Fairfied County Weekly (12/24/2009), Heartland Institute's Budget & Tax News (2/14/2010)
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Economist/statistician John Williams
shifts through the government’s rose-tinted data
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Do you believe everything the government tells you? Economist and statistician John Williams sure doesn't. Williams, who has consulted for individuals and Fortune 500 companies, now uncovers the truth behind the U.S. government's economic numbers on his Web site at ShadowStats.com. Williams says that over the last several decades, the feds have been infusing their data with optimistic biases to make the economy seem far rosier than it really is. His site reruns the numbers using the original methodology. What he found was not good.
Maymin: So we are technically bankrupt?
Williams: Yes, and when countries are in that state, what they usually do is rev up the printing presses and print the money they need to meet their obligations. And that creates inflation, hyperinflation, and makes the currency worthless.
Obama says America will go bankrupt if Congress doesn't pass the health care bill.
Well, it's going to go bankrupt if they do pass the health care bill, too, but at least he's thinking about it. He talks about it publicly, which is one thing prior administrations refused to do. Give him credit for that. But what he's setting up with this health care system will just accelerate the process.
Where are we right now?
In terms of the GDP, we are about halfway to depression level. If you look at retail sales, industrial production, we are already well into depressionary. If you look at things such as the housing industry, the new orders for durable goods we are in Great Depression territory. If we have hyperinflation, which I see coming not too far down the road, that would be so disruptive to our system that it would result in the cessation of many levels of normal economic commerce, and that would throw us into a great depression, and one worse than was seen in the 1930s.
What kind of hyperinflation are we talking about?
I am talking something like you saw with the Weimar Republic of the 1930s. There the currency became worthless enough that people used it actually as toilet paper or wallpaper. You could go to a fine restaurant and have an expensive dinner and order an expensive bottle of wine. The next morning that empty bottle of wine is worth more as scrap glass than it had been the night before filled with expensive wine.
We just saw an extreme example in Zimbabwe. ... Probably the most extreme hyperinflation that anyone has ever seen. At the same time, you still had a functioning, albeit troubled, Zimbabwe economy. How could that be? They had a workable backup system of a black market in U.S. dollars. We don't have a backup system of anything. Our system, with its heavy dependence on electronic currency, in a hyperinflation would not do well. It would probably cease to function very quickly. You could have disruptions in supply chains to food stores. The economy would devolve into something like a barter system until they came up with a replacement global currency.
What can we do to avoid hyperinflation? What if we just shut down the Fed or something like that?
We can't. The actions have already been taken to put us in it. It's beyond control. The government does put out financial statements usually in December using generally accepted accounting principles, where unfunded liabilities like Medicare and Social Security are included in the same way as corporations account for their employee pension liabilities. And in 2008, for example, the one-year deficit was $5.1 trillion dollars. And that's instead of the $450 billion, plus or minus, that was officially reported.
Wow.
These numbers are beyond containment. Even the 2008 numbers, you can take 100 percent of people's income and corporate profit and you'd still be in deficit. There's no way you can raise enough money in taxes.
What about spending?
If you eliminated all federal expenditures except for Medicare and Social Security, you'd still be in deficit. You have to slash Social Security and Medicare. But I don't see any political will to rein in the costs the way they have to be reined in. There's just no way it can be contained. The total federal debt and net present value of the unfunded liabilities right now totals about $75 trillion. That's five times the level of GDP.
What can we, the people, do to stop the government from, you know, taking all our money?
We should have acted 20 years ago. There's not much you can do at this point to prevent the eventual debasement of the dollar. This involves both sides of the political spectrum. It's not limited to the Republicans or the Democrats. They've both been very active in setting this up.
What can individuals do?
The only thing individuals can do now is look to protect themselves. I wish I could see a way, but shy of severe slashing of the social programs that is so politically reprehensible and would create such problems and social unrest, I don't see that as a practical solution.
If you're a young 20- or 25-year-old guy or gal, would you move to another country? What would you do?
We still have a great country. We're going through a period of economic pain. It's happened before. This is the kind of thing that's taken us decades to get into and it will take us decades to get out. Although the hyperinflation is going to be limited largely to the U.S., the economic downturn will affect things globally. I can't tell you how things will go with a hyperinflationary Great Depression, which is where I see things going.
It's the type of thing that will tend to lead to significant political change. People tend to vote their pocketbooks. You could have the rise of a third party. You could even have rioting in the streets. I'm not formally predicting that — anyone can run these different scenarios. For the individual, what you need to do, from an investment standpoint, look to preserve your wealth and assets. Don't worry about the day-to-day fluctuations in the markets. What I'm talking about here is over the long haul...
[Gold is] going to be highly volatile, as will the dollar, over the near term, but longer term, physical gold I would look at as a primary hedge for preserving the purchasing power of your wealth and assets. Maybe some physical silver. Get some assets outside the U.S. dollar. I might even look to move some assets physically outside the United States. The key here is to look at a longer range survival package, battening down the hatches, and preserving your wealth and assets during a very difficult time. Once you're through that, you'll have some extraordinary investment opportunities, and I can't tell you what it's going to be like on the other side of this crisis.
