Treasury Secretary Timothy Geithner says it’s “unthinkable” that there would be a time when the U.S. couldn’t pay its bills. That’s why he says he’s confident of a deal to raise the government’s borrowing limit before an August 2 default deadline. He says the U.S. has a top credit rating and that despite all the rhetoric, there are signs that both sides are coming closer to an agreement. But he says the legislative process needs to get started by Monday night.
We are going to talk a lot about insanity in this essay and these declarations by Geithner are a good place to start. Look at this chart from the Office of Management and Budget. That’s a graphic image of the United States government’s swan dive into oblivion. That’s a straight line into fiscal hell. That’s the visual proof that the only reasons that Geithner is not taken away in a straight jacket is that he knows how to dress well.
Look at that chart again and let your imagination drop with that line that marks off the descent in two-hundred-billion-dollar amounts. That’s a lot of money! More accurately said, it was a lot of money but today $100 billion does not buy governments much since so much of it has to go to paying interest on debts and the insanity of war instigated by mad men who should not be allowed to walk freely on our planet.
Argentina’s President Cristina Fernandez, whose own country defaulted on about $100 billion in debt a decade ago, asked last week: "When did the American dream become a nightmare?"
The current reality, represented very clearly by the above chart, is that the American government cannot pay its bills, not with real money at least, only with the fabricated stuff, the kind of money that can be created out of thin air. Its funny money and it is taking the whole world down to a place where it will probably take many decades from which to recover.
Congressman Ron Paul said, “It isn’t too late to return to fiscal sanity. We could start by canceling out the debt held by the Federal Reserve, which would clear $1.6 trillion under the debt ceiling. Or we could cut trillions of dollars in spending by bringing our troops home from overseas, making gradual reforms to Social Security and Medicare, and bringing the federal government back within the limits envisioned by the Constitution. Yet no one is willing to step up to the plate and make the hard decisions that are necessary. Everyone wants to kick the can down the road and believe that deficit spending can continue unabated.”
“Eventually the American taxpayer will get so fed up with this bunch of morons in Washington—Republican and Democrat—they are going to demand we take real action with real numbers; cut through the crap and start dealing with this debt and we can do it. Why did we say in U.S., ‘the bondholders can’t be hurt?’ What the hell was that about? It was all mad!” said Howard Davidowitz.
It certainly is too late to return to fiscal sanity for it is insanity that rules the world, insanity that drives the United States government and insanity that runs deep in the psyche of the human race. We are a race of madmen though of course some are much madder than others.
Today we wake up to see the work of a super madman who gunned down 90 innocent boys and girls in Norway. The madmen who have run the pharmaceutical industry kill hundreds of thousands of men, women and children each year so it’s really hard to decide who is the most insane. In the United States alone over 100,000 die each year from properly prescribed medicine.
“President Obama and his allies in Congress believe they know better than you do what is in your own best interest,” writes attorney Jonathan Emord, which means “we have a bunch of morons in Washington” running roughshod over our future lives. As Emord tells us, they even want to control the food we eat so you really know that those running the show behind the scenes are truly mad. Monsanto, with their genetically modified foods, are in all likelihood creating a food Armageddon. In short, that company should be dissolved and its executives locked up for their violence against humanity.
Apparently whether the “little people” like something or not doesn’t matter now in this “new” world. – Daily Bell
There is little desire or regard for the middle class from the people at the top of the human heap because a big portion of their wealth is derived from robbing the lower classes. The Federal Reserve acts at the top of the line as the greatest robber of them all, raping the entire system to serve the people at the top.
“The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. “As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
Contemporary civilization has already committed financial suicide and we are now just waiting for the poison to take full effect but many millions are already feeling the poison flooding through their veins. The only answer the governments have been able to come up with to resolve the situation is to drink much more poison (debt) and ram it down the throats of their citizens. The future of the world is at stake and we have mad politicians at the helm so we do indeed have much to be concerned about.
