Rick Hohensee says the USA is bankrupt.
- From: presidentbyamendment <rick_hohensee@xxxxxxxxx>
- Date: Mon, 31 Aug 2009 15:56:35 -0700 (PDT)
presidentbyamendment.com/blog.html
This is a text file with new text appended at the top, by me. Is that
a blog?
August 30 2009, I'm calling bankrupt. The USA is bankrupt.
What even Martenson doesn't state clearly enough is, this is the duct
tape
over the oil light on the dashboard, which I discuss in the prior post
to
this file. This is bankruptcy. Now. In it.
This referenced article describes how the Fed is quite probably
hiding
the monetization of the US debt. The article points out that the
mechanism
the Fed is using is exactly how Zimbabwe destroyed their currency,
only
a bit sneakier. Allow me to point out that this is clear evidence that
the USA's fiscal nightmare will only get much worse under the current
management, which is when you rightfully pull the plug on such a
debtor,
and get them reorganized as soon as possible, so that, for example,
the
US dollar can remain the de-facto currency of the planet, and so that
pensions and so on can remain useful. If the current fools remain in
power,
those are things of the past.
http://www.chrismartenson.com/blog/shell-game-how-federal-reserve-monetizing-debt/25806
"If this strikes you as a scam, congratulations; you get it."
"
However, this openness only extends to the amounts themselves, not
the source(s) of those Agency bonds. This is, in my mind, yet
another reason the Fed desperately wishes to avoid an audit. The
results would expose the game for what it is.
"
How long will the USA be able to dodge Obamanomics bullets?
Rick Hohensee
Aug 20 2009
Three weeks ago the Treasury offered a bunch of IOUs for sale and
there
were not enough takers to cover the offering, so the Fed "bought"
them. The Fed bought them with money that does not exist. That is
called
"monetizing the debt", and it is the little red "buy new engine"
light
on the nation's dashboard. Monetizing your debt is the hallmark of
failed economies and nations. This is why that particular T-bill sale
made
the front page summary of the WSJ. Big news. The USA almost lost oil
pressure
and locked up, which would destroy the engine.
The USA's debt is over $11,000,000,000,000 dollars, which is of
course
an outrage. That is roughly $37,000 for every American. Roughly one-
third
of that is lent to the US as T-bills with terms of less than a year.
Unless
the USA pays off its debt, which the USA is not anywhere close to
doing,
it must roll over 1/3 of it's debt every year. That means more than
$3,000,000,000,000 in T-bills must be re-sold every year.
Shortly after the T-bill auctions of a few weeks ago gave such
disturbing
results, the stock markets declined significantly, and federal debt
became
the lesser of the available evils to large investors, and foreign
sovereign
banks and so on resumed buying T-bills. The big bullet was thereby
avoided,
that time, and not for very good reasons.
What happens when the Chinese and others have had enough of the USA's
ridiculous debt, and decide to abandon it? Roll-over time is
typically
when you find out you are bankrupt, and so it may well be with
Obamamerica.
If the Chinese and Japanese stop renewing their short-term T-bills,
the Fed will have to buy hundreds of billions of dollars worth of them
in
a matter of months. This is how hyperinflation happens. When it
starts, as
it almost did a few weeks ago, the impending inflation it creates
makes the
rest of the existing debt even less desirable to lenders, and you then
have
to monetize the entire debt, which will devalue the dollar by several
times
its current value. Milk will be well over $10 per gallon. Probably
more
like $50--.
The failure of an economy is like the violent failure of an internal
combustion engine. Exactly which parts melt, which parts burn,
and which parts merely get bent is impossible to predict, and well
beside
the point. The point is, when your predecessors bequeath you a tired
old
Cadillac with erratic oil pressure to begin with, you don't strap a
nitrous injection kit on it and call it a brave new world, which is
what
Obama has done with the USA and his "stimuli" and his
$2,000,000,000,000
deficit, and what the Fed is doing, with Obama's complicity, with all
the
funny-money they are printing up above
and beyond what they had to print up recently merely to roll-over
existing
debt. The Fed plans to print $1.25T to buy garbage mortgage-backed
securities,
for example. The Fed is also supporting the stock markets with the
printing
press. That's why the Fed's balance sheet, a crucial metric of the
money
supply, what the Fed calls the "monetary base", has more than doubled
in a
year, even though the roll-over monetization is a recent symptom.
Talk of the velocity of money and low demand preventing inflation is
nonsense.
Busfare in Zimbabwe is not Z$3,000,000,000,000 because of high demand,
or low
turnover of Zimbabwe dollars. It is from an incompetent leader trying
to solve
all his economic problems with the printing press. Velocity of money
and demand
effects on prices are phenomena of interest only in steady economies.
Bernanke
thinks otherwise.
Bernanke also says the Fed can pull money out of the economy almost at
will "when
appropriate". That also is based on a certain level of economic
normalcy that
could be gone in a flash under current conditions, and even if things
remain
fairly normal, Bernanke isn't particularly credible even in a normal
economy.
This whole scenario we are now in was a complete surprise to him.
Bernanke also doesn't want to admit how bogus his and his
predecessor's
economic prosperity were. He is therefor still maintaining the markets
at an unnaturaly high level. The markets are still over a gross return
on
investment of 20, where 16 might be considered normal. The USA is due
for
a lifestyle change, and if things aren't handled much differently than
they
currently are being handled, it will be a lot worse than it has to be.
Unimaginably so. If Obama didn't have a ridiculous deficit, maybe the
glitch
in sales of T-bills wouldn't have happened at all. Certainly, a
$2,000,000,000,000 deficit doesn't make the USA more credit-worthy.
Obama said he would like to be a transformative figure like Reagan.
He
could very well be the last pin in Reagan's, Gingrich's and Grover
Norquist's
voodoo doll of the USA.
I have a plan for getting us out of these terrifying circumstances. It
starts
with a Constitutional Convention to, among other things, install a
President
of the USA that uses his real legal name. Mine is Richard Allen
Hohensee.
Obama's is Barry Soetoro.
Rick Hohensee
presidentbyamendment.com
.
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