168 Comments from the Fairfield County Weekly
If you're a college grad, South Korea is a fantastic place to be, working as an English teacher. The people are incredible, the lifestyle and food are healthy (except for the soju), and the money is good...
ESAD.
This isn't going to end well.
You will need guns and a lot of ammo. We are on our own. Get out of debt, be liquid and keep your passport up to date.
Nobody can predict the future. I doubt it will be that bad.
http://www.numbersusa.com/change/immigration/numbers/
What an idiot.
It's the quisling supporters of the traitors in DC that need to be rounded up. The dollar is finished because of them, not "gold bugs." G
Go ahead, you idiot quisling supporters of global trade and the fiat currency system--leave your stuff in paper assets. The gold bugs have lots of guns and ammo also to protect their solid currency when you have nothing left except dollars for toilet paper, and dry marijuana fields.
My Father served in WW2 as a Navy man on a tanker. I was taught to love my country, which I do. I was taught that we live in a Representative Republic, meaning that the majority must be heard on concerns of national interest. That means the people We the People put in office MUST vote our way. In terms of obamacare they have not, as unfortunate as it is. Therefore all who misrepresented the American people must leave office, not by votes, by impeachment now!
Every poll showed us that America does not want government controlled healthcare. EVERY poll. From 49% against to 70% against. Write your Congressmen, tell them that you will do all you can to end their term in office. If you lasted this long reading this you are as serious as I am.
I live in Illinois, and we have a saying here; Dick Durbin. ( Before he dicks you.)
Essentially, people work for pennies an hour, but because they are fooled by the face value of the currency they actually believe they are making a certain amount of dollars per hour. When a $10 Bill has the purchase value of about 30 to 40 Cents then it can easily be seen just how devastating such a system of fiat currency really is, not only socially, but economically. It is not only the currency that is depreciated, but the economic efficiency that is depreciated, the power of a country's currency directly effects the economic productivity of that country. As the purchase value of a currency is diluted through inflationary depreciation the economy becomes dependent upon the only power that can keep it running and that is the government's central planning powers, but that can only last for just so long before its ability is also depreciated in potency. Effectually, we are a Peonage, Serfs who labor for little in return. We have a vampire economy where the government siphons off productivity in an effort to maintain the system as a whole.
At one time, when our money was actual money property, a person held Allodial Title to the money he or she earned, today we have Fiat Notes that bear no promise of redemption. Today, money is not the property of the people it belongs to The State apparatus and The State cannot keep the feeble promises it makes so easily. Politicians, on whole, lie and voters still believe their lies, that will soon end as the promises the politicians make fall on deaf ears.
There are only two types of human beings.
One type just wants everyone to leave everyone else alone and these humans are students and advocates of the Philosophically Mature Non-Aggression Principle.
The other type refuses to leave others alone and these humans are the Mobocracy Looter Minions with their hords of bureaucrats, jackboots, and mercenaries that perpetuate the perpetration of the loot and booty gravy-train. Please help us and yourselves by ending the rob-peter-to-buy-paul's-vote bread and circuses of the doomed Amerikan Empire.
You are either the one...or the other.
The John Galt Solution of Starving The Monkeys is the only solution. Stop funding and forging your own chains and shackles. What are you leaving for your children, grandchildren, and humanity!?!
The Mobocracy Looter Minions must be allowed to consume everything around them, then each other, and finally themselves. There is no other way. Ayn Rand wrote about it over fifty years ago and it rings as soundly today as it did then.
Get your copy of Starving The Monkeys by Tom Baugh today, before the book is banned and the author is hunted down and Vince Fostered!
Sincerely,
John and Dagny Galt
Atlas Shrugged, Owner's Manual For The Universe!(tm)
http://www.starvingthemonkeys.com/
http://voluntaryist.com/fundamentals/introduction.php
http://marcstevens.net/
http://www.freedomainradio.com/
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My mother grew up in the Great Depression in rural North Carolina. At that time, people had skills. Her father would resole their shoes which were bought each year with the funds from butchering and selling a hog, and her mother would beat flour sacks until soft to make small dresses for her and her two sisters.
Most of us now face depression without the skills to grow our own food, repair our clothes, heat our homes, or draw water from our own wells.
This one may be worse.
Dear Editor: I am 8 years old. Some of my little friends say there is no Ron Paul. Papa says "If you see it in The Sun it's so." Please tell me the truth; is there a Ron Paul?
Virginia O'Hanlon.
Virginia,
Your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except they see. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men's or children's, are little. In this great universe of ours man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.
Yes, Virginia, there is a Ron Paul. He exists as certainly as peace and freedom and prosperity exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Ron Paul! We should have no enjoyment, except in sense and sight. The eternal light with which liberty fills the world would be extinguished.
Not believe in Ron Paul! You might as well not believe in the Constitution! The media might hire polling firms that conceal Ron Paul's true level of support among the people, but what would that prove? Nobody can conceive or imagine all the wonders there are unseen and unseeable in the world.
No Ron Paul! Thank God, he lives, and he lives forever. A thousand years from now, Virginia, nay, ten times ten thousand years from now, he will continue to make glad the hearts of free men.
