|10-13-2009, 11:20 PM||#1|
It is what it Is.
Join Date: Apr 2001
Location: in a bunker
When our leaders have no awareness of the disastrous consequences of their actions, they can claim ignorance and take no action.
Or when our leaders have no hard evidence as to what might happen in the future, they can at least claim uncertainty.
But when they have full knowledge of an impending disaster … they have proof of its inevitability in ANY scenario … and they so declare in their official reports … but STILL don’t lift a finger to change course … then they have only one remaining claim:
And, unfortunately, that’s precisely the situation we’re in today: Three recently released government reports now point to fiscal doomsday for America; and one of the reports, issued by the Congressional Budget Office (CBO), says so explicitly:
* The CBO paints two future scenarios for the U.S. budget deficit and the national debt. But it plainly declares that fiscal disaster will strike in EITHER scenario. Furthermore …
* The CBO states that its fiscal disaster scenarios could cause severe economic declines for decades to come, including hyperinflation and destruction of retirement savings.
* The CBO then proceeds to admit that even its worse-case scenario could be understated by a wide margin due to panic in the financial markets or vicious cycles that are beyond control.
* Separately, in its Flow of Funds Report for the second quarter, the Federal Reserve provides irrefutable data that we are already beginning to witness the first of these consequences in the United States: an unprecedented cut-off of credit to businesses and consumers.
* Meanwhile, the Treasury Department shows that America’s fate remains, as before, in the hands of foreigners, with the U.S. still owing them $7.9 trillion!
* And despite all this, neither Congress nor the Obama Administration have proposed a plan or a timetable for averting these doomsday scenarios. Their sole solution is to issue more bonds, borrow more, and print more without restraint.
That is the epitome of insanity.
Yes, the great government bailouts of 2008 and 2009 have bought us some time … but they have promptly proceeded to sell us into bondage.
Yes, they have given us safe passage over tough seas … but only to throw our assets onto the global auction block for the highest bidders.
The one bright spot: Unlike some governments, ours does not conceal the evidence of its folly. Quite the contrary, the proof pours forth from these three government reports in relatively blunt language and unmistakably blatant numbers …
Congressional Budget Office (CBO):
The Long-Term Budget Outlook
The CBO opens with a chart predicting the most dramatic surge in government debt of all time.
It shows that even in proportion to the larger size of the U.S. economy today, the government debt has ALREADY surpassed the massive debt loads accumulated during World War I and the Great Depression … and will soon surpass even the massive debt load of World War II.
“Large budget deficits,” write the authors of the CBO report, would . . .
* “Reduce national saving,” leading to …
* “More borrowing from abroad” and …
* “Less domestic investment,” which in turn would …
* “Depress income growth in the United States,” and …
* “Seriously harm the economy.”
Worse, on page 14, the CBO warns that:
* “Lenders may become concerned about the financial solvency of thegovernment and …
* “Demand higher interest rates to compensate for the increasing riskiness of holding government debt.” Plus …
* “Both foreign and domestic lenders may not provide enough funds for the government to meet its obligations.”
The magnitude of the problem cannot be underestimated. The CBO declares on page 15 that:
* “The systematic widening of budget shortfalls projected under CBO’s long-term scenarios has never been observed in U.S. history” and …
* It will also be larger than the debt accumulations of any other industrialized nation in the post World War II period, including Belgium and Italy, the two worst cases of all.
* “The analysis omitted the pressures that a rising ratio of debt to GDP would have on real interest rates and economic growth.”
* “The growth of debt would lead to a vicious cycle in which the government had to issue ever larger amounts of debt in order to pay ever-higher interest charges.”
* “More government borrowing would drain the nation’s pool of savings, reducing investment” and …
* “Capital would probably flee the United States, further reducing investment.”
But the CBO admits that even these frightening projections may be grossly understated because:
But none of these are factored into the analysis. On page 17 of its report, the CBO writes …
“The analysis … does not incorporate the financial markets’ reactions to a fiscal crisis and the actions that the government would adopt to resolve such a crisis. Because [our] textbook growth model is not forward-looking, the analysis assumes that people will not anticipate the sustainability issues facing the federal budget; as a result, the model predicts only a gradual change in the economy as federal debt rises.
