A Hard Reality

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#1 Mon, Jun 20, 2011 - 6:30pm
Black Hole Sun
Joined: Jun 14, 2011

A Hard Reality

A Hard Reality

Rather than face these unpleasant facts and consider where they are leading us, most people continue to think, "It can't happen here, this is America."

Meanwhile, our country has been depending on a printing press to make our economic system work. When is the last time that happened in America? (Hint: the Civil War.)

How many other things most people didn't think would ever happen in America have happened recently? What about the collapse of our investment banks, the bankruptcy of General Motors, the liquidation of Fannie Mae and Freddie Mac, the failure of AIG, hundreds of banks being seized, millions of homes in foreclosure, real unemployment rates close to 20%. We could go on.

As we frequently point out to our critics, the question isn't when this crisis will begin – it started in 2008. The question is, when will it end and how bad will it get before it does?

We believe every American ought to be ashamed, outraged, and furious that the most powerful political union in history proceeded down the path of these bankrupting policies. But most of all, you ought to be afraid of where these policies have led us.

Don't forget: In about six weeks, the Federal Reserve will stop buying Treasury bonds.

That's the first time since March 2009 our economy will stand on its own two feet. And we expect... just like a child riding a bike without training wheels for the first time... it will crash.

We are not alone.

Bill Gross, manager of the world's largest bond fund, has put 4% of his fund short U.S. Treasury bonds. Just consider that for a minute: The most powerful fixed-income manager in the world (not just in America) is selling the U.S. Treasury short.

The University of Texas endowment fund recently took physical delivery of $1 billion gold bars. That's an enormous bet that the U.S. monetary system falls apart, from some of the wealthiest and best-informed investors in the world.

Finally, in what we believe is the ultimate death knell for the U.S. dollar, our trading partners are moving out of the dollar and into gold. Mexico, for example, one of our most important trading partners, just purchased almost 100 tons of gold.

All around the world, more and more central banks are selling dollars and buying gold. They're doing so because they can plainly see America's credit has become unreliable and the value of the dollar is likely to decline. If you think you might be trading in something other than U.S. dollars in the future, then you might not want to be holding U.S. dollars. You might want to be holding that currency. And if you can't hold that currency (like you can't hold the Chinese yuan), you might consider holding gold.

Edited by: ¤ on Nov 8, 2014 - 5:07am
Mon, Jun 20, 2011 - 8:46pm
Number 47
Joined: Jun 14, 2011

I was talking to some

I was talking to some Americans here in Ireland just last night, they were exhibiting the same blinkered view you highlight here. They offered this solution to Irelands problems.

'The UK and Ireland should just join economically with America and leave Europe to rot' I had no reply to that bit of wisdom.

Mon, Jun 20, 2011 - 9:01pm (Reply to #2)
Lubbock, TX
Joined: Jun 14, 2011

When your ship is sinking, it

When your ship is sinking, it makes some sense to lash it to other ships.

The problems arise when those other ships have big holes in their hulls as well, and are taking on water faster than your own. It's just they have a larger displacement, so it takes them a bit longer to flounder.

Mon, Jun 20, 2011 - 10:39pm
Joined: Jun 14, 2011

it seems most/all the major

it seems most/all the major currencies are tied together, so when one the US falls, and their longtime hold as the world's reserve currency, they all fall, or atleast the ones tied to the dollar. This has the potential to be the mother of all currency collapses.

Mon, Jun 20, 2011 - 10:54pm
Warren Peace
Silver City, AZ
Joined: Jun 14, 2011

United we burn, divided we crater

I can remember my dilemma at the last pres election, and my deer in the headlight look when asked by others who I would vote for. After much gnashing of teeth and facing some painful realities I had to reply Ron Paul, but with a caveat.

He is the only one who really understood the problem correctly at that time (he may be the only one this time as well). But I came to the conclusion that the entire western fiat empire had passed the point of no return, and it didn't matter who got elected because in the words of the great Mogambu.... we're screwed.

The boat analogy is a good one. The US is the center of the fiat universe. There isn't a country out there who will lash themselves to us because if they strike out away from this titanic, then there is a chance they wont get sucked under by the sea of debt disappearing into a black hole of debt non-repayment, or get incinerated by the explosion of hyper-inflated bama bucks as the Bernank tries to avoid the implosion. Ok, not a very good chance, but a chance. The chance increases based on how much a country has disentangled itself from western power centers (see China's panicked attempt at this in headlines everyday). There is only one lifeboat..... ownership of real stuff, as opposed to paper and meaningless promises for stuff. Possession of real food, real energy, real minerals, and yes, real money (gold, silver).

Real economics is reasserting itself. In it's simplest form it is the production, transportation, and consumption of commodities. Isn't that what it comes down to when you cannot go to the grocery store because there is no gas at the station, and it wouldn't matter because there's no food there anyway. Quite a fix, yes? Oh well, maybe there is an app for that ;-)

Mon, Jun 20, 2011 - 11:11pm
Calgary, AB
Joined: Jun 14, 2011

I am not sure how this will

I am not sure how this will all end, but I am concerned...nay, fearful of where we all may be headed. When a government starts raiding its public servants' pension plans, the stage is set for all out mayhem. Patriotism is hard to muster when your elected government shreds your life savings and slanders you as well. From my Canadian vantage, this all started with 9-11, and a sharp reaction by the conservative right wing. Of course merit-ocratizing the banking/ mutual fund / loan / mortgage industry so that dealers were paid on the basis of how much money they could loan or how much paper they could create or push did not help either. Greed and paranoia have taken over the upper echelons of power globally. Perhaps it has always been so, but I was reared on old fashioned values like trust, fair play, integrity, and the wasp work ethic. I have spent most of my adult life espousing the values of democratic process and contributing to the system that all may benefit. Now it seems all too likely that as citizens realize how badly they have been screwed over they are going to react in exactly the same ways as they are in the Middle East, Greece, Spain, France, Ireland, Britain...and the list goes on. To make matters worse, the ruling corporate culture has completely abdicated their global responsibilities and have permitted a series of globe changing environmental disasters to befall us. And what are our governments' responses? They have become accomplices to the crimes rather than advocates and protectors of those they purportedly serve. They actively enable and encourage and perpetuate these crimes. I think Gerald Celente may have called it correctly: global revolution. Our governments' responses? Bomb, fire upon, prosecute, and persecute the victims. Yes, I am fearful, and yes I am preparing for the end of the great Keynesian experiment. Thanks, Turd, for a place to speak out.

Mon, Jun 20, 2011 - 11:58pm
Joined: Jun 14, 2011

I am sure

Though they may not lash onto our sinking ship, they will be caught in the suction that this massive heap will generate.

There exist no country that will not feel the effects of this country tanking, we are all now joined at the hip, as a consumer and debtor nation it will take all the major players with it, so if it does go down it will not stay that way very long, although things will change dramatically as far as the financials go, most everything else will remain the same.................this ship is just to Big to Bail.

Tue, Jun 21, 2011 - 12:42am (Reply to #7)
Joined: Jun 14, 2011

Eyes wide open.

The really sad thing as other posts have pointed out, is the amount of non-understanding by the majority of citizenry. These people will be truly the deer caught in the headlights! The global financial/monetary system is broken. It's not coming back. At least not in it's present form. And yes, the global politico leadership is not leading. This crisis that is upon us has not inspired ONE ray of insight or solution from our present leadership. That's if a solution exists! Ron Paul comes the closest to understanding the overall problem and it remains to be seen, if the power elite allow him to proceed with the powerful (bad tasting & unpopular) medicine that is required to right the floundering ship of state.