Perhaps the line above should read, "Papa says, 'If you see it at LRC it's so.'"
Regards,
Darren McPhilimy
Tarentum, PA
"Junk" silver - that is pre 1965 US coins are a great safety net and still inexpensive. Interestingly, a silver quarter or dime still buys pretty much the same thing it did in 1964, maybe even a bit more.
Ammo is good even if you dn't have a gun. Stock batteries, go to a warehouse club and buy bulk batteries. I just got 48 packs of AAA for $6 at BJ's and they have a 12 year shelf life, You can always barter with those. Also liquor, salt, sugar, flour, get warehouse club packs of ziplock baggies to make standard packs to trade. Motor oil, again get big cases, it stores for a long time. Also socks buy 6 packs socks. I got a 6 pack of Champion white socks at Costco for $5. Also Cheerios in bulk, vitamins. Anything that stores.
These items are what we call a "store or value" not perfect as money but better than FRN's that will become toilet paper sooner or later.
I figure bartering and another underground currency will be used to avoid high taxation and inflation. It comes down to the creativity solutions individuals will develop and the masses pick up. So it comes down to being alert to your surroundings.
Forget your government solutions which have inflated you to this end for solutions. Inflation is delaying your debt today for a bigger one tomorrow. Just a matter of time before the bill is due. Welcome to the party of ingenuity that is coming and allows my ingenuity to be rewarded again.
It was a theory that all computers would crash at the beginning of year 2000 because of the way they had been programmed.
How Best To Deal With Hyperinflation.
Well, we are social beings so we need to begin developing our social network of persons who are free from religious prejudice and who recognize the beauty of classical liberalism.
It is these cells of unity and justice that will protect private property rights, identify and use a commodity money, educate one another, and assist one another.
These cells are the nuclei of the future diverse classical liberalism societies that will compose the peaceful and prosperous worldwide classical civilization.
Posted by Elaine on 12.24.09 at 21.37 "
Elaine, you are correct. Except, it is a lie that you have to give up your gold because fat bureaucrat said so. Don't even acknowledge you have any. The big secret about FDR is that only the dumbest gave up their gold. He failed to collect most of the gold.
First of all the going advice is "get out of debt" /// What for? if the dollar tanks you will be paying your debts with a cigarette pack. In South America for a long time the trick was to borrow so that inflation took care of the debt. Don’t walk out of the house and leave it.. just stay till you are kicked out. Maybe pay once in a while a bit (about the rent you would pay in some other place) If things happen like John William says debtors will capitalize themselves and settle their debts with peanuts. I repeat, this was the going game in many countries of South America
Second, if you want to hurt the ruling elite STOP BANKING AND USING BANKS. Turn your money into cash as soon as it is credited and boycott the banks. Pay cash. Junk your credit cards and do not consume with them, much less finance yourself with them as they charge outrageous rates... that is unless you plan to stick them with the unpaid balance. This way you will turn the fractional reserve banking trick against them as one dollar out of the system means 9 dollars that are called back in form the system.
Third, barter using your own skills and trade even if it means using the worthless money as a reference for short periods of time. This means do not bill your goods or work. Request cash. This is called underground economy. They want to steal your money from you for their convenience. Learn how to keep it to yourselves. South Americans use this a constantly.
It is not a sin to avoid paying dues to the government mobsters.
The government-critters are playing the game for themselves and their minions. Do you want to keep feeding them? If everybody does it they do not have the means to control and coerce.
Keeping alive and well means you will be able to fight the battle and be there alive and kicking and when the recovery time comes you will be positive for it.. If you follow their system you will be in misery soon and worthless. Pull others into this club.
In order to devalue the dollar they simply need to issue money that is not backed by any debt (printing). While this would probably cause interest rates to ramp upward as existing debt becomes worth less, it would be this simple and it would ease the burden of debtors (like the US Gov't).
broken, keep wailing on
If there had been nobody hording real money, the country would be even poorer.
Teach English in China for 20 hours a week, and learn Chinese for 20 hours a week.
Think 10 years down the road when times are tougher and a skill that will set you apart from the pack.
After hyperinflation hits and every stupid solution has been tried and failed, the government may want to go back to a gold backed currency (the way the Weimer Republic switched to asset-backed Rentenmark). The irony is that while the original gold confiscation was carried out to go off the gold standard, this time it might be done to go back to the gold standard.
http://www.naturalmoney.org/introduction.html
If someone brought a 1/10 oz gold coin to the bank in the year 1 AD, and the money remained there until the year 2000 AD, collecting a yearly interest of 4%, the amount of gold in the account would have been 3.6 * 10^31 kilograms of gold. This is 1.9 * 10^27 cubic metres of gold weighing 317 times the complete mass of the Earth.
An ever increasing amount of debt is needed to pay for the interest on the money. At some point this leads to crisis.
Wow..............what an ignorant cuss. I am not from the US thankfully but have been warniing family there for 8 years. Now they have no house. Hmmmmm gold was $280.00 when I dug in and have made $800k so far.... Paid off my house at 30 now 44.......how can a guy go wrong with this plan.....WAKE UP CLUELESS WONDERS.
Great logic there... rofl.
