- Although, the financial MSM is making alot of noise about the crappy situation the Eurozone is in, America is in an even worse state. All the ‘news’ reports about the problems in the EU has allowed the USD to strengthen. The belief that the USD will not collapse will be tested in 2011. All the major currencies are essentially toast: USD, EUD, JPY, UKP…the minor fiat currencies will not survive the coming global currency crisis!
European Sovereign Debt Crisis Set to Spread … Government Bonds at Risk!
Foreign Exposure to PIGS Debt
Is a Major Threat
The BIS’s latest quarterly review contains a tabulation of exposure, broken down by nationality, to debt of the four most problematic countries: Portugal, Ireland, Greece, and Spain. The grand total: A staggering $2.2 trillion! Nearly one quarter — $513 billion — is held by German investors. U.S. investors are on the hook for $353 billion and U.K. investors for $370 billion. These are humongous numbers.
Conservatively speaking, these debts will need at least a 30 percent haircut for the PIGS to have a realistic opportunity of getting out of the hole they’re in. And if that 30 percent is the result of defaults, the international banking system would again be severely wounded.
That’s why I called the Greek bailout earlier this year another banking system bailout. And that’s why the international community claims bailouts are the best choice. There is always an alternative. But in this case, the political will is obviously lacking. So as analysts and investors we have to accept it as a reality and ask ourselves where this may lead.
The Difference between a Liquidity Crisis
and a Solvency Crisis
I have always made the case that the political reaction to the housing and banking crisis of 2007-2009 was not solving, nor addressing, the underlying problem of too much debt. By adding more debt you can buy some time and kick the can. But in doing so the problem only gets bigger, which is what has happened.
Back then we had banks and other corporations on the brink of collapse. Now many countries are in the same boat! To understand what was going wrong then and what is going wrong now you have to distinguish between a liquidity crisis and a solvency crisis …
A liquidity crisis is a temporary inability to pay. The debtor is sound enough to service the debt. In such a case you might have a good reason for a bailout. A solvency crisis is a different story … The debtor does not have the wherewithal to service the debt. Therefore, additional credit can only aggravate the situation — it’s throwing good money after bad.
The Government Debt Crises
Are Solvency Crises
The current government debt crises are clearly solvency crises. And many governments will finally have to acknowledge that their debt mountains are too large to service. Bailouts do not improve the situation of these countries. Nor do they help the countries making bailouts. In fact, they too are up to their eyeballs in debt.
That’s true for Germany, that’s true for Japan, that’s true for the U.K., and that’s true for the U.S. The longer these relatively stronger countries finance the weaker ones — either directly or via international organizations like the IMF — the faster they’ll face ruin themselves. At the same time, they’re almost guaranteeing that the sovereign debt crisis will spread like wildfire. What does this mean for you?
Well, scores of government bonds, once considered safe investments, aren’t safe anymore! That’s because investors now realize that many industrial countries will sooner or later have to make a tough choice: Either outright default or surging inflation.
Daniel 7:23 (New King James Version)
23 “Thus he said:
‘ The fourth beast shall be
A fourth kingdom on earth,
Which shall be different from all other kingdoms,
And shall devour the whole earth,
Trample it and break it in pieces.
- The Feds do not have money for social security, unemployment benefits, education, municipal services…. but they have money for wars! America is a military state and a war economy. The strongest part of its economy is its military industrial complex (MIC). Americans are merely cannon fodder to serve the war agenda of the MIC. In the coming year, there is a high probability of new wars: Iran, North Korea, China ….etc. This is all a SCAM, the financial raping of the sheeple to further global conquest for the Illuminist’s New World Luciferian Order! See also: War Sending The US To Ruin! The Military Industrial Complex!
Pentagon’s Christmas Present: Largest Military Budget Since World War II
On December 22 both houses of the U.S. Congress unanimously passed a bill authorizing $725 billion for next year’s Defense Department budget. The bill, the National Defense Authorization Act for Fiscal Year 2011, was approved by all 100 senators as required and by a voice vote in the House. The House had approved the bill, now sent to President Barack Obama to sign into law, five days earlier in a 341-48 roll call, but needed to vote on it again after the Senate altered it in the interim.
