What ‘US Dollar Loses Reverse Status’ Actually Means

What ‘US Dollar Loses Reverse Status’ Actually Means

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.

The ground is closer:

From the Washington Times:

Federal deficit on track for a record this fiscal year

Government debt to exceed U.S. economy

and this from Bloomberg:

Geithner Quietly Tells Obama Debt-to-GDP Cost Poised to Increase to Recor

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

A Message To Loyal Monster Readers…UPDATED

Author’s Update: I originally posted the following item on 12/22/08 and what followed was The Fed series which you can find at the top of this blog; it has it’s own page.  The reason for bumping up this post is that this particular article has now gotten more hits than any other including the “Socialism” series; which I find rather odd and incredibly interesting.  Also of note are two blogs that are hitting this post; Let’s Take The High Road and djd58.  These two blogs are protected and all the hits come from the same 4 IP addresses.  I have been watching both and the hits number in the 1000s.  Also, I have stated that I will let you know when interesting visitors show up.  BEHOLD, my most interesting visitor today, Davis, Polk & Wardell, probably one of the most influential law firms in the world.  Two days ago the U.S. Treasury was on.  Are we full of it kids, or are they getting nervous?  The Republicans better find their cajones and stop that $900 Billion (really 1.2 Trillion) Stimulus Bill.

From Davis, Polk & Wardell’s site:

Lead counsel to the Federal Reserve Bank of New York and the U.S. Department of the Treasury on a series of unprecedented financing transactions for AIG, including (i) the Fed’s $85 billion credit facility and related equity ownership rights; (ii) the Fed’s subsequent participation in up to $37.8 billion of securities lending transactions; (iii) the issuance of $40 billion of newly issued perpetual preferred shares to Treasury; (iv) the creation of two entities capitalized with up to $52.5 billion in senior financing from the Fed to address issues arising out of AIG’s U.S. securities lending program and credit default swaps obligations.

Lead counsel to Citi on its realignment into two businesses, Citicorp and Citi Holdings.

Lead counsel to Citi on its proposed joint venture with Morgan Stanley that will combine Morgan Stanley’s Global Wealth Management Group and Citi’s Smith Barney retail brokerage units in the U.S., U.K. and Australia into a new entity, Morgan Stanley Smith Barney.

Lead counsel to Citi on its agreement with agencies of the U.S. government pursuant to which the U.S. government has provided a package of guarantees on $306 billion of assets, liquidity access and capital, including a $20 billion investment in Citi’s preferred stock under TARP and a $7 billion investment in preferred stock in connection with the above guarantees.

Lead counsel to Citi on its proposed $56 billion rescue of Wachovia, which was the first FDIC-assisted “open bank” transaction to invoke the “systemic risk” exception to the “least cost resolution” principle.

Counsel to the Federal Reserve Bank of New York on the U.S. Treasury’s $250 billion bank capital purchase program.

Counsel to the Federal Reserve Bank of New York on the creation of the Term Asset-Backed Securities Loan Facility (TALF), through which the New York Fed will extend up to $200 billion in non-recourse loans to certain holders of newly issued AAA-rated asset-backed securities collateralized by student loans, consumer loans and small-business loans.

Lead counsel to the Federal Home Loan Mortgage Corporation (Freddie Mac) on a proposed increase in its equity capital, the U.S. government’s conservatorship and financial assistance package, as well as the Department of Justice and SEC investigations.

Counsel to Her Majesty’s Government (HMG) on U.S. bank regulatory and other issues relating to HMG’s plan to provide financial support to the U.K. banking system.

Lead counsel to Citi as the organizer of a multi-bank financing on a potential pre-bankruptcy acquisition of Lehman by Barclays. The firm is also advising several major financial institutions on credit exposure issues relating to Lehman.

I guess a warm welcome is in order for such a prestigious and connected New York law firm, yes?

If you want to get into what they think about the Emergency Economic Stabilization Act, go here, and if you want to learn about how this law firm is tied into everything, check out their Wiki; make sure to take the time to scroll down and look at their alumni, for example, Kirsten Gillibrand – U.S. Senator (D-NY).

Would anyone like to hazard a guess as to why they are visiting on The Monster?  I’m open….

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Good Evening All,

I wanted to leave a note for y’all to let you know that I had an email sent to me a day ago and what started out as simple research for one article has overturned a can of worms, or snakes as the case may be, and I will not be posting anything for a few days as I research and sift through all the material and connections that are rising to the surface.  I would like to let it be known though, that if half of what I have found is true, Obama is the least of our worries, and if you are a person of prayer, now might be a good time to start again or continue, and that comment coming from a recovering Catholic says quite a bit.

Also, I left a note in my sidebar about converting your currency to silver or gold bullion.  I put that note up before I really started the research and that note holds more true now than ever.  Might be a good idea to do it before The One Ascends.

I am foreseeing another series of articles like the “Socialism” series and will let you know when the first is close to being posted.