Read the Epiphany Deception. DeceptionDay.com
Pat,
Great going bro.
I hope you have reinvested that into waht you made it from.
And, other barterable items/
I know not wher you live, but if posible, relocate to a sparsely populated friendly area........and take you families to saftey.
This Dude is going up in smoke soon, sooner tha anyone thinks.
I assume your out of USA.
But, are you & yours safe.........................
Like you I am debt free, for what that matters.
But, am still stuck USA.
Familiy.
Folks, if you cannot afford to move, at least stock up on Non perishables, and tradable commodities, and do not tell ANYONE what you have,where it is, or your plans.................
You have God,Faith, guile, and wisdom, You, and your nuclear family.........that's it.
Your best friends will turn on you like rabid animals, IF they are not preparing, and know you are.
Keep your plans, and mouths SHUT.
The problem with this idea is that they don't have any money. They lost money, got more from the government, and now it's gone. You can go after them but you can't get blood out of a turnip.
Posted by Gulrez on 12.24.09 at 7.02 "
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No, it was numerous rational and well reasoned warnings over the decades that it took to create this obvious and avoidable result. Now it is finally here! And for ignoring these warnings, still, right up to the moment of the crisis, there will be no sympathy for the catastrophe that befalls the lives of the arrogant and the self-imposed ignorant.
In an era of agenda that supersedes reason it is more important than ever to be reminded that, either you deal with reality, or it shall surely deal with you.
----
BUY SILVER!
Citizens of USA standard of living is unreal high and cannot be supported even with two current wars and one hundred military bases around the world. US dollar reserve currency more properly US dollar empire is coming to the end. This was visible many years back. I applaud people who protected themselves from Rubins , Paulsons and central banking elite by buying tangible assets especially gold and silver. The minute one makes such investment they vote against big government crooks, wall street gang and central banking elite.
Current paper money Counterfeiting worldwide will end with hyperinflationary disaster.
After that peacefully or not honest money system will be introduced. Every unit of goods consumed will have to be paid with honest money. Such system does not need central banks and present legions of such bankers. Sorry boys you will be unemployed. Will they relinquish this privileged status easily ? Not a chance. Same goes to Big Government. More on that from: Gerald Celente predictions.
In all truth come to Canada ...exchange ur soon to be worthless US greenbacks for muli-coloured Canadian loonies! You'll be happy ya did! It all seems very sureal but the truth is that this crash has to happen everything points to this sad conclusion ....just follow the logical next step in this saga and there simply cannot be roses at the end of all this.
Then things really got rolling With Greenspan, CFR, encouraging ARMS and Equity loans. The Bushes, CFR continued to disarm any real regulation...
Now we have George Soros, CFR with his protege, Obama, along with Biden, CFR, and the old gang back, Rubin,CFR, Summers, CFR et al continuing to destroy our economy..
Is it possible to pin the tail on this donkey??
Are all these members of the same group acting alone??and mysteriously having a huge co-incidence??
Does this quack like a duck? Look like a duck?? and smell like duck Poop??
Sure, we've handled our banking better, perhaps, but personal debt is as bad up here as it is there in America! As a fellow Canadian, it is ludicrous to think that if the USA tanks we won't be affected. Sure, our banking system is more liquid and at least solvent, but 80% of our trade is with our southern neighbour! So, expect some serious repercussions up here.
Further, Carney is an American banker who was put in place to be the Bank of Canada's governor during this time of change as the USD dies and a NEW NORTH AMERICAN or perhaps GLOBAL currency is developed....further socializing Canada. Far fetched, perhaps...but when unemployment goes sky high and if martial law is established, solutions will be sought...A new global currency is coming and it is not the Canadian dollar, but some new digital hybrid.
That all said, this slow motion train wreck can be drawn out over the years, and it will take another 1-3 years to feel this quantitative easing in the financial markets...So a good time to stock up on food and gold (and guns if you can...harder for Canadians in that regard, though).
Americans, get some assets up into Canada and out of Uncle Sam's reach, sure, but Canadians, be smart and get some assets outside of Canada. Our bankers and the BOC are just chapters of the banking syndicate that the BIS, IMF, Federal Reserve and US Treasury run.
Geographic diversification only makes sense...
If there's a run on anything it will be "physical currency". Just like COMEX is out of physical gold, the Treasury is out of physical paper. Citi's vaults are filled with mostly air. Your "wealth" is just a number you keep in your head, which you check on a website or a monthly statement (I'm assuming you're a little richer than a typical WalMart worker, who has no balance anyway). If the economy were to suffer any (further) major trauma, we would revert to using only paper currency.
Did you ever wonder what the best way to prevent US hyperinflation is? The banksters/Fed could put a hold on electronic transactions! This would immediately decrease the velocity of money dramatically, making the huge supply of "money" irrelevant. Everyone would line up outside the vaults, and the first 10 would get some bills, everybody else would be stealing and scraping from their neighbors. Nobody ever says it, but the banksters control not only the supply of money, but its velocity also!
Welcome to the Matrix.
You are ALL welcome, and bring your gold with you.
You are ALL welcome, and bring your gold with you.
