As I expected – nay, knew – a “deal” was cobbled together to avoid a technical default on the U.S. national debt. Not to mention, avoiding the termination of food stamps, social security, Medicaid, and the myriad entitlements utilized by more than half the citizens of our “dependency nation.”
Actually, I was proven correct on all fronts; as weeks back, when this “crisis” commenced, I said there was NOT A CHANCE the government would be shut down – or the debt ceiling stifled. Regarding the latter, it decidedly wasn’t; and as for the former, in hindsight it wasn’t shut at all – aside from a handful of national parks and monuments, to make some sort of demented point. Roughly 85% of all government jobs were unscathed by the “shut down” – considered essential to “national security.” Half of the rest were arbitrarily “recalled” by the Pentagon after but a few days – again, under the guise of “national security”; and now, we learn, last night’s deal generates back pay for every furloughed government worker. In other words, 400,000 workers simply received a taxpayer-funded two week vacation!
In the end, as I have predicted for weeks, the Republican gambit to defund Obamacare was a miserable failure; not just procedurally, but in terms of the credibility hit this already dying party took. Mind you, I am neither Democrat nor Republican – but instead, an “equal party hater.” However, I call a spade a spade; and when it comes to politics, the Karl Rove theory of relentlessly attacking one’s opponents with propaganda – and in many cases, lies – have worn out its use, and then some.
As I have stated countless times, the Republicans are the “party of the rich”; and since “99%” of the public is – at best – lower middle class, the GOP’s days of power are OVER. In fact, I wrote earlier this year of my belief that eventually, all American politicians will embrace populist “liberal” platforms – like increased entitlements – in order to be elected; to the point that a one-party fascist government will emerge. Sorry Boehner, Obamacare is here to stay – as your beloved House of Representatives approved it in 2009 (by a measly five votes); whilst a Republican-controlled Supreme Court declared it constitutional in 2011, in perhaps the worst high court decision in American history.
As for last night’s eleventh hour deal, it takes U.S. credibility to an ALL-TIME LOW; quite apropos, as not only is Congress’ approval rating also at an all-time low, of just 10%, but only 13% of Americans believe the nation is headed in the right direction. Following last night’s “penultimate deal with the devil” – more on that in a minute – Chinese rating agency Dagong downgraded America from A to A-; while even Jamie Dimon – yes, the CEO OF JP MORGAN – admitted America’s debt problem is “virtually assured” to destroy it!
Back in February, when the “No Budget, No Pay Act” enabled the then $16.394 trillion “debt ceiling” to be exceeded – with no restrictions – until the arbitrary date of May 18th, I deemed it the most “juvenile” decision in Congressional history. After all, the 2011 debt ceiling crisis – yielding the stripping of America’s triple-A credit rating, among other things – had not resolved the nation’s problems in the slightest. With $2.2 trillion of debt since added, the “Budget Control Act” sequestration cuts of $150 billion were essentially cut in half by the New Year’s Eve “fiscal cliff deal”; and after that, by significantly more when the government arbitrarily decided that air traffic control and other “essential” activities could not be subject to the sequester. Said “debt ceiling delay” simply kicked the can further into 2013; i.e., an insult to the world’s intelligence, that was compounded further when the government spent May through October utilizing “extraordinary measures” to steal from Peter to pay Paul – and thus, hide further increases in debt that will be realized the second the debt ceiling is raised, perhaps by more than $300 billion. Since May 19th, the U.S. national debt has been “frozen” at $16.699 trillion; but rest assured, the REAL number, as we speak, is well over $17 trillion. And don’t forget the $5 trillion of “off balance sheet” Fannie Mae and Freddie Mac debt and $200 trillion of “unfunded liabilities”; although for the time being, the MSM certainly will.
Amazingly, with the spotlight of the WORLD on America’s hideous political and financial situation; not to mention, a plunging economy, as depicted by horrific earnings from IBM, a morbid holiday outlook from eBay, surging jobless claims, and the lowest Consumer Confidence and mortgage application readings in two years – prompting the Fed’s TOP HAWK, Richard Fisher, to state this morning that tapering is out of the question; Congress comes up with a “deal” in which few actual details were given. Talk about juvenile; and for that matter, insane!
