I may have mentioned last week that we have gone over the proverbially cliff and have not yet hit the rocks below, and that the ground is coming up fast and that it is really gonna suck when we hit.
Barack Obama may lose the advantage of low borrowing costs as the U.S. Treasury Department says what it pays to service the national debt is poised to triple amid record budget deficits.
Interest expense will rise to 3.1 percent of gross domestic product by 2016, from 1.3 percent in 2010 with the government forecast to run cumulative deficits of more than $4 trillion through the end of 2015, according to page 23 of a 24-page presentation made to a 13-member committee of bond dealers and investors that meet quarterly with Treasury officials.
(snip)
The amount of marketable U.S. government debt outstanding has risen to $8.96 trillion from $5.8 trillion at the end of 2008, according to the Treasury Department. Debt-service costs will climb to 82 percent of the $757 billion shortfall projected for 2016 from about 12 percent in last year’s deficit, according to the budget projections.
Budget Proposal
That compares with 69 percent for Portugal, whose bonds have plummeted on speculation it may need to be bailed out by the European Union and International Monetary Fund.
Forecasts of higher interest expenses raises the pressure on Obama to plan for trimming the deficit. The President, who has called for a five-year freeze on discretionary spending other than national security, is scheduled to release his proposed fiscal 2012 budget today as his administration and Congress negotiate boosting the $14.3 trillion debt ceiling.
What is currently happening with the devaluation of the dollar and what you need to know to survive the crash starting with the United States government being the biggest debtor in the world, US dollars (Federal Reserve Notes) being the world’s reserve currency and what happens when other countries stop accepting those dollars (hint: oil skyrockets), how the entire world is moving away from the dollar as the world’s reserve currency – and what that means exactly for us poor slobs. Mr. Stansberry also lays out what you need to do to protect what little wealth you may have left. (Disclaimer: this video is actually an advertisement for a subscription newsletter – sign up at your own risk. I am posting it for educational purposes as information contained is pertinent. Do your own due diligence on Mr. Stansberry’s company.)
Many of my readers have watched this one hour and sixteen minute video, but the newly minted awakees have not. I urge everyone to find the time to watch this video in it’s entirety! You will learn economic history that you may not have known and useful (unreported tidbits) like many new currencies being traded inside the United States like the Berkshares being traded in the Berkshire region of Massachusetts.
Porter Stansberry – The End Of America:
A small excerpt:
Let me back up, and show you in the simplest terms possible, what is going on, why I am so concerned, and what I believe will happen in the next twelve months.
In short, I believe that we as Americans are about to see a major, major collapse in our national monetary system, and our normal way of life.
Basically, for many years now, our government has been borrowing so much money (very often using short-term loans), that very soon, we will no longer be able to afford even the interest on these loans.
I say these things as an expert in accounting and financial research.
You may not think things are THAT BAD in the US economy, but consider this simple fact from the National Inflation Association:
Even if all US citizens were taxed at 100% of their incomes, it would still not be enough to balance the federal budget. We’d still have to borrow money just to maintain the status quo.
Ron Paul’s ‘Straight Talk’, 2.14.2011
The Fed Has Failed: Money Printing Can’t Create Actual Jobs
The answers can be found in the red and yellow bars above, representing Federal government spending and state and local government spending. Federal spending rose by $700 billion, and state and local government spending rose by $300 billion. (With the state and local spending being funded by Federal government transfers that have been netted out, so it is really almost all growth in Federal spending.) The private economy plummeted by $1.3 trillion while the government economy soared by $1 trillion, and we were left with what looks like a much more manageable $300 billion shrinkage, the kind of economic change that might be associated with a 9.8% official unemployment rate. In other words, a little over 75% of the collapse in the private economy was (and is) being covered by increased government spending.– Hiding A Depression, How The US Government Does It
Want to tell me how that economic recovery is working out? Does it feel like the US and the rest of the world are recovering or does it feel like we are in a slow motion slide across some damn slippery ice? Not quite breaking through the ice and plunging into the abyss yet not coming to a full stop, and stuck watching your future and your childrens’ futures flash before your eyes? Does it feel like you are treading water and slowly but surely getting more and more tired while waiting for somebody, anybody, to throw a life preserver of some sort? Have you spent the last few years hunkering down, holding onto what little cash you have, and waiting for this economic winter to pass? Starting to think it isn’t going to?