We will become a third world country. High taxes and nothing from it. Worthless social programs, bridges and roads falling apart. Crazy high crime rate, that will be the new America.
Love Liberty,
Rebecca Iocca
www.iocca.us
When you accept a currency you accept the rules of that currency, including that the rules can be changed without your agreement. Want to work for dollars, spend dollars, participate in the dollar economy? You have given control to Uncle Sam. He gets to take those dollars back any way he pleases. Only Uncle Sam is not really your uncle, just a banker disguised as your uncle. Uncle Sam is caged, drugged and drooling. Lifetimes of labor have been traded for IOU's from confidence men.
It's time to starve the beast. Disinvest yourself financially and intellectually from this system which is slavery revisited and rebranded. Our capitalism offers the illusion of potential freedom in exchange for a constant infusion of obedience and resources. It has learned a lesson from religion. Give the population something to fear; hell, terrorism, financial collapse etc then convince the population you are the only one who can save them. Rebrand everyone and everything you don't agree with as "terrorists" and "evil" and "unpatriotic" and the con game is complete.
Basic human needs have been used as a trojan horse to introduce fascism in a way that makes us feel like we chose it ourselves.
Get ready for the Amero.
and will fight to get America back to whom it belongs to..
"we the people" !
Standard of living readjustment is in a process right now. So called developed west is on a losing end. It is most visible in USA. People in the know have been aware of this process for some time and successfully looted public purse. Most successful looters are wall street gang and their supporters in government. They are ready to abandon sinking ship at any given time. Only question “What are you, USA citizens going to do with your country?”
Here are some general questions that expose the problem.
Is it true that the banks have been bailed out because our money system is based on the biggest ponzai scheme in history and that to fund the existing debts new and bigger loans have to be created to keep the scheme going so if the banks didn't get those bailouts our money system would have collapsed ?
Also
Governments have the sovereign right to create money without interest so why have they passed the right to create money to private banks who then charge interest thus creating a debt that can never be repaid because they only create the principle, not the interest.?
Also
Governments and Banks state that inflation is controlled by varying interest rates but isn't the current monetary system inherently inflationary because you have to create more money (loans) to pay the existing loans so varying interest rates only increases or decreases profits because inflation will always be there ?
Read web of debt www.webofdebt.com and watch the money masters http://bit.ly/1ahmMl and money as debt http://bit.ly/20ahZK
http://www.321gold.com/editorials/harris/harris122709.html
As we exit the year, we are told the US is a laissez-faire free market economy and yet the US government is now the largest owner of housing in the US as well as the owner of last resort for some of the largest and completely insolvent US corporations. The Federal Reserve, a privately and anonymously owned and controlled corporation chartered with issuing the nations currency, were given the green light by themselves to transfer to themselves and their shareholders the people's wealth in the form of their future labor. The FED balance sheet has ballooned to become a junk bond warehouse as they overtly and covertly buy their own debt, immune from any sort of oversight, regulation or auditing and operating above the law. Along with that, increasingly coercive brute force measures are now routinely necessary to manage and manipulate so called "free market" asset prices which are cheerled by so called "financial news media" whose board members and management are all the same people who transferred the people's wealth to themselves. The corporate media party line idea of a "free market US economy" now seems like a distant memory and it all feels like systemic fraud, corruption, malfeasance and organized crime at the very highest levels.
“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”
Goldman Sachs: The Grinch who stole Christmas?
Goldman Sachs Sold Hot Air
Goldman Scam: Selling Bad Debts While Betting Against Them
Goldman Sachs' secret bets
Goldman Sachs secretly bet on housing crash
http://tinyurl.com/yas8gud
Q&A WITH KEVIN DUFFY AND BILL LAGGNER: Two hedge-fund managers predict the economy's next leg down. Shorting Goldman Sachs.
viewtopic.php?f=17&t=391&p=8913#p8913
Don't forget canned, dehydrated, and freeze-dried food. Also, a skill or skills that will prove useful to a new economy. Something in the repair or manufacturing area, items that people can use. Like leatherworking, gunsmithing, mechanic.
If only. Alas, no one in history has ever said anything.
and as I see it that is where much of the problem lies, along with the fed, Wall Street, AIPAC and other lobbies running Congress.
Nuke the Fed, Starve the Pentagon, abolish all lobbies and leave the social programs alone.
The reason :by 2050 according to Census US will be a minority majority country> The high school graduation rates mean this new majority cannot deliver the income to be taxed that America needs. Only way to do that is to improve the high school and college graduation rates of the majorities.
By Porter Stansberry <http://www.addthis.com/bookmark.php?v=20>
Dec 2 2009 9:10AM
www.dailywealth.com <http://www.dailywealth.com/>
It's one of those numbers that's so unbelievable you have to actually think about it for a while...
Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.
Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."
What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.
When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.
The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."
The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.
So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.
The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tonnes of gold (it is the world's largest holder). At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.
According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.
Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.
So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.
Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.
So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.
One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1% of its total reserves in gold.
I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory. Coincidentally, the New York Times repeated my warnings – nearly word for word – a few weeks ago. They didn't mention Greenspan-Guidotti, however... It's a real secret of international speculators.