Thank you for your patience and please take some time to wander around the site and read some articles that you may have missed.

Many Mahalos and Safe Journeys,

Diamond Tiger

(Shtuey – better make that a case of beer and some whiskey….)

The Treasury Helps GM Slap Ford (AND US) In The Face: UPDATED

The Treasury Helps GM Slap Ford (AND US) In The Face: UPDATED

UPDATE: The Today’s Are You Freakin’ Kidding Me Award WAS going to go to the Federal Commission that thinks raising the gas tax on Americans by 10 cents per gallon is a really good idea, but it has been pre-empted by GMAC!!! (IMAGINE THAT!!!!)

GMAC is sponsoring the GMACBOWL using our tax dollars and even worse:

GMAC FInancial Services and Team focus partner to coach children on money management (BWAAAAAHHHHHHHHHH!!!!!!!!!!!!!!!!!)

DETROIT (June 16, 2008) – GMAC Financial Services today announced that it will partner with Team Focus to give boys and girls the smart edge when it comes to money management. Team Focus, a community outreach program that provides inspirational, community, social and academic guidance to children without father figures, will have a GMAC SmartEdge financial literacy education session at its 2008 Camp Focus.

Team Focus has been affiliated with the GMAC Bowl and “is excited to bring our association with GMAC to a higher level through the addition of the GMAC SmartEdge financial education session at Camp Focus,” said Mike Gottfried, CEO and founder of Team Focus. “SmartEdge will provide us with another way to positively influence the lives of the children that come to camp.”

GMAC is committed to providing financial literacy opportunities through its GMAC SmartEdge program. “It is important to mentor youth and help children prepare for their future,” said Sharon Sayles Belton, director of community relations at GMAC. “Now more than ever, young adults need to understand money management so they are ready to make smart financial decisions when they enter adulthood.” (This coming from the morons that drove their company into the ground and now has to have us bailing them out?)

“It’s never too early to start learning appropriate money management skills,” adds Don Ferguson, director of GMAC SmartEdge. “The SmartEdge education sessions are designed to engage young people to make better financial decisions, plan their spending habits and save for their future.” (And in the words of Dennis Hopper, “Nothing Like A Smoke When You Miss Your Mom and You Are Never Too Young Too Start”.)

Camp Focus will have its first leadership camp of the year in Mobile, Ala., with 10 other camps throughout Alabama, California, Nevada, Ohio, Tennessee and Washington, D.C., with approximately 75-80 children at each camp. This year Team Focus is expanding its program by having its first girls’ camp.

GMAC SmartEdge hosts financial literacy seminars around the country and provides money management tutorials and tips on its Web site, www.smartedgebygmac.com, which is designed to educate consumers in the areas of credit, budget, vehicle and home financing, banking, and insurance.

********

I am currently hard at work on the third article in the Economic Collapse series but I just could not let this perfect example of government screwing private companies over go by because it makes me growl, and with my expanded education about the US Treasury, The Federal Reserve and Hank Paulson, events are getting curiouser and curiouser…

Treasury To Ford: Drop Dead

The GMAC rescue plays favorites.

When the Bush Treasury decided to bail out Detroit, GM and Chrysler quickly said yes to the taxpayer cash, but Ford Motor Co. said it didn’t need the money and declined. Ford’s reward for this show of self-reliance? Treasury is now helping GM again by giving it a credit pricing advantage against Ford in the marketplace.

That’s one little-noted result of Treasury’s action earlier this week to rescue GMAC, the GM credit arm that, as it happens, is 51% owned by the Cerberus private-equity shop that also owns Chrysler. With $5 billion in taxpayer cash in its pocket, GMAC quickly decided to offer 0% financing on several of its models. “I think it would be fair to say that without this change . . . we would not be able to do this today,” explained GM Vice President Mark LaNeve in a conference call with reporters this week.

The messy little policy issue is that these GM products compete with those sold by Ford, Toyota, Honda and numerous other car makers that won’t benefit from GMAC’s cash infusion. And with the cost of financing often crucial to buyer decisions, the feds have now put the muscle of the state behind one company’s products.

Ford in particular must wonder what it did to deserve this slap. CEO Alan Mulally joined the GM and Chrysler chiefs in testifying for the bailout even while insisting his company didn’t want the funds. And once the bailout was announced, Mr. Mulally said that “All of us at Ford appreciate the prudent step the Administration has taken to address the near-term liquidity issues of GM and Chrysler.” So much for gratitude.

….

This is always what happens when politicians decide to muck around in private industry. Even when made with the best intentions, their policy decisions have unintended consequences that help some companies at the expense of others. Meanwhile, your neighbor who buys a GM SUV this weekend with 0% financing should thank you when he pulls into the driveway. He did it with your money.

Would you agree with me that Hank Paulson needs to be fired for following what appears to be an agenda that is in exact opposition to the will and benefit of the American People?

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