If I see one more headline that the debt ceiling was “lifted” or “raised” until February 7th, I’m going to puke! What does that mean; i.e., WHAT IS THE NEW DEBT CEILING? To wit, I have also read the new deal does not repeal the extraordinary measures provision enabling the Treasury to use accounting tricks to avoid default. So, does that mean the debt ceiling has not in fact been “raised”; and thus, is simply being “delayed” again? Moreover, if Jack Lew claimed that today the Treasury has exhausted its last possible extraordinary measure, than what could possibly enable this process to continue? And if he is in fact correct; then pray tell, WHAT IS THE NEW DEBT CEILING? I mean, is there some kind of gag order on Congress and the MSM on that topic; sort of like not calling the Egyptian coup a coup?
Worse yet, this “penultimate deal with the devil” only funds the government through January 15th, and “extends” – or “raises”, “lifts,” or whatever vague term you choose – the “debt ceiling” until just February 7th, with a “budget conference” requiring a “long-term spending plan” (i.e., a budget) by December 13th. And oh yeah, a number of previously “mum” taxes – like those on medical devices and reinsurance – will be quietly implemented to further burden American taxpayers.
So let’s get this straight. The Dow surged 500 points in the past week on “exuberance” about a can-kicking deal that basically pushed this same issue just two months into the future; with a “drop-dead” deadline right after the holidays, just after the annual, month-long Congressional holiday recess. In December 2011, the budget “Super Committee” failed to produce a single penny of spending cuts – prompting passing of the “kick the can” Budget Control Act (talk about oxymorons!). But now, two years and nearly $3 trillion of debt later – with the GLOBAL economy in a vastly worse position – we’re to believe Congress will create its first budget in five years! And not just a budget, but one that vastly cuts spending when more than half of all Americans are on entitlements, with the Labor Participation rate at a 35-year low. If they don’t – and most likely, they won’t; the government will again be shut down on January 15th – with the same three week separation ahead of the new debt ceiling “drop dead” date of February 7th.
To say this “penultimate deal with the devil” is an embarrassment to America – and an affront to the world – is an understatement. However, if you think this is bad, just wait until the “ultimate” deal is cut in mid- to late January. At that point, I predict, any remaining shard of American credibility will be permanently lost. A world that is already openly revolting against American imperialism will no longer stand idly when Congress – and the Fed – give the “all speed ahead” signal regarding their intention to PRINT and SPEND ad infinitum. Last year, I warned of the coming “debt ceiling to infinity”; and if ever it were to come to pass, this January is the time – as the government will literally have NO MORE “stalling tactics” at its disposal.
This morning, Fed “uber-hawk” Richard Fisher claimed the FOMC’s hope to implement QE tapering was “swamped” by the impact of the government budget crisis; and paralleling those sentiments, Fed, PPT, and Cartel efforts to control markets with MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA will in time be “swamped” as well. In the case of Precious Metals, their fraudulent scheme will be undone by the inexorable PHYSICAL demand the Chinese and other wealthy nations will only accelerate, particularly given how ridiculously underpriced the Cartel has made PAPER prices.
As for today’s “markets,” the Dow Jones Propaganda Average opened at the PPT’s “ultimate limit down” of EXACTLY minus 1.0%; but as I write at 11:25 AM EST, has cut its losses in half – naturally. Treasury bonds are again surging, as no doubt the Fed’s “turboQE” operations are on full tilt – likely, at much higher levels than the published $85 billion per month; but dang it, the dollar index is plunging – down a full percent, to 79.6. Given how horrific European and Japanese fundamentals are, the fact the dollar index has fallen this far should SCREAM how numbered its days are as the world’s “reserve currency.” And when it goes, TRUST ME it will not be the Euro or Yen that takes its place.
Instead, it will be whatever new currency – presumably, some combination of the Yuan and Ruble – is backed by the most gold. This is how things have worked throughout history; and why ANYONE would believe the current situation is any different – in a world where ALL currencies are fiat-based nightmares experiencing spiraling debt burdens – is beyond me. This morning, TPTB are using every suppressive algorithm in their PAPER toolbox – including countless Cartel Herald caps – to prevent their six-week old “lines in the sand” at $1,320/oz. and $22/oz., respectively, from being taken out. But have no fear, they eventually will; as will the all-time highs of $1,920/oz. and $50/oz. in dollars – not to mention, the all-time highs in ALL world currencies.
Time is running out, as the “ultimate deal with the devil” is coming by late January. This is perhaps the most inexpensive – and available – Precious Metals will be to Westerners EVER; although unfortunately, the same can’t currently be said for Easterners. The next crisis will likely be “the Big One”; and thus, if you don’t PROTECT yourself now, you may NEVER get another chance.