My readers know that Greenspan-Guidotti means the U.S. is likely to have a severe currency crisis within the next two years. How high will gold go during this crisis? Nobody can say for sure. We've never been in the situation we are now. The numbers have never been so large and dangerous. But I wouldn't be surprised at all to see gold at $10,000 an ounce by 2012. Make sure you own some.
Good investing,
Porter Stansberry
I highly respect your work, but don't flatter yourself Mr. Williams.
The Zimbabwean Black Market wasn't solely using US dollars, British Pounds or South African Rand.
"Gold is money and nothing else" - J.P. Morgan testifying under oath to Congress before the Pujo Commission, 1913
This is a video illustrates 'in action', the above quote, which the Zimbabwean Black Market took as payment:
http://www.youtube.com/watch?v=7ubJp6rmUYM
To force a woman to have an baby that she does not want is to make a slave of her.
A lot of men are against abortion, but they don't have to carry the baby to term, have the baby, and then carry the responsibility of that human for the next 20 years or so. Men can impregnate a woman, then walk away forever, not taking any responsiblity at all.
The billions of humans already on the planet are destroying our earth. We don't need more of them.
To force a woman to have an baby that she does not want is to make a slave of her.
A lot of men are against abortion, but they don't have to carry the baby to term, have the baby, and then carry the responsibility of that human for the next 20 years or so. Men can impregnate a woman, then walk away forever, not taking any responsiblity at all.
Some might say that a woman should not have gotten pregnant if she does not want a child, but human nature being what it is, there will always be unwanted pregnancies.
The billions of humans already on the planet are destroying our earth. We don't need more of them. Posted by Proabortion on 12.27.09 at 16.41
AS MORE PEOPLE GO TO WORK--THE MORE FEDERAL INCOME THERE WILL BE.. THERE IS PENDING FEDERAL TAX INCREASES COMMING---ALSO FEDERAL SPENDING IS BEING CUT..
AS ONE POSTER SAID THIS HAS HAPPENED BEFORE, AS IT WILL HAPPEN AGAIN. BUT IT WILL NOT BE AS BAD.. BLAME LOW INTREST RATES THAT CAUSED THE BUBBLE.
THEN BLAME BANKERS--AND THERE EASY MONEY MAKING WAYS..BLAME WALL STREET---
OBAMA NEEDS TO WACK WALL STREET AND INSURANCE COMPANYS HARD----
THERE NEEDS TO BE ADDTIONAL TAX INCREASES..
NOTHING COMES FOR FREE, AMERICAN PEOPLE ARE UTTERLY SPOILED...
THANK YOU FOR YOUR TIME.
I AM GOING IN THE BACK YARD TO HANG MYSELF, WHAT AM I SAYING, I HAVE NO BACK YARD.. I HAVE LOST EVERYTHING..
SEE-YA
I WILL BE IN THE ISLANDS.
Where is the outrage?!!? Well, it WILL come and when it does that will be a GOOD thing as problems will be addressed and solved. I concur with the other poster who said the people at the Fed etc should be put in prison "AT BEST" lol
People need to wake up and identify the EVIL in our govt and the puppetmasters who OWN it. Learn more about the REAL special interest groups. They have names like CFR, Bilderbergers, PNAC, etc. Most of them are dual citizens with allegiance to that tribe from that crappy strip of land near the Eastern Mediterranean.
As for gold, it is the only thing that will protect you as the U.S. dollar implodes. If you are too stupid or too uninformed to believe that, you deserve all the misery that will most surely be yours. If you want to make a fortune and are intelligent enough to do so, buy gold stocks now while they are still so very cheap. In the near future they will sell for hundreds of dollars a share.
what I do not get: the US-Dollar is supposed to "hyperinflate" against what? The Yen, the Euro, Gold?
In Weimar Germany, Argentina and Zimbabwe the problem were the debts denominated in foreign currencies. The US has no such debts.
I used to believe in such theories until Sept. 2008 taught me the power of deflation and the true meaning of "world reserve currency".
I`m not saying the US-Dollar is great, but I can`t see how the Euro and the Yen, let alone the British Pound (there you have the main constituents of the Dollar-Index) is any better.
A Ron Paul Fan
http://www.youtube.com/watch?v=tbFPWIldtfA
A bit of a contradiction here. Should this have said: “Is this a great country or what?”. The country is broken because the Constitution didn’t address the FACT that the smartest amoral scumbags can purchase politicians and steal loot from the peasants. Oh well, one of dude who wrote the Constitution said that when it no longer works for the people, it’s time to change it. I wonder if REAL Mericans are smart enough to do so.
They violate the 1st Amendment by fencing-in demonstrators at G-20, banning books like “America Deceived” and trying to take-over the internet.
They violate the 2nd Amendment by confiscating guns.
They violate the 4th and 5th Amendment by wireless wiretapping.
They violate the entire Constitution by starting undeclared wars.
Impeach Obama (and sweep out the Congress, except Ron Paul).