“In actuality, the economic effects of rapidly growing debt would probably be much more disorderly as investors’ confidence in the nation’s fiscal solvency began to erode. If foreign investors anticipated an economic crisis, they might significantly reduce their purchases of U.S. securities, causing the exchange value of the dollar to plunge, interest rates to climb, and consumer prices to shoot up."
U.S. Federal Reserve:
Flow of Funds Accounts
of the United States
Flow of Funds
The Fed’s data on page 12 tells it all: The impact on the U.S. credit markets is not just a future scenario. It’s happening right now.
Yes, the government is getting its money to finance its exploding deficits (for now). But it’s hogging all the available supplies, while American businesses and average consumers are getting shut out or even shoved out.
* In the first half of last year, the U.S. Treasury raised funds at the annual pace of $411 billion in the first quarter and $310 billion in the second quarter.
* But if you think that was a lot, consider this: THIS year, the Treasury has stepped up its pace of borrowing to annual rates of $1.443 TRILLION in the first quarter and $1.896 TRILLION in the second quarter. That’s 3.5 times and over SIX TIMES MORE than last year’s, respectively.
Meanwhile, the private sector is getting killed …
* Last year, banks provided new credit at the annual pace of $472.4 billion in the first quarter and $86.7 billion in the second. This year, they’re not providing ANY new credit — they’re actually LIQUIDATING loans at the rate of $857.2 billion in the first quarter and $931.3 billion in the second. So if you’re running a business, you may want to think twice before asking your bank for more money. Instead, they may decide to TAKE BACK the money they’ve already loaned you!
* Ditto for mortgages. Last year, mortgages were being created at the annual clip of $522.5 billion and $124 billion in the first and second quarters, respectively. This year, on a net basis, mortgages haven’t been created at all. Quite the contrary, the Fed reports that, on a net basis, they’ve been liquidated at an annual pace of $39.3 billion in the first quarter and $239.5 billion in the second.
* Getting cash out of credit cards and other consumer credit is even tougher. Last year, folks were able to add to their consumer credit at annual rates of $115 billion and $105 billion in the first two quarters. This year, in contrast, they’ve been forced to CUT back on their credit at annual rates of $95.3 billion in the first quarter … and at an even faster pace in the second quarter — $166.8 billion
Never before in my lifetime have I witnessed a more severe case of crowding out in the credit markets!
And never before has the CBO been so right in its forecasts of fiscal doomsday: One of its dire forecasts was already coming true even before it issued its report.
U.S. Treasury Department:
Each and every month, the Treasury reminds us of the single fact that no one in the Treasury wants to face:
The U.S. is deep in debt to the rest of the world, and on page 48, it provides the evidence: total liabilities to foreigners of $7,898,435 million (nearly $7.9 trillion)!
This isn’t a new record. It was actually slightly more last year. But the fact is NOTHING has been done to reduce our debt to foreigners. Quite the contrary, it is the deliberate policy of our government to pile up more — to sell foreign investors and central banks on the idea that they must continue to lend us money.
The fact that this could potentially put our nation into deeper jeopardy is overlooked. And the dire forecast by the CBO that foreign investors might pull the plug is pooh-poohed.
Stay alert to our emails for specific instructions on how to harness these potentially overwhelming forces and harvest them for profits.
Good luck and God bless!
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|10-14-2009, 12:42 AM||#2|
Join Date: Jul 2001
Location: Hot Springs, Ouachitah
World bids farewell to U.S. dollar
Largest bank, U.N. seek replacement for global reserve currency
Posted: September 25, 2009
12:50 am Eastern
By Jerome Corsi and Chelsea Schilling
© 2009 WorldNetDaily
One of the world's largest banks is bidding farewell to the U.S. dollar – just as the dollar faces intense scrutiny at today's G-20 summit and the United Nations announces it wants a new global reserve currency replacement.
"The dollar looks awfully like sterling after the First World War," David Bloom, HSBC currency chief, told London's Telegraph.
"The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the U.K. – debt is racing up to 100 percent of GDP," he said
China and rising Asia can no longer continue holding down their currencies to boost exports because it's hurting their own economies, creating asset bubbles, the Telegraph reported.
"The policy headache was already becoming clear in the final phase of the global credit boom but the financial crisis temporarily masked the effect," the report states. "The pressures will return with a vengeance as these countries roar back to life, leaving the U.S. and other laggards of the old world far behind."
