It’s Tuesday morning; i.e., “T-minus nine days” to the supposed debt ceiling breach. For all we know, the U.S. government will simply ignore its own rules and keep borrowing and spending; as it did this weekend, when the Department of Defense arbitrarily recalled 400,000 employees furloughed by the supposed “government shutdown.” Heck, why not just pay off the entire national debt with a handful of “trillion dollar platinum coins”; which believe it or not, was actually proposed earlier this year.
The economy is a basket case, and the “shutdown” is making it worse – notwithstanding the above. Meanwhile, the debt ceiling fiasco is on center stage, as Democrats and Republicans continue to play political chicken with billions of lives. U.S. credibility has NEVER been lower; and frankly, could be irreparably broken if goose-stepping leaders like Obama and Boehner can’t cut a realistic deal (for whatever “realistic” is worth). Essentially EVERY nation on Earth is terrified of the ramifications of a U.S. debt ceiling breach, which is why they continue to whine on a daily basis. In a nutshell, ALL own too many dollars, Treasury bonds, and other dollar-denominated investments; and thus, are at grave financial risk if the situation spirals further. And why shouldn’t they – as there is NOTHING that can be done to prevent America’s inevitable – possibly imminent – financial death.
Even the Chinese are showing the “whites of their eyes”; as no matter how relatively strong their economy is (in my eyes, a debatable concept to start with), it could not withstand the near-term impact of a dollar and/or Treasury collapse. The comments below from Vice Minister Zhu Guangyao speak in a calm, cautious tone. However, I ASSURE you that behind closed doors, the Chinese Communist Party is amidst a state of panic; and likely, a veritable frenzy of PHYSICAL gold buying. The WORLDWIDE economic hell that will be released when the dollar fiat Ponzi ends will be truly shocking; and with 1.5 billion citizens to feed, such a tragedy will be felt by China as much as anyone…
We ask that the United States earnestly takes steps to resolve in a timely way before October 17 the political (issues) around the debt ceiling and prevent a U.S. debt default to ensure safety of Chinese investments in the United States and the global economic recovery
–Reuters, October 7, 2013
Despite this historically ominous situation – let alone, during the year’s most historically dangerous month – an eerie calm covers global financial markets; care of the 24/7 market manipulation that currently blankets them, of course. Oh yeah, and the fact the Chinese gold market has been closed the past eight days for a holiday – to re-open tomorrow. Global news flow has ground to a halt – particularly in the States, where the shutdown has shuttered most economic data; and most stock markets are just flat to slightly lower. The dollar sits near multi-year lows, but no one seems to care. Oil, despite its recent decline, is at $104/bbl. – i.e., its highest October level EVER; but care of the aforementioned market intervention, Yahoo! Finance’s top story is “Little Fear of Default on Wall Street”; while incredibly, the PROPAGANDA emanating from Cartel henchman like Goldman Sachs has reached epic proportions of lunacy. I mean seriously, can ANYONE believe such drivel?
Gold, set for its first annual loss in 13 years, is a “slam dunk” sell for next year because the U.S. economy will extend its recovery after lawmakers resolve stalemates over the nation’s budget and debt ceiling, Goldman Sachs Group Inc.’s Jeffrey Currie said.
With significant recovery in the U.S., tapering of QE should put downward pressure on gold prices.”
–Bloomberg, October 8, 2013
Moreover, the only chatter from Congress is the Senate proposing a debt ceiling increase without ANY corresponding deficit reduction plans! In other words, not even disguising the MONEY PRINTING as it did with the fraudulent Budget Control Act of 2011 – which to date, has produced a whopping $70 billion or so of spending cuts, compared to $2.8 TRILLION of incremental debt.
Better yet, Obama for some reason believes he is not required to negotiate the debt ceiling with Congress, despite it being constitutionally mandated. To him, the law of the land has become the “Executive Order”; and if anyone doesn’t see the horrific trend below, they deserve the fate they will receive for not PROTECTING themselves…
Obama, like Clinton, Bush, and all others before him, has forsaken every bit of sound judgment he had prior to taking office. The need to “kick the can” as far as possible – and thus, saddle future generations with even more untenable circumstances, has caused the government to abandon the very people that elected them. And thus, if anyone thinks Obama really believes raising the debt ceiling doesn’t increase debt, hearken back to his official “Congressional Record” of March 16th, 2006 – when he stated the following. And when reading it, keep in mind the national debt then was “just” $8 trillion, compared to $17 trillion today (plus $5 trillion of Fannie Mae and Freddie Mac debt held “off balance sheet”)…
Increasing America’s debt weakens us domestically and internationally. Leadership means that the buck stops here. Instead, Washington is shifting the burden of bad choices onto the backs of our children or grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.
By now, I think you get the picture that today’s themes are apathy, desperation, and most of all – failure. Failure to utilize monetary discipline for the past four decades; to take responsibility for one’s actions; and to represent the people’s best interests. And no entity represents failure like the Federal Reserve; which in 100 years of existence, has destroyed 98% of the dollar’s purchasing power – en route to its “ultimate destination” of 100%.
The roots of the current economic crisis – which historically, will be recalled as the terminal phase – date back to the 1987 crash, in my view. After 16 years off of the gold standard, that first financial crisis prompted the Fed’s new Chairman, Alan Greenspan, to embark on history’s most maniacal MONEY PRINTING spree. Initially, it created the 1990s internet bubble; and when that failed spectacularly, he and his protégé Bernanke simply turned up the volume on the printing presses. The resulting 2008 collapse permanently broke the global financial system; and thus, Bennie simply unleashed the “helicopters” to kick the can for one last mile.
When one views the sum total of Federal Reserve Failure, it is truly an awesome sight to behold. Awesome, that is, in its utter ineptitude in all matters economic; such as in the key issue of economic forecasting. This chart from the IMF depicts just how abysmal – and pathetically optimistic – centrally planned forecasting has been. However, NO ONE tops the “clueless optimism charts” like the Fed; which is eternally calling for a major recovery “next year.” Under Greenspan and Bernanke’s stewardship, the global economy has deteriorated to its worst level since the Depression; only this time around, the DEBT and INFLATION the Fed has exported following U.S. abandonment of the gold standard has created an unfixable situation that MUST end in default and hyperinflation. The more the Fed’s balance sheet grows – via ZIRP, QE, and other MONEY PRINTING schemes – the greater the level of diminishing returns; and thus, the worse the economy becomes…
…enriching only the 1% of Americans receiving such support – i.e., the Wall Street banks that own the Fed; at the expense of ALL OTHERS…
Remember, the Fed’s fiat Ponzi scheme can ONLY grow larger; and thus, can NEVER be tapered, let alone halted. Thus, ALL trends discussed in this article – i.e., debt, money printing, inflation, and totalitarianism – will ONLY expand until the Ponzi scheme inevitably collapses. If you stand idly and succumb to “normalcy bias” (with not that great of a “normal” to start with), you will be financially run over like the hundreds of millions that failed to see such signs in prior generations. However, if you choose to see REALITY for what it is – and PROTECT YOURSELF with PHYSICAL Precious Metals; you’ll likely not only survive the coming financial disaster, and thrive in the global economy’s subsequent incarnation.