- Will America ever pay back its debts? Obviously not! It is mathematically impossible. At 3% interest rate, a debt of US$100T will accrue yearly interest payment of US$3T. Total tax revenue is around US$2.1T. Even at its highest, it was just about US$2.5T. With deficits running way above US$1T a year, where do the Feds get the money to pay even the interest on debts?
- The answer is: they don’t. They just roll over debts ie refinance debts and now finance interest and debt capital payment with massive amount of Quantitative Easing, printing or electronically creating money out of thin air. This is a giant Ponzi scheme. It makes Enron’s Ken Lay look like an amateur. This is simply legalized counterfeiting.
- How will this end? The Illuminist plan is a global monetary crisis centred around the USD. When the USD collapses, many countries’ foreign reserves denominated in USD will crash overnight! Imagine having a US$100B of reserves and its purchasing power drops 50% overnight! You lose US$50B of purchasing power. This will impact responsible, hard-working and fiscally prudent countries like the Asian Tigers and China, a great deal.
- We should not however, think that only Asia will be affected. The USD is the world reserve currency. It is held by all countries in varying amounts because of the need to buy oil (which is bought and sold only in USD) and the needs of international trade. As much as 65-70% of global trade between countries is transacted in USD. When the USD collapses, the ramifications across the world is catastrophic. When half of the hard-earned reserves disappear overnight, many countries will no longer be solvent.
- I have no doubts that the Illuminist banksters will initiate attacks on countries via the forex market, the capital market and the bond/stock markets. Keep in mind that both the Euro and JPY are also dubious fiat currencies overloaded with debts that will never be paid back! We have the makings of one hell of a Big Bang coming up! Got gold yet?
“Enron Accounting” Has Bankrupted America: U.S. Deficit Really $202 Trillion
The Congressional Budget Office (CBO) forecasts the U.S. budget deficit will hit $1.3 trillion this year. An astronomical figure, to be sure, but that’s lower than was projected in March. It’s also less than last year’s record $1.41 trillion deficit, which was close to 10% of GDP. And, that’s the good news.
As the deficit grows so does the national debt, which is currently more than $13.3 trillion, according to official figures. But the situation is actually much, much worse, according to Boston University economics professor Laurence Kotlikoff.
“Forget the official debt,” he tells Aaron in this clip. The “real” deficit – including non-budgetary items like unfunded liabilities of Medicare, Medicaid, Social Security and the defense budget – is actually $202 trillion, the professor and author calculates; or 15 times the “official” numbers.
“Congress has engaged in Enron accounting,” says Kotlikoff, who recently penned an op-ed for Bloomberg entitled: The U.S. Is Bankrupt and We Don’t Even Know It.
Yet, the debt market continues to have an insatiable appetite for U.S. Treasuries; heading into Monday’s session, the yield on the 30-year Treasury bond (which moves in opposition to its price) was at its lowest level since April 2009.
Kotlikoff says that’s because the market is focused on the “mole hill” of official debt. In time, the U.S. will have a major inflation problem to rival that of Germany’s post World War I Weimar Republic, he predicts. “We have to think about the fact that unless the government gets its fiscal act in order we’re going to have the government printing lots and lots money to pay these enormous bills that are coming due over time.”
America is in need of major reform of the health-care, retirement, tax and financial system, Kotlikoff continues. “We need (to perform) heart surgery on this economy, not putting on more band-aids which is what we’ve been doing.” Barring that, your hard-earned dollars will soon be worthless, he declares.
- See also:
15 Signs The U.S. Housing Market Is Headed For Complete And Total Collapse
- QE 2.0 is a foregone conclusion. Bob Chapman says US$5T is likely to be the amount. When this happens, it is over for the USD! Of course, this is all part of the Illuminist plan to create the global currency crisis to drive the world to their One World Currency, Global Central Bank. They are likely to do this: IMF will become the global treasury department and BIS the global central bank. Both these organizations will report to the Global Luciferian Government.
- This article has quite a bit of technical economic jargon. It is an interesting perspective using Purchasing Power Parity (PPP) and Interest Rate Parity (IRP). Excerpts:
Why Quantitative Easing is Likely to Trigger a Collapse of the U.S. Dollar
….In contrast, quantitative easing can be expected to create a remarkably different situation. The Fed’s purchase of Treasury securities and creation of base money is occurring in an environment where fiscal deficits are already out of control, while two-thirds of the Fed’s balance sheet already represents Fannie and Freddie Mac securities that need to be bailed out by the Treasury. This makes it enormously difficult to reverse the Fed’s transactions – because the Fed is not simply determining whether a given stock of government liabilities will take the form of Treasury bonds or currency. It is instead effectively printing new money to finance ongoing spending for fiscal deficits and the bailout of the GSEs. At the same time, the fact that it is operating in a weak economy and a near-term deflationary environment means that nominal interest rates are being pressed down at the same time that long-term inflationary prospects are escalating.
