the past year.

#21 In many European countries, the money supply continues to contract rapidly. The following comes from a recent article in the Telegraph....

Simon Ward from Henderson Global Investors said "narrow" M1 money – which includes cash and overnight deposits, and signals short-term spending plans – shows an alarming split between North and South.

While real M1 deposits are still holding up in the German bloc, the rate of fall over the last six months (annualised) has been 20.7pc in Greece, 16.3pc in Portugal, 11.8pc in Ireland, and 8.1pc in Spain, and 6.7pc in Italy. The pace of decline in Italy has been accelerating, partly due to capital flight. "This rate of contraction is greater than in early 2008 and implies an even deeper recession, both for Italy and the whole periphery," said Mr Ward.

#22 The major industrialized nations of the world must roll over trillions upon trillions of dollars in debt during 2012. At a time when credit is becoming much tighter, this is going to be quite a challenge. The following list compiled by Bloomberg shows the amount of debt that some large nations must roll over in 2012....

Japan: 3,000 billion
U.S.: 2,783 billion
Italy: 428 billion
France: 367 billion
Germany: 285 billion
Canada: 221 billion
Brazil: 169 billion
U.K.: 165 billion
China: 121 billion
India: 57 billion
Russia: 13 billion

Keep in mind that those numbers do not include any new borrowing. Those are just old debts that must be refinanced.

As I mentioned at the top of this article, things do not look good.

The last thing that we need is another devastating global recession.

As I wrote about yesterday, the U.S. economy is in the midst of a nightmarish long-term decline. The last major global recession helped to significantly accelerate that decline.

So what will happen if this next global recession is worse than the last one?

Sadly, the people that will get hurt the most by another recession will not be the wealthy.

The people that will get hurt the most will be the poor and the middle class.

So what should all of us be doing about this?

We should use the time during this "calm before the storm" to prepare for the hard times that are coming.

As always, let us hope for the best and let us prepare for the worst.

But things certainly do not look promising for the global economy in 2012.

S&P Cuts Credit Ratings for Nine Euro Zone Nations Bam! Bam! Bam! Huge Financial Bombs Just Got Dropped All Over Europe

The European debt crisis has just gone to an entirely new level. Just when it seemed like things may be stabilizing somewhat, we get news of huge financial bombs being dropped all over Europe. Very shortly after U.S. financial markets closed on Friday, S&P announced credit downgrades for nine European nations. This included both France and Austria losing their cherished AAA credit ratings. When the credit rating of a country gets slashed, that is a signal to investors that they should start demanding higher interest rates when they invest in the debt of that nation. Over the past year it has become significantly more expensive for many European nations to borrow money, and these new credit downgrades certainly are certainly not going to help matters. Quite a few financially troubled nations in Europe are very dependent on the ability to borrow huge piles of cheap money, and as debt becomes more expensive that is going to push many of them over the edge. Yesterday I wrote about 22 signs that we are on the verge of a devastating global recession, and unfortunately that list just got a whole lot longer.

Over the past several months we have seen quite a few credit downgrades all over Europe, but we have never seen anything quite like what S&P just did. Standard & Poor’s unleashed a barrage of credit downgrades on Friday....

-France was downgraded from AAA to AA+

-Austria was downgraded from AAA to AA+

-Italy was downgraded two more levels from A to BBB+

-Spain was downgraded two more levels

-Portugal was downgraded two more levels

-Cyprus was downgraded two more levels

-Malta was downgraded one level

-Slovakia was downgraded one level

-Slovenia was downgraded one level

This is really bad news for anyone that was hoping that things in Europe would start to get better. Borrowing costs for many of these financially troubled nations are going to go even higher.

In addition, there was another really, really troubling piece of news that came out of Europe on Friday.

It was announced that negotiations between the Greek government and private holders of Greek debt have broken down.

