For the past two days, I have strained to find the details of Wednesday’s debt ceiling “deal.” The MSM certainly won’t publish them; and frankly, I’m not sure they even know what they are – as Congress has clearly gone out of its way to avoid disclosing them. By the way, the deal was called the “Continuing Appropriations Act of 2014” despite being passed in 2013; as Congress had already passed the “Consolidated and Further Continuing Appropriations Act of 2013” in March. In other words, for the second time this year, Congress had to pass an “omnibus spending” bill in the absence of a budget.
For the record, it has been five years since the “Superpower” America has had a budget; and TRUST ME; one will NOT be passed by the new December 13th deadline. If the December 2011 “Super Committee” couldn’t shed a single penny from spending, this year’s “Bipartisan Conference Committee” certainly won’t. America is now a dependency nation amidst a miserable, expanding recession; and thus, cannot afford to stop spending one iota.
By the way, said “Super Committee” emanated from the August 2011 “Budget Control Act”; from which, two years later, we still have no budget – and not an ounce of fiscal control. In fact, we have $3 trillion more debt; and care of QE3 and QE4, record low interest rates with nowhere to go but up. Following that dud of a law – which “kicked the can” past the 2012 elections, we ran into the potential $150 billion of “fiscal cliff” cuts it mandated. Those cuts were subsequently reduced to just $85 billion by the New Year’s 2013 “fiscal cliff deal”; and afterwards, by substantially more when Obama arbitrarily decided air traffic control was sacrosanct. FYI, the name of that law – in which payroll taxes were raised for ALL, and income taxes for the wealthy; was the “American Taxpayer Relief Act.”
Better yet, the February 2013 “No Budget, No Pay Act”; in which the $16.194 trillion “debt ceiling” was delayed until May 18th, under the condition a new budget would be passed. When May 18th passed, there hadn’t even been discussions of a new budget; however, government was able to “freeze” the national debt at $16.699 trillion by utilizing the “extraordinary measures” documented in previous blogs. In other words, they used accounting fraud to delay budget discussions until October 17th; when according to Jack Lew, such measures would be completely exhausted.
In the meantime, the September 30th fiscal year-end passed with NO BUDGET; and hence, the “government shutdown” – in which, in reality, no more than 10% of government was actually shutdown. Finally, on October 16th, the aforementioned “Continuing Appropriations Act of 2014” was passed to end the shutdown; but contrary to the namesake of the February law, we still have NO BUDGET, but continue to PAY. As it turns out, the new law again “delayed” the debt ceiling, enabling Congress to spend without limit until February 7th; and as I anticipated, a whopping $376 billion was added to the national debt the second Obama signed the bill, pushing it up to $17.1 trillion. What will happen when the December 13th deadline for a “long-term spending plan” passes without resolution I don’t know. However, Congress will promptly take a three-week vacation that puts the new session right up against the January 15th deadline for a new government shutdown, and painfully close to the February 7th debt ceiling “drop dead date.”
Normally, this would be a problem; a la, what we just experienced. However, via the latest instance of the Constitution being gutted – with not a peep from the MSM – it will not be this time around. At least, not the same kind as the 2012 “fiscal cliff” or 2013 government shutdown issues. You see, unbeknownst to essentially ALL Americans – but NONE of the major Eastern governments – is the following BREAKING NEWS; which I ASSURE you will not “go gentle into that goodnight.”
Yes, deep within the bowels of the new law is a HYPERINFLATIONARY clause that officially commences the “debt ceiling to infinity” I forecast a year ago. In true Orwellian form, it was completely ignored by all but a handful; and kudos to “Dave from Denver” – in prior days, a good friend – for finding this “nuclear needle in a haystack.” One might call it the ultimate defeat for the Republicans, but I see it otherwise; as I believe America is becoming a one-party fascist nation; with the ambiguous terms “Democrat” and “Republican” around just for show.
When the February 7th “drop dead” debt ceiling date comes, it will pass with a whimper; as Obama was given ‘executive order status’ to veto ANY legislation attempting to prevent it from being raised. As it will now take a two-thirds majority in both the Senate and House to override his veto – something that will NEVER occur, America has, in reality, permanently shed its “debt ceiling.” As Obama believes raising the ceiling does not add debt, he will simply raise it with the stroke of a pen (as will ALL future Presidents). And thus, the ends of the last remaining hurdle in the path of HYPERINFLATION; as now, both fiscal and monetary policies are synchronized in pure “print and spend” mode.
Going forward, the stock market may or not repeat the early nominal gains of Weimar Germany equities; particularly with the PPT on its side. However, if it starts to “pull a Caracas” – and thus, go parabolic – it will be in nominal terms only. At that point, as in Weimar Germany, the ONLY assets to exceed the rate of inflation were Precious Metals. The Chinese already sense this coming – per the ASTONISHING commentary below from Andrew Maguire; and with gold forward rates again in negative territory with COMEX inventories at all-time lows, it’s only a matter of time before “the big one” commences. And when it does, either you will have your gold and silver, or you won’t!
The Chinese, through Shanghai, have already absorbed the bulk of all 2013 global mine production, if not all of it. In July alone, Shanghai gold imports exceeded those of the entire year of 2012. We also know that official Shanghai gold deliveries have accelerated since that time.
Last week I reported the September numbers to you, and it was over 225 tons of gold being delivered. But as of today, for the 9 delivery days of October, we already have over 101 tons of gold delivered. This is an incredibly powerful and diverse underpinning for the price of gold.
–King World News, October 18, 2013