Want to know why?
There appears to be a $1.3 trillion dollar hole in our economy that our government and the Federal Reserve mafia are papering over with trillions of dollars of fiat electronic money in hopes that we don’t fall into the black hole of economic collapse. Is Anybody Surprised as we watch the entire fiat monetary/government spending ponzi scheme unwind right before our eyes? It’s happening and on some level, you know it.
If one adds together three separate forms of gauging unemployment, we come up with about 30%, and when one adds in the $1.3 trillion dollar shrinkage of the private sector – well, you should know what that means…we’ve been talking about it here (and planning for it) for well over a year; the ‘D’ word.
Let me remind everyone that in the world of economics a 10% economic contraction is the formal definition of economic Depression; ergo, we have been in one for the last two years and are today! – Karl Denninger, MarketTicker,Bernanke Is Getting Scared….,4.27.2010
The real US unemployment rate is not 9.8% but between 25% and 30%. That is a depression level of job losses – so why doesn’t it look like a depression for many people? How can so large of a statistical discrepancy exist, and how is it that holiday shopping malls are so crowded in a depression?
The true devastation is hidden by essentially placing the job losses inside three different “boxes”: the official unemployment box, the true full unemployment box, and most importantly, the staggering and persistent private sector job loss box that has been temporarily covered over by a fantastic level of governmental deficit spending. The “recovering and out of the recession” cover story is only plausible when nobody connects the dots and adds all the boxes together.
We will add together the three boxes herein – using US government statistics for all three – and convincingly show that the US economy is in far worse condition than what is presented by the government or by the mainstream media. No, we have not emerged from “recession” and there will be no “double dip” – because the first “dip” was straight down to a depression-level economy in 2008/2009, and we haven’t come back up.
Creating artificial “free money” on a massive scale that artificially boosts short-term employment is how you segment depression level unemployment into the separate boxes and hide what is really happening. It is this radical strategy that most distinguishes the current downturn from the 1970s and 1930s. The ultimate source of most of the current “free money” that hides the depression is the government risking the impoverishment of US savers and investors for potentially decades to come, with the worst of the damage concentrated on retirees and Boomers.
To have a chance of defending your hoped-for future lifestyle, there is simply no substitute for seeing the truth clearly. For it is only when we see through the lies with clarity that we can distinguish the false opportunity of manipulated markets from the real opportunities that can be found in unexpected places.
:snip:
The Third Box: Artificial Employment
What happens if we add the real, full U6 unemployment rate of 17% to the hole in the private economy that is currently being covered by the government’s spending money it doesn’t have? The simplest approach is to say that 9% of the US economy is manufactured money that’s funding government deficits, and if we didn’t create artificial money to fund artificial jobs, then that 9% of the economy implodes. If 9% of the economy abruptly disappears, there goes 9% of the jobs as well, so the unemployment rate would immediately jump by another 9%. There are a staggering number of simplifications involved in this approach, but it’s not a bad approximation for illustration and discussion purposes within a short article.
Add 17% and 9%, from two different US government sources, and we have 26% real unemployment right there. That is, if the Federal Reserve were not manufacturing money out of the nothingness to fund government spending without limits – at grave peril to all savers and investors – then it would be fair to say that the US would be at a 26% unemployment rate. This is slightly higher than the peak 25% unemployment rate in 1933, during the worst part of the US Great Depression.
Unfortunately, it is likely worse than even that. There is a multiplier effect when it comes to employment, and if we drop 9% of the economy, the support jobs that are created to serve the people who make up that 9% go away as well. We also need to allow for more government manipulation of inflation statistics, which creates a little greater economic loss picture, and in total, arguably, if we look at the real private sector right now, and we set aside jobs funded by monetization, we’re at a real unemployment rate of over 30%. And if we were to end the deficits and the assault on the value of the US dollar, and the US government only spends what it could take in – we would be at that 30%+ level almost instantaneously.
Now, hit this link and read the entire story as it affects everyone, especially the elderly and the boomers.