Bloom told the newspaper that regional currencies will emerge as the anchor for HSBC's smaller trading partners, with China, Brazil, or South Africa filling the role of the U.S. Australia has been linking its fortunes to China through commodity ties.
The news comes on the heels of a recent Red Alert report that world organizations, including the United Nations, are openly calling for the creation of a one-world currency to replace the dollar – and the Obama administration's trillion-dollar deficits are serving as a trigger for the currency switch.
A United Nations report recommended that a new one-world currency should be created to replace the dollar as the standard for foreign-exchange holdings in international trade.
"If the plan succeeds, the United Nations would effectively end up replacing the United States as the issuer of the one-world international currency used as the standard of foreign exchange to settle international trade transactions," Red Alert reported. "The move would obviate the need for any nation state in the future to be the arbiter of world trade, marking yet another blow to national sovereignty on the path to one-world government."
The report, released by the United Nations Conference on Trade and Development, or UNCTAD, endorsed a proposal that Special Drawing Rights, or SDRs, issued by the International Monetary Fund, or IMF, "could be used to settle international payments."
The dollar is also expected to come under intense scrutiny at today's G-20 Pittsburgh summit. China is leading calls for reconsideration of the dollar as a reserve currency. The country was first to call for a new global currency as an alternative to the dollar as the U.S. deficit began multiplying.
Red Alert has also reported that Russia and China championed the idea to use the IMF's Special Drawing Rights as a new international currency as a proposal that was adopted by the 2009 G-20 London summit held last April.
The G20 summit meeting took a step toward creating a new one-world currency through the International Monetary Fund that is designed to replace the dollar as the world's foreign exchange reserve currency of choice.
Point 19 of the final communiqué from the G20 summit in London on April 2 stated, "We have agreed to support a general SDR which will inject $250 billion into the world economy and increase global liquidity," taking the first steps forward to implement China's proposal that Special Drawing Rights at the International Monetary Fund should be created as a foreign-exchange currency to replace the dollar.
The IMF created SDRs in 1969 to support the Bretton Woods fixed exchange-rate system.
"The international supply of two key reserve assets – gold and the U.S. dollar – proved inadequate for supporting the expansion of world trade and financial development that was taking place," a document on the IMF website explains. "Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF."
When the Bretton Woods fixed-rate system collapsed, major world currencies, including the dollar, shifted to a floating exchange-rate system where the price of the dollar and other major world currencies was created by trading on international currency exchanges.
Until the current global economic crisis, SDRs issued by the IMF have been used by IMF member nation states primarily as a reserve account to support international trade transactions, not as an alternative international currency available to settle international debt transactions in danger of default.
Some say the discussion of using SDRs at the IMF as an international reserve payment system is further evidence that the momentum to create a one-world currency is gaining not only among academic economists, but also among professional economists holding prominent government positions.
Red Alert previously reported that strong support for the idea of a one-world currency has recently come from Canadian economist Robert Mundell, who won a Nobel-prize in 1999, for his work formulating the intellectual basis for creating the euro.
Mundell endorsed the idea of Kazakhstan President Nursultan Nazarbayev to create the "acmetal" as a world currency, according to the Australian News.
Craig Smith, president and CEO of Swiss America Trading Corporation, a national investment firm specializing in U.S. gold and silver coins, has been warning about the decline of the dollar for many years.
"It is now happening before our eyes," Smith said. "The dollar is getting ready to get hammered, and there is no way for the Fed to stop it."
Smith, author of "Rediscovering Gold in the 21st Century," has argued that the simplest solution for Americans looking to protect their wealth is to convert it from unstable dollars into gold, "the most stable currency in the world."
|10-14-2009, 04:19 AM||#4|
Mo' holla fo' yo' dolla!
Join Date: Dec 2002
Location: In a bunker in an undisclosed location
It's all about consolidation of wealth and concentration of power in the hands of an increasingly smaller group of corporatist kleptocrats.
And the right-wing ninnies on this board continue to labor under the misconception that their interests and the interests of these globalist vampires are one and the same.
|10-14-2009, 08:43 AM||#5|
Ring of Famer
Join Date: Aug 2007
Only dimwit liberals who buys everything Obama sells could believe the economy is going as planned. The unemployment rate is still incredibly high with no end in sight, but I guess that's part of the master plan.
|10-14-2009, 01:05 PM||#7|
Join Date: Jan 2003
Location: Twixt Hell & Highwater