[Link of Banned Book]:
http://www.iuniverse.com/Bookstore/BookDetail.aspx?BookId=SKU-000083883#
As for this BS that the pensioners ect are entitled to their social security benefits or other government gifts, I do not see it. Lets liquidate that program fairly. Pay each participant exactly the amount of money they really paid into the trust fund. When people see what a small check they get back, perhaps then they will see that social security was only a way to buy off voters.. I personally feel no obligation to pay for somebody elses comfortable retirement. I will never see a dime from social security yet I am expected to pay into this ponzi scheme? My children are born into debt to pay for somebody else to live it up? I don't think its right. Why is it that we are not expected to save and plan for our own retirements? What about medicare and medicaid? By proping up the medical industry and giving it a massive subsidy, the government makes the cost of healthcare go up. I say eliminate this vice too. Otherwise it is not fair. If we want cheap healthcare..draft all the healthcare workers into the army tomorrow...tell them the only difference they will have in their lives is that only Uncle Sam pays their salary and that they are expected to see everybody who walks in their door..nationalize and confiscate all of the medical facilities and the pharmacy manufacturing companies. take the profit out of it and medicine stops being a "big business" if there is no profit in it then the paracites who profit by your suffering are out of the loop and then medicine will be about helping people. I bet it would not cost any more to do this than to keep what we have now..Look at the skyline of any big city..the skyscrapers are all insurance companies and parmacutical giants..take em down or regulate these vultures like you would a utility company..they are a vital service and should not have the power to dictate the terms of your existance. If we want socialized medicine make it a full government service..Otherwise we are just enriching the pigs at the feeding trough with our tax dollars while the people get nothing out of their own money that the government is spending. Sure its socialism..so what... at least it would be fair socialism where everybody gets a benefit..our current system is also socialistic..we the average stiffs pay for the benefits for the elderly, the poor the illegal and the veterans now..that IS socialized medicine, however, because I am not in a special group..I am denied service if I walk into the hospital, even though I am paying for medical care through my taxes, I am not entitled to get any benefit from it. Therefore I am being ripped off..Tear down the system and let the hyperinflation purify the system and the sooner the better.
Our government is so deep in debt that it needs to squeeze every last dime it can out of each producer. If the time ever comes when barter is a necessity, it will most likely be made illegal.
Tax avoidance, refusal to pay your fair share, will likely mean prison time and forfiture of property. Taxes are too serious of a matter for the government to play around with old rules and regulations.
How will the government find out about your secret bartering?
From the other barterer that collects the big reward for turning you in.
Yes, I know, I'[m crazy.
10-20 years form now, ,just remember where you heard it first.
China sees we are broke.. they might try rolling tanks
into California and Texas.. lots of them.. We all need
guns and ammo on hand for each family member....
Washington D.C. should give us support on this,,
but they act like only cops should have weapons....
If this ever happens , our military will need our help...
Just like the " Red Dawn " movie...
If the doller is devaluated, the whole world will suffer.
Since China is the greatest exporter, in order for them not to have an inflation because of all the money they making, they invest into US Treasury-Bonds. Now doller devaluates, Yen hits an inflation, now they have to charge more for exports, the imported countries have to pay more. that is a small example of scenario that might happen if doller devaluates.
Sure we(US) is going to hit a high Inflation, sure the population will suffer. But Devaluation, and Anarchy?? Cmon you seen too many movies with Kurt Russell "Escape from NY" and"Escape from LA"
Look a country like Russia, they didnt have anarchy when there currency dafaulted. Sure it was a crazy time or place to live, a lot of poor people, a lot of crime. but still no ANARCHY!!! and they managed to live through it.
To be a good member one may simply make others you meet aware of the existence of the www.campaignforliberty.com site and the pro freedom movement.
Most politicians take an oath to preserve the Constitution but ignore its limits. They think they can enact any law if they get the votes regardless of the fact that Article 1 Section 8 enumerated the only powers granted to the Congress.
The Campaign For Liberty intends to enlighten our fellow Americans and replace the politicians with those who will keep the oath to uphold the Constitution. Note that only gold and silver coin are legal tender (see Article 1 Section 10)
Join us and help us double and redouble our membership.
www.campaignforliberty.com
http://theamericanapocalypse.blogspot.com/
what I do not get: the US-Dollar is supposed to "hyperinflate" against what? The Yen, the Euro, Gold?
Answer: GOLD.
All paper currencies “involved in competitive currency devaluation” will inflate against precious metals.
Last 10 years US$ lost 70%+ its value against gold.
This is why gold leasing program was enacted to suppress gold price by central banking cartel.
GATA organization well documented this event for the last 10 years: http://www.gata.org/
Little plus for Keynesians: Maynard Keynes used “barbarous relic” expression towards Gold Standard not gold itself.
Here is what happened recently when $1100 USD Maple Leaf 100% pure gold coin was offered at face value 50 Canadian Dollars , somewhere in USA.
http://www.youtube.com/v/Gk5aRIz17fk&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&feature=player_embedded&fs=1
Who would riot if we made the entitlement cuts necessary?
hint IMMIGRANTS, aliens & their kids, they are the 800LB social services gorillas standing in the room that everybody refuses to notice.
When you deport aliens you also deport their unfunded liabilities.
