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World risks fresh credit bubble, Switzerland’s BIS warns

Boehner: ‘Let’s Be Honest … We’re Broke’

IMF’s Lagarde warns against US fudge on fiscal cliff

Lagarde says ‘fiscal cliff’ threatens US supremacy

Normally I would not give the advice of “listen to them” when speaking of politicians but it looks to me like they are miraculously telling the truth.  John Boehner made the comment “Let’s be honest…..we’re broke.”  This is exactly correct.  Another politician Christine Lagarde of the IMF has warned that the U.S. not “fudge” the fiscal cliff and that this “threatens” U.S. supremacy, again 100% correct.  The BIS (the central bank of all central banks) has warned that “the world risks another credit bubble” which is only partially correct.  The fact is, the world is already in the biggest credit bubble of all time by way of sovereign credit and thus currencies having little real value yet investors have piled in forcing yields to 300 year lows.  A 300+ year high in bond prices qualifies as a bubble, especially when the finances backing the bonds are at their all time weakest.  Mr. Boehner should have sugar coated his statement of “being broke” by following up with “but hey, so is the entire rest of the world so what’s the big deal?”

I wanted to point out this flurry of “confessions” because I believe them to be simple frontrunning so when the time comes, “I told you so” can be the standard refrain.  What I think is happening is that they know.  They collectively know that the game is about to unravel because the “weight” of holding up the system is becoming too heavy.  I think that even with gross distortion of economic numbers the truth of what is actually happening cannot be hidden much longer.  Even those who are illiterate hear the word “recovery” and chuckle.  I think they realize that they cannot hold all markets up even with ridiculous leverage ratios.  I also believe that most everything even resembling “collateral” has already been used, used again… then over again and that very little is left to lever.  It may also be that “THE GOLD” is running or has run out.  If you believe Frank Veneroso”s numbers (which I do and have all along), we are now very close to the bottom of the barrel.  The West to East flow of Gold may very well be in its terminal stages which would cause a gross shutdown of trade which is bad for both West and East.

You must ask yourself “Why?” Why the flurry of “truth?”  I don’t see any upside at all for the snakelike politicians unless they are being forced into the truth.   A collapse of the system will leave them with less power so you can bet your bottom Dollar that this is not a case of them shedding their skins and growing a conscience.  Maybe I am wrong but can only see this as a “CYA” move because once the bottom falls out, fingers will point like laser pens.  I think the concept of “it’s better to point than to be pointed at” is now spreading across the globe.  Like I said, “listen to them” as they warn you because there is no upside to their personal careers in normal times to telling you the truth… and these are not only NOT normal times, this is the end of an era!