From the standpoint of the two parity conditions, the very long-term implication of quantitative easing is a gradual devaluation of the U.S. dollar (an increase in the dollar price $/FC of foreign currency). If this increased inflation risk was reflected in interest rates (so that real interest rates were held constant), the U.S. dollar would simply move along that gradually sloped PPP line, and likewise, foreign currencies would gradually appreciate against the dollar.
However, because of economic weakness and credit strains, coupled with the demand for Treasuries by the Fed, quantitative easing instead moves U.S. interest rates in the opposite direction, falling rather than rising. From the standpoint of interest rate parity, capital market equilibrium then requires the U.S. dollar to depreciate immediately, by a sufficient amount to set up the expectation of future appreciation in order to offset the shortfall of U.S. interest rate returns.
In short, quantitative easing is likely to induce what the late MIT economist Rudiger Dornbusch described as “exchange rate overshooting” – a large and abrupt shift in the spot exchange rate that occurs in order to align long-term equilibrium in the market for goods and services with short-term equilibrium in the capital markets.
My impression is that Ben Bernanke has little sense of the damage he is about to provoke. A central banker who talks about throwing money from helicopters is not only arrogant but foolish. Nearly a century ago, the great economist Ludwig von Mises observed that massive central bank easing is invariably a form of cowardice that attempts to avoid the need to restructure debt or correct fiscal deficits, avoiding wiser but more difficult choices by instead destroying the value of the currency.
Von Mises wrote, “A government always finds itself obliged to resort to inflationary measures when it cannot negotiate loans and dare not levy taxes, because it has reason to fear that it will forfeit approval of the policy it is following if it reveals too soon the financial and general economic consequences of that policy. Thus inflation becomes the most important psychological resource of any economic policy whose consequences have to be concealed; and so in this sense it can be called an instrument of unpopular, that is, of antidemocratic policy, since by misleading public opinion it makes possible the continued existence of a system of government that would have no hope of the consent of the people if the circumstances were clearly laid before them. That is the political function of inflation. When governments do not think it necessary to accommodate their expenditure and arrogate to themselves the right of making up the deficit by issuing notes, their ideology is merely a disguised absolutism.”
Good policy is not rocket science. It begins with the refusal to make people pay for mistakes that are not their own. This economy continues to struggle with a fundamental problem, which is that debt obligations exceed the ability to service them. While policy makers have done everything to preserve the patterns of spending and consumption that created the problem in the first place, we have done nothing to restructure those obligations.
To the extent that we observe fresh credit problems, we should not pursue the same policies. Instead, we should focus on restructuring debt. Let the bank bondholders fail, and defend depositors and customers through the standard procedures that the FDIC has followed for decades. Deal with the debt of Fannie Mae and Freddie Mac by asserting that there is no explicit government guarantee, and let the holders of the mortgage pools receive precisely what they are entitled to receive without public funds. At the same time, expand the role of the FHA to provide explicit government guarantees for future mortgages in return for actuarily fair risk-based premiums, and require mortgage originators to retain a piece of the mortgage loan, along with appropriate capital requirements, and the stipulation that this retained portion bears the first loss if the mortgage goes bad. Finally, refuse to trot self-interested bank and Wall Street executives in front of the public to extort the nation through fear of the word “failure.” Banks fail all the time and customers don’t lose a cent. The only implication of failure is that stock and bondholders of reckless institutions aren’t rewarded for their malinvestment at public expense.
- We have about 100 warships and submarines, and thousands of aircrafts in the Persian Gulf all ready to destroy Iran. These forces are armed with nuclear bombs ranging from DU to tactical nuclear bombs and even nuclear ICBM. Iran does not possess nuclear weapons or has a nuclear weapons program. All countries are allowed under international laws to pursue peaceful nuclear power generation under the supervision of the IAEA.
- We have this little trouble maker country: Zionist Israel who has 150-400 nuclear bombs and are the 4/5th most powerful armed forces in the world. They are screaming: Iran is an existential threat! We must attack them. Zionist Israel has never signed the Nuclear Non Proliferation Treaty (NNPT) and is in constant violation of international laws. They are an apartheid state using genocide for ethnic cleansing and have been doing so for the past 60+ years.