“The banks of Europe are the new Feudal Manors and Masters. All Europeans now serve them as debt-serfs in one way or another. If we knock down all the flimsy screens of artifice and obscuring complexity, what we see in Europe is a continent of debt-serfs, indentured to the banks under the whip of the European Union and its secular religion, the euro,” wrote Charles Hugh Smith. The title of his essay was 500 Million Debt-Serfs: The European Union Is a Neo-Feudal Kleptocracy.
We are closing in on an event that will “set fire to the heart of the global financial system. The insolvency of the global financial system, and of the Western financial system in the first place, returns again to the front of the stage after just over a year of political cosmetics aimed at burying this fundamental problem under truckloads of cash,” writes GEAB.
The elites that stand behind the EU are trying to build a one-world order,and they will stop at nothing to get it. The same thing is going on in the U.S. with the debt crisis. An orchestrated agenda. The Americans will eventually get European-style austerity. They simply don’t understand the ramifications yet. – Daily Bell
There is a shock coming soon, probably in the autumn of 2011 where the collective experience will literally be the ground giving way beneath our feet as the underpinnings of our global financial system come apart.
As we head into the black hole of debt that cannot be repaid we will see the word default come up again and again. Jean-Claude Trichet had the word “default” stuffed down his throat last week and in the United States politicians are now, like tug boats, maneuvering the United States of America closer to defaulting on a mountain range of debt and liabilities that should never have been incurred by a sane society and government.
Karl Denninger writes, “When investors get nervous about stocks, they usually flow to bonds. Today, they’re not. They’re buying gold instead which is up just under 1%, or silver, which is up 3.2%…” During the next few weeks or short months even the blind will begin to see which way events are going to take us. Every tick upward of interest rates will ring the bells of doom since servicing trillions upon trillions of debt becomes that much more impossible.
Bloomberg published, “That consumers are increasingly “using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.” Silvio Tavares, senior vice president of the largest credit card processor said, “Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.” It is not only governments that are in serious trouble but an entire generation or even two generations that are drowning in debt and fiscal insanity.
The people of Brazil and Chile also have a cash-flow problem. Their banks were loose and easy with money they lent out because in some cases they have been collecting over 200 percent interest on peoples’ debts. There are perhaps a billion debt slaves in the world and we can count most countries within those numbers. Perhaps my numbers are way too conservative; there is no way to count but the situation is dire.
To make matters much worse for the near future of the American economy we and preview at end of the year seeing 3.7 million Americans stop receiving jobless benefits. This financial Armageddon for these 3.7 million families will be cruel enough for them but it will spill over to the wider economy—acting as a hit man to consumption in the first quarter of 2012.
That’s a lot of people to drop out of the bottom of society all at once. It’s the safety net tearing, allowing perhaps as many as 10 million men, woman and children to fall to total destitution. Now imagine what could happen if the United States government goes down and cannot pay for the food for its 40 million Americans on food stamps? Are you getting an idea yet of the bad endings that are possible for the American dream?
Down the Slippery Slope
In a recent Elliott Wave Theorist, Robert Prechter focuses on a different metaphor from sailing to explain what’s happening in the economy. He references the granite slope of Stone Mountain, pictured here for those of you who have never visited Atlanta.
Photo by JT
Excerpted from the June 2011 Elliott Wave Theorist
“Near Atlanta is a mound of granite called Stone Mountain. Over the years, people have fallen to their deaths because they allowed the mountain to fool them. There is no sharp cliff of which to beware. The slope is rounded. So, people sometimes sneak past the protective fence and edge their way down the mountainside, thinking that they have sufficient traction to remain stable. But when they pass the point at which they can hold on, the slope only increases, and they fall to their doom.
“This seems to me somewhat analogous to the economic depression that has been developing since the year 2000. It started out slowly, so that people didn’t even realize it was beginning. As the economy deteriorated, they didn’t worry much, because they thought it had plenty of traction. Periods of moderate stability increased their confidence. The quick slide of 2008 wasn’t fatal, because there was a convenient ledge to stop the fall. Today, it seems that 29,900 economists out of the approximately 30,000 in the world are breathing easier, thinking the mountain is safe. But just a few more steps downward in the economy and the slope will be too steep to keep it from going into a death slide.