Toss that onto the logpile before you throw a match on it, along with the $3 trillion in underfunded State employee pensions, $6 trillion in FNM/FRE debt guarantees, and these black hole guarantees which probably add up to another several trillion: AIG, GMAC, GM, FHA, FDIC, Federal Reserve toxic assets, Citicorp, all the other Too-Big-To-Fail Wall Street banks...ad nauseum.
For many years, the Federal Govt tapped into the Social Security Trust for funding, issuing the Trust special Treasury bonds. Now the Govt owes the Trust $2.5 trillion. It was basically the same financing mechanism as selling bonds to the Chinese or Japanese, except that the Chinese or Japanese can dump their bonds in the freely traded the U.S. Govt bond market. The SS Trust has only the full faith and credit of the Govt to pay it back. Here's the AP article link from Yahoo: What's 2 1/2 Trillion Among Friends?
About 6 years ago I was debating the future of this country with some arrogant, smart-ass know-it-all retired surgeon from Wash DC. I tried to get him to sell his house in Potomac, MD for the $1.8 million it was worth at the time - it's now worth maybe $900k. I also explained to him that I would never see Social Security payments and would gladly accept a substantially discounted present value payment for the money I paid into the Trust in exchange for foregoing any future benefits to me. He rolled his eyes and said I was an idiot.
Who's looking like the idiot now? Weimar-style hyperinflation of the currency is just around the corner. It's the ONLY way the Government is going to be able to make ends meet on the budget deficit plus all the other many trillions in claims piling up. The thieves on Wall Street, aided and abetted by the thieves in the White House and Congress, are stealing anything that's not nailed down before the whole system collapses. It's not a matter of "IF" but of "WHEN."
Got gold?
Sunday, March 14, 2010
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once we are BK, what's a little more?
ReplyDeleteLOL. that's clearly their philosophy
ReplyDeleteI somewhat believe in this case from an older Market Skeptics' post:
ReplyDeletehttp://www.marketskeptics.com/2008/12/how-deflation-creates-hyperinflation.html
I'm open to arguments against that scenario. It seems to me the only question is how long will the general populace have confidence. My guess is a very, very long time. Of course we could just maintain the equilibrium between inflation and deflation for years (like Japan). Infinite fiat vs. Infinite debt.
Dave,
ReplyDeleteThis post truly highlights just how screwed we are. Anybody that cannot see this is either blind or in denial.
We are headed to a chaos of unbelieveable proportions as the thin veil of reality is shattered and the masses are totally wiped out.
Even those of us that have been financially responsible will be caught up in this. The only alternative I can see at this point is to bug out to a remote location and become self-sustaining.
Joe M.
Joe, I think the best "survival" strategy would be to relocate to an "irrelevant" country like the ones in Central America or maybe a sovereign Caribbean Island like the Barbados.
ReplyDeleteChad, the biggest differences by far between Japan and the U.S. is that Japan has always been a net exporter during its zombie bank/deflation period and the population has huge savings, so the Govt didnt have to stimulate them into spending. Here the Govt has to print money and give it to the populace, which is exactly what cash for clunkers and the home buyer tax credit is and its exactly why they're extending unemployment benefits ad inifinitum.
ReplyDeleteSerious price inflation is coming sooner than most realize in this country. In some ways its already here but the Govt completely rigs the CPI.
Dave,
ReplyDeleteI just read where Bill Murphy was formally invited to the CFTC meeting on 3-25. Do you think there is a chance in hell the CFTC will do anything about the short position? I remain skeptical.
Joe M.
Dave,
ReplyDeleteJust to be clear about my last comment. I am happy and excited Bill got a personal invite to this meeting. I just wish he had Chris Powell at his side because together they represent a dynamic-duo.
The truth presented by GATA in this meeting will be an archive for history. Just like there was an archive of history about that guy that Made-Off with billions in his own ponzi-scheme.
Joe M.
Oops. Meant to comment Joe. I agree, I think Gensler is giving GATA a blow job here so that he can say he let GATA speak its piece. I would bet everything I have against Gensler doing anything that alleviates the fraud/corruption/manipulation.
ReplyDeleteTo the extent that GATA gets to air its voice in a public forum, it's fantastic and hopefully those who pay attention will get educated and interested. BUT, I doubt very many people even give a shit about the CFTC gold/silver hearings.
Dave, Denniger (love him or hate him), makes a good point: why should the fed trash the only product it sells, namely the usd, to bail out a bankrupt government?
ReplyDeleteDid Denninger really make that remark? Reeeally? He understands less about what's going on than I assumed he understood if he said that.
ReplyDeleteC'mon now. The Fed doesn't care about the dollar or the U.S. Govt. The Fed is owned by banks. It is a private entity that has been given the keys to our system BY the Govt. Study the history and development of the Federal Reserve from about 1913 thru the late 1920's.
The Fed controls the money supply - essentially -because it enables them to use fiat currency inflation AND bailouts as the mechanism to transfer money from the people to the banks. Remember the famous Mayer Rothschild quote: "Give me control of a nation's money and I care not who makes the laws." That's where we are today.
Just one example: Goldman engineers AIG into bankruptcy using derivatives and fraud, extracts 100's of millions in fees to be paid in bonuses, THEN uses its former CEO in the Treasury to concoct the bailout of AIG in order to monetize Goldman's exposure, enabling Goldman to pay out even more in bonuses. Record bonuses in 2009 as a matter of fact. Goldman is one of the primary owners of the Fed. They don't give a flying fuck about the currency.
Do me a favor and tell Denninger to study history and economics more thoroughly.
Dave, a bit OT here but any thoughts on the heath care bill? 40 million new customers for Big Insurance, but that's not the real story.
ReplyDeleteThe subsidized "exchanges" are on both the House and Senate bills, so they are practically a done deal. Anyone buying coverage from the exchanges, making less than 4x poverty level, will be subsidized in some way. Lower income folks pay no almost nothing out of pocket.
Doesn't take a harvard grad to realize that everyone will be piling into these programs. Premiums across the board will skyrocket since Uncle Sam is footing the bill. Just wanted to add this to your "black hole" of guarantess, not on anyone's radar just yet but coming soon.
If this HC bill passes, I think we'll see gold really take off because the only way it can be funded is with the printing press and there's more transfer of wealth from us to BigPharma/Big Insurance/Big Hospital than there was in the first TARP transfer.
ReplyDelete