If you don’t believe it, read this from MarketTicker:
To The Incoming Senators and Congresspeople: YOU ARE ON NOTICE.
No mewling about the National Debt and deficit. The below charts cannot be argued with. They are what they are.
No promises to “do something about it tomorrow.”We’ve heard about that now for three years. The time for political stunts and showmanship is over. This is a real issue, it is a real national crisis, and if you don’t do something about it you’ll be lucky to get through 2011 before it blows up.
YOU WILL NOT GET THROUGH 2012. I know what you’re thinking already. Remember that George W. Bush thought the same thing in 2007 and early 2008. So did Bernanke. So did Paulson. They were wrong.
If you do not act on this, it will detonate before the elections next year.
Not might.
Will.
This is the truth through 12/31/2010. We closed the year at $1.714 trillion dollars in deficits for the year. That’s a record, more than $100 billion higher than the $1.612 trillion last year.
The deficit for the last calendar year was 11.64% of GDP. This is right up there with the nations that have blown up – Iceland, Greece and Ireland – and this is the third year running you’ve put up numbers over 10% (10.23, 11.41 and now 11.64, respectively.)
You will not get away with this into the indefinite future. You may think you can get away with it for two more years, but I assure you – that is not going to happen.
Further, the true GDP rate for the last 12 months is in fact -7.31%. We now have a cumulative decline in GDP built into the economy of approximately 30% that must be absorbed. If you attempt to continue this path much further, it won’t be a decline that we will be dealing with, it will be an all-on collapse.
I know 30% sounds outrageously large – and beyond the nation’s ability to absorb. It cannot be absorbed without severe pain. But if we do not take that pain, force the bad debt into the open that is causing this and clear it – irrespective of whether we want to or not, the result will be political and economic collapse.
This is as certain as night follows day, and day follows night. It is as certain as January 1st follows December 31st.
(Editor’s Note: For those looking for a ‘Happy New Year’ from the Monster; dream on…it’s just another day in the campaign against the Wall Street banks, DHS, the Federal Reserve, colluding large corporations (Wal-Mart) and the bloated federal government.)
Gerald Celente being interviewed on KFI AM 640 with John and Ken about the $20 Trillion that the Fed has used to bailout and payoff banks all over the world, hedge funds, and large corporations. The story starts at the five minute mark in part 1. Gerald continues with the financial abyss that has turned the entire world into a deer in the headlights and gives his trend predictions for 2011 in part 2.
According to Elizabeth Norcross of the Mercatus Center, the states’ $452 Billion in unfunded pension liabilities is closer to $3 Trillion ‘when you get the accounting right’. How’s that red crayon math working out now?
“…but the day of reckoning is at hand. The debt crisis is already making Wall Street nervous, and some believe that it could derail the recovery, cost a million public employees their jobs, and require another big bailout package that no one in Washington wants to talk about.” – 60 Minutes
60 Minutes has done a thirteen minute report on the approaching day of reckoning for the states who are drowning in the deep end of the fiscal pool. According to Gov. Chris Christie, it’s not a income problem, it is a government employee benefit problem, and according to Meredith Whitney (highly respected Wall St. financial analyst) who has done research on the financial health of states and cities, this spring will see an influx of municipalities defaulting on their bonds because $160 Billion of federal stimulus cash will run out (just about the time the next round of residential and commercial mortgage resets occurs). She was calling out the big banks about the problems ahead for them long before they wanted to admit their liability, and those very same municipal bonds that will be defaulted on are owned, in the majority, by those very same big banks. Let’s all get ready for T.A.R.P. 2.0.
Economic history lessons of the US with depressions that were averted. In 1946, the Republicans ran on the phrase, “Had Enough Yet?” and took control of congress. You may not be saying that phrase yet, but you will…
We never thought we would see the day in our lifetimes when the COMMUNISTS would end up OWNING everything, but thanks to Wal-Mart and stupid American moos sending all our money overseas, it’s going to be an interesting Xmas this year as China has the cash and attitude to buy Europe.
China has said it is willing to bail out debt-ridden countries in the euro zone using its $2.7trillion overseas investment fund.
In a fresh humiliation for Europe, Foreign Ministry spokesman Jiang Yu said it was one of the most important areas for China’s foreign exchange investments.