- Which country is under existential threat? Obviously, it is Iran. Which country flies a ’666′ flag (Star of David) and is constantly waging wars of aggression against its neighbours? Obviously, it is Zionist Israel. This nation is not the Israel of the bible. Do not be deceived!
IRAN: Building a Nuclear Weapon? You’re Kidding, Right?
Many people are asking if Iran can build a nuclear weapon. The answer is No, they cannot. Iran does not have the tools or material to do so. Some 40 countries would probably like to build a reactor, though, according to the IAEA, the International Atomic Energy Agency. A reactor is the first step to a nuclear weapon.
But, the President of the US, politicians in Israel and other important people say Iran “might” be able to build a weapon in a few years. So what? I might like to jump over the moon too; but, it ain’t gonna happen.
Same thing with Iran building a nuclear weapon. Iran does not have the tools to do so. Iran cannot get them or even make the tools required. Iran cannot even buy the tools. Try calling up Japan Steel and ordering a few tons of Marange Speciality Steel and see what happens.
Talk is cheap; building nuclear weapons is not. Building nuke weapons is a very expensive, dirty, nasty business. Lots of people talk glibly about building nuclear weapons and have not a clue what they are talking about; only a few people can actually do it. Freelancers, independents and “terrorists” don’t have a chance of doing so. No, building nuclear weapons is an exclusively state run business.
Here, in a brief Flash video by nuclear reactor expert ‘Ace’ Hoffman, is how nuclear weapons changed the face of America. In fact, building nuclear weapons is the kind of big industrial enterprise that can be detected from satellites in outer space. The US has plenty of spy satellites; at least one is “parked” over Iran right now. And, making “small” nuclear weapons is even harder than building 10,000 lb, (4,545 kilogram) Atomic Bombs!
Sometime in September, Iran’s big nuclear reactor starts up and begins making Pu 239 by the ton. Russia, Iran’s patron, promises the Nuclear States and the International Atomic Energy Agency (IAEA) to bring all the old 50 Ton, plus new isotope growth, highly radioactive reactor cores back to Mother Russia’s Control rather than let Iran keep the bomb making Plutonium 239 even for one second. We all shall see.
That is the bare fact situation as of right now in August 2010. What happens next all depends on who has control of the Pu 239 from Iran’s big reactor. US and Israeli spy satellites and ground assets will be trying to “catch” Iran stealing the old reactor core with its load of tons of Pu 239 to use for a thermonuclear weapon. Everything else is just CIA front group fluff, fake media distraction, professional hair-do news readers on TV, and NYTIMES misinformation. What do You think is going to happen next?
- Army Times – Combat brigades remain in Iraq under different name
7 Advise and Assist Brigades, made up of troops from BCTs, still in Iraq
As the final convoy of the Army’s 4th Stryker Brigade Combat Team, based at Fort Lewis, Wash., entered Kuwait early Thursday, a different Stryker brigade remained in Iraq. Soldiers from the 2nd Stryker Brigade Combat Team of the 25th Infantry Division are deployed in Iraq as members of an Advise and Assist Brigade, the Army’s designation for brigades selected to conduct security force assistance.
So while the “last full U.S. combat brigade” have left Iraq, just under 50,000 soldiers from specially trained heavy, infantry and Stryker brigades will stay, as well as two combat aviation brigades.
Compared with the 49,000 soldiers in Iraq, there are close to 67,000 in Afghanistan and another 9,700 in Kuwait, according to the latest Army chart on global commitments dated Aug. 17. Under an agreement with the Iraqi government, all U.S. troops must be out of Iraq by Dec. 31, 2011. There are seven Advise and Assist Brigades in Iraq, as well as two additional National Guard infantry brigades “for security,” said Army spokesman Lt. Col. Craig Ratcliff.
Last year, the Army decided that rather than devote permanent force structure to the growing security force assistance mission, it would modify and augment existing brigades. The Army has three different standard brigade combat teams: infantry, Stryker and heavy. To build an Advise and Assist Brigade, the Army selects one of these three and puts it through special training before deploying.
The Army selected brigade combat teams as the unit upon which to build advisory brigades partly because they would be able to retain their inherent capability to conduct offensive and defensive operations, according to the Army’s security force assistance field manual, which came out in May 2009. This way, the brigade can shift the bulk of its operational focus from security force assistance to combat operations if necessary.