Very interesting comments. I just had a few questions:
1) Canada: If/when the U.S. experiences hyperinflation, etc, etc., in 1-3 years, will Canada be affected just as badly? As a Canadian resident and citizen, should Canadian themselves be looking to accumulate Gold and/or Silver? Why or why not?
2) If/When the U.S. economy tanks, and the USD becomes close to zero (while Gold becomes upwards of $5,000 an ounce), will there be any countries in the world that WON'T be affected? How much of a GLOBAL impact will all of this have? Which countries should one move to if the U.S. tanks?
Thank you in advance.
Be wise, be prepared,
David
Watch the video of financial author of Rich Dad Poor Dad, Robert Kiyosaki on my silver snowball website, he and Mike do a good job explaining what’s about to happen, and why. Turn off the audio and scroll down the page and click the video.
http://silversnowball.com//cgi-bin/d.cgi/2074/order.htm
Costco has some good emergency food and water kits.
http://www.costco.com/Common/Category.aspx?cat=75277&eCat=BC|3605|75277&whse=BC&topnav=&hierPath=3605*75277*?=en-US
As well as THRIVE.
http://www.shelfreliance.com/shop/thrive
Be wise, be prepared,
David
www.cc2009.us
Yet, no matter what, NEVER forget that you are Americans and that Elvis is still alive!
The latter is fairly easy in a country that has lots of billionaires - tax those who can afford it.
I doubt that anyone could reasonably spend more than maybe 10 million bucks in a lifetime - so nobody will be hurt badly if people with more than that are heavily taxed.
There's the issue of fairness though - taking from some to help others, even if justified - does have some fairness implications.
However, take a look at how the biggest billionaires got their money, and you'll find a great many of them got rich by stealing from others (bank managers who caused the economy crisis and housing bubble), or by fraud (Madoff and friends), or other illegit means (such as Microsoft forcing people to buy a copy of their products with a computer even if they have no intent of actually using it).
It can't be wrong to make those parasites pay for what they did, by paying back what they obtained illegitimately plus a huge punitive fee.
This is just the beginning, once civilization collapses the Elves, Dwarves, and others will rise again in this world...
Look to the Sky and pray for a pre-trib rapture! Come Lord Jesus!
Read the Bible-New Testament and Revalation. We are the Last Generation and living on Borowed Time.
Resistance of NWO Norway
Be wise, be prepared,
David
The Dollar Bubble...
http://www.youtube.com/watch?v=eZA0qNsf4m0&feature=pyv&ad=3723781624&kw=economic%20collapse
The inevitable collapse of the dollar...
http://www.youtube.com/watch?v=4n3g5lUgkWk&NR=1&feature=fvwp
Move to the judge.
Step up to the banker.
Head to the general offices and board of directors.
Head to the mayors office and governors mansion.
Head to DC and finish the job.
The brainwashed idiots in the military need to knock of the BS and do what they swore to do.
Defend the constitution against all enemies, foreign and domestic.
The enemy is here. He has a badge, a black robe, or a limo driver.
1. Patriots: How to Survive the Coming Collapse (novel)
2. How to Survive the End of the World as We Know It (non-fiction)
The democrat or republican who promises the most stuff wins, and God forbid that either party suggests that we cut back on our excessive standard of living in America and get our house in order. So in my opinion it is way too easy to just blame the politicians that are in office for all the trouble that our give me, give me, give me American lifestyle is causing. Our generation of Americans need to grow up and start living responsibly, and then we will elect and support the politicians that will get the job done. Unfortunately, that probably won’t happen until we the people land face first on the concrete.
Be wise, be prepared,
David
Many Central Banks of the world are printing out of fear of being squeezed out in export market.
What follows is a description of the 4 stages of implementation of a decentralized exchange of value, starting with simple barter and ending with a robustly liquid market with totally decentralized monetary authority. This system is currently at stage 2 of implementation and is geared toward use by mobile devices such as the iPhone, Blackberry and Android phones.
http://environmentparty.org/node/39
I don't want people to be dependent on gold mining companies or gold price speculators or usurer bankers who print next to totally worthless paper notes and loan them to us at interest rates we can never repay for the actual productive work that we do. Currently we are working, providing goods and services just to be slaves to those who gave themselves the authority to print money. This is what I call modern slavery. I and others and hopefully you too want to put a stop to this. 'Our' politicians who are under control of usurer bankers will certainly not outlaw the corrupt banking practices we suffer today. We, the working class must regain the power to issue our own usury free currency.
We have some very good people working on this project. If you're interested and willing to help fund the development of this system so that we can deploy it sooner, please get in touch (tom.winnicki@sympatico.ca).
In early 2007 I warned of an impending stockmarket crash.
I confirmed a bottom by April 2009.
In mid 2009 I warned of an impending USD rally.
The equity uptrend since March 2009 has been a bear market rally contained within a much larger bear cycle that started in 2000.
Here's a excellent video interview with Bill Murphy of GATA.org
Be wise, be prepared,
David
http://goldsilver.com/player/id/17/cID/2/
If there is no physical money, then the govt. will know exactly how much you make and will be able to tax you on everything...
they will have the total controll over all of us.
People under water in credit card debt, on the other hand, are going to get fucked in the ass like they never thought possible.