The country has already approached struggling European countries with financial aid, including offering to buy Greece’s debt in October and promising to buy $4billion of Portuguese government debt.
‘To have any discernible effect China will have to buy a lot more than 5billion euros if they expect to have any impact on the negative sentiment surrounding Europe,’ said Michael Hewson, currency analyst at CMC Markets.
China’s astonishing economic growth has put it on track to overtake America as the world’s economic powerhouse within two years, a recent report claimed.
But experts believed still be some years before America’s leadership role is really challenged – largely because Beijing has given no indication it is ready to take on the responsibility of shepherding the world’ economy.
And now, RedLemur’s musical take on the situation…(my apologies for not being able to rip the audio from the video).
My Christmas came earlier this month when Ron Paul was named chair of the House Subcommittee on Domestic Monetary Policy, which has as one of it’s duties, overseeing the Federal Reserve. We may just see the end of the banking mafia yet.
The judge’s ‘Plain Truth’ about how the Fed has stolen our wealth:
“…but the day of reckoning is at hand. The debt crisis is already making Wall Street nervous, and some believe that it could derail the recovery, cost a million public employees their jobs, and require another big bailout package that no one in Washington wants to talk about.” – 60 Minutes
60 Minutes has done a thirteen minute report on the approaching day of reckoning for the states who are drowning in the deep end of the fiscal pool. According to Gov. Chris Christie, it’s not a income problem, it is a government employee benefit problem, and according to Meredith Whitney (highly respected Wall St. financial analyst) who has done research on the financial health of states and cities, this spring will see an influx of municipalities defaulting on their bonds because $160 Billion of federal stimulus cash will run out (just about the time the next round of residential and commercial mortgage resets occurs). She was calling out the big banks about the problems ahead for them long before they wanted to admit their liability, and those very same municipal bonds that will be defaulted on are owned, in the majority, by those very same big banks. Let’s all get ready for T.A.R.P. 2.0.
Welcome to a ‘Round Robin’ of fiscal insanity; who will default first?
(H/T TheRightScoop)
Rep. Devin Nunes (R-CA) is trying to set up a pre-emptive strike against bailouts for public pension funds (from 12.7.2010).
Bernie Sanders wants to know if the Federal Reserve is the world’s central bank. An uneducated Monster’s answer? “Yes, the American taxpayer is the lender of last resort to the entire world through the Banking Mafia known as the Federal Reserve System.” Where the hell do you think the money for the Greek and Irish bailouts came from? The IMF, which is mainly funded by…wait for it…yep, the American people. Wake the hell up Bernie!
According to FT, the Federal Reserve documents that were released earlier today, show $3.3 TRILLION in loans and currency swaps, with the majority of our cash going to foreign banks. Nope, I’m not even going to spend a moment trying to wade through all the paper the Fed buries us in. We’ll just have to trust the Financial Times.
Is anybody here even batting a eye at this news? Did anyone here think that the $9 Trillion that went missing ended up anywhere but overseas just like the billions from the AIG bailout?
The link to the FT article is below, and I suggest you take a few minutes checking out the full article and the embedded video. I just love listening to british newscasters speak about their poor understanding of today’s modern banking and asking “how do you think the American public is going to react when they hear about the amount of support provided to non-American banks?” Pitchforks anyone? Can we get rid of the financial pirates yet?
My only remaining question is whether or not the Fed collects interest twice; once on the money loaned to the foreign banks and then again from us for creating the electronic fiat money that the banks used?
This writer absolutely has to disagree with Beck’s assessment that the ‘perfect storm’ has just come ashore. Rather, IMHO, we are currently sitting in the still air of the eye of a Category 10 Financial Hurricane with the more dangerous backside about to hit us. And yes, the Federal Reserve is still protecting the banks to the detriment of producers. Please keep that perspective in mind as you watch Beck today.
Part 1:
(Subsequent segments will be added as they become available.) (more…)
Many of my readers have watched this one hour and sixteen minute video, but the newly minted awakees have not. I urge everyone to find the time to watch this video in it’s entirety! You will learn economic history that you may not have known and useful (unreported tidbits) like many new currencies being traded inside the United States like the Berkshares being traded in the Berkshire region of Massachusetts.