The Institute of International Finance has been representing private bondholders in negotiations with the Greek government about the terms of a "voluntary haircut" that is supposed to be a key component of the "rescue plan" for Greece.

Greece desperately needs private bondholders to agree to accept a "voluntary haircut" of 50% or more. Without some sort of an agreement, the finances of the Greek government will collapse very quickly.

For now, negotiations have failed. There is hope that negotiations will resume soon, but Greece is rapidly running out of time.

The Institute of International Finance issued a statement on Friday which said the following....

"Unfortunately, despite the efforts of Greece's leadership, the proposal put forward … which involves an unprecedented 50% nominal reduction of Greece's sovereign bonds in private investors' hands and up to €100 billion of debt forgiveness — has not produced a constructive consolidated response by all parties, consistent with a voluntary exchange of Greek sovereign debt"

The IIF says that negotiations are "paused for reflection" right now, but they are hoping that they will be able to resume before too long....

"Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach"

Something needs to be done, because Greece is experiencing a complete and total financial meltdown.

Back at the end of July, the yield on one year Greek bonds was sitting at about 40 percent. Today, the yield on one year Greek bonds is up to an astounding396 percent.

That is how fast these things can move when confidence disappears.

Those living in the United States should keep that in mind.

Unfortunately, Greece is not the only European nation that is completely falling apart financially.

We aren't hearing much about it in the U.S. media, but Hungary is a total basket case right now. The credit rating of Hungary was reduced to junk status some time ago, and now the IMF and the EU are threatening to withhold financial aid from Hungary if the Hungarians do not run their country exactly as they are being told to do.

In particular, the IMF and the EU are absolutely furious that Hungary is trying to take more political control over the central bank in Hungary. The following is from an article in the Daily Mail....

The European Union has stepped up pressure on Hungary over the country's refusal to implement austerity policies and threatened legal action over its new constitution.

The warnings escalated the standoff between Budapest and the EU, as Hungary negotiates fresh financial aid from Europe and the International Monetary Fund.

Over the past months, the country's credit rating has been cut to junk by all three major rating agencies, unemployment is 10.6 percent and the country may be facing a recession.

But bailout negotiations broke down after Budapest refused to cut public spending and implemented a new constitution reasserting political control over its central bank.

Slovenia is a total mess right now as well. The following comes from a recent article posted on EUObserver.com....

Slovenia's borrowing costs have reached 'bail-out territory' after lawmakers rejected the premier-designate, putting the euro-country on the line for further downgrades by ratings agencies.

Zoran Jankovic, the mayor of Slovenia's capital Ljubljana, fell four votes short of the 46 needed to be approved as prime minister by the parliament, with the country's president set to re-cast his name or propose someone new within two weeks.

Some time ago, I warned that 2012 was going to be a more difficult year for the global economy than 2011 was.

Well, things are certainly starting to shape up that way.

Europe is heading for some really hard times. What is about to happen in Europe is going to shake the entire global financial system.

Those that live in the United States should take notice, because the U.S. financial system is far more fragile than most people believe.

Our banking system is a gigantic mountain of debt, leverage and risk and it could fall again at any time.

In addition, the U.S. debt problem is bigger than it has ever been before.

For example, did you know that the federal government is on a pace to borrow6.2 trillion dollars by the end of Obama's first term in office?

That is more debt than the U.S. government accumulated from the time that George Washington became president to the time that George W. Bush became president.

For now the U.S. government is still able to borrow giant piles of super cheap money, but such a situation does not last forever.

Just ask Greece.

Already there are indications that foreigners are starting to dump large amounts of U.S. debt. If this trickle becomes a flood things could become very bad for the United States very quickly.

We are on the verge of some very bad things. The kinds of "financial bombs" that we saw dropped today are going to become much more frequent. As governments, banks and investors scramble to survive, we are going to see extreme amounts of volatility in the financial marketplace.

Things are not going to be "normal" again for a really, really long time.

Hold on tight, because 2012 is going to be a very interesting year.