The proposed figure for the Pentagon’s 2011 war chest includes, in addition to the base budget, $158.7 billion for what are now euphemistically referred to as overseas contingency operations: The military occupation of Iraq and the war in Afghanistan. The $725 billion figure, although $17 billion more than the White House had requested, is not the final word on the subject, however, as supplements could be demanded as early as the beginning of next year, especially in regard to the Afghan war that will then be in its eleventh calendar year.
Even as it currently is, the amount is the highest in constant dollars (pegged at any given year’s dollar and adjusted for inflation) since 1945, the final year of the Second World War. With recent U.S. census figures at 308 million, next year the Pentagon will spend $2,354 for every citizen of the country at the $725 billion price tag alone.
Last year’s Pentagon budget, by way of comparison, was $680 billion, a base budget of $533.8 billion and the remainder for operations in Afghanistan and Iraq. In July of this year Congress approved the 2010 Supplemental Appropriations Act which contained an additional $37 billion for the wars in Afghanistan and Iraq.
Next year’s defense authorization of $725 billion compares to, according to the Center for Defense Information, a Pentagon budget of $444.6 billion in 1946; $460.4 billion in 1968, the highest yearly amount during the Vietnam War; and $443.4 billion in 1988, the highest during the eight years of the Ronald Reagan administration’s massive military buildup. (Numbers in 2004 constant dollars.) 
The Stockholm International Peace Research Institute estimates American military spending for 2009 to have accounted for 43 percent of the world total. Carl Conetta, co-director of the Project on Defense Alternatives, earlier this year estimated the 2010 U.S. defense budget to constitute 47 percent of total worldwide military expenditures and to amount to 19 percent of all American federal spending.
In addition, Pentagon spending has increased by 100 percent since 1998 and “the Obama budget plans to spend more on the Pentagon over eight years than any administration has since World War II.”  With 2.25 million full-time civilian and military personnel, excluding part-time National Guard and Reserve members, the Defense Department is the U.S.’s largest employer, outstripping Walmart with 1.4 million employees and the U.S Post Office with 599,000. 
“Add in what Homeland Security, Veterans Affairs, and the Energy departments spend on defense and total US military spending will reach $861 billion in fiscal 2011, exceeding that of all other nations combined,” according to Todd Harrison, senior fellow for Defense Budget Studies at the Center for Strategic and Budgetary Assessments. 
In April Robert Higgs of The Independent Institute advocated that the budgets – in part or in whole – of the departments of Veterans Affairs, Homeland Security, Energy, State and Treasury and the National Aeronautics and Space Administration (NASA) should be calculated in the real military budget, which would in 2009 would have increased it to $901.5 billion.
“Adding [the] interest component to the previous all-agency total, the grand total comes to $1,027.8 billion, which is 61.5 percent greater than the Pentagon’s outlays alone.” His numbers are:
National Security Outlays in Fiscal Year 2009
(billions of dollars)
Department of Defense 636.5
Department of Energy (nuclear weapons and environmental cleanup) 16.7
Department of State (plus international assistance) 36.3
Department of Veterans Affairs 95.5
Department of Homeland Security 51.7
Department of the Treasury (for the Military Retirement Fund) 54.9
National Aeronautics and Space Administration (1/2 of total) 9.6
Net interest attributable to past debt-financed defense outlays 126.3
Total 1,027.5 
Daniel 11:37-39 (New King James Version)
37 He shall regard neither the God[a] of his fathers nor the desire of women, nor regard any god; for he shall exalt himself above them all. 38 But in their place he shall honor a god of fortresses; and a god which his fathers did not know he shall honor with gold and silver, with precious stones and pleasant things. 39 Thus he shall act against the strongest fortresses with a foreign god, which he shall acknowledge, and advance its glory; and he shall cause them to rule over many, and divide the land for gain.