Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."
What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.
When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.
The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."
The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.
LINK HERE
Prepare for the Great Depression.
Survival Seeds
Go to your bank tomorrow and take out $3000 if you can (or have it).
ReplyDeleteWatch how you are treated. Like a nut. Double ID, let's have the manager take a look at what you are wanting to do while we're at it.
Hmm. You really want $3000? I guess we could do that. Hang on a second. I have to go to the vault. What do you want this much cash for? (None of your GD business!)
Now think a minute. When the banks start falling like dominos just how hard do you think it is going to be to get your money THEN?
In their minds, it is THEIR money, not yours.
Stop trusting these maggots and get what you can out of these criminal banks. Don't be fooled by the fancy building or the teller with the pretty smile.
The banks are your real enemy, not Abdullah Muhammed.
No person in a Burka is planning on robbing you blind; people in a suit are indeed planning that action.
Leave only enough in their to conduct your affairs. No CDs, etc.
Precious metals aren't your thing? Fine. Even though the dollar will tank I'd still rather have it in my hand to wipe with vs behind a locked bank door.
If you don't know who you real enemy is, if you buy into all the bullshit enemies the media tosses at you, good luck.
Run on the Dollar? not so soon....Japan is planning quantitative easing meaning they will buy more US$$ and sell Jap currency to devaluate their currency. The US $$ is set for a massive rally....NOW is the TIME BUY BUY BUY BUY US $$$$$ SELL SELL SELL SELL SELL all your GOLD NOW NOW NOW NOW....you will regret not listening to me....
ReplyDeleterun on the dollar correct, gold and silver will go through the roof soon, the end of the us dollar is assured, the question is when. I say in 2010 sometime after tax season, when they have the last blood from the sheep then comes the final slaughter.
ReplyDelete8:34 thats like saying 2 kids have 500 of the same Baseball cards and they're trading them back and forth..Dumbest post yet. The dollar will rally alright ...right into the wheelbarrow..
ReplyDelete8.34 Certified 100 per cent American sheeple.Go ahead do it knock yourself out.
ReplyDeleteNobody knows what to do for sure... I think I will sit here and poop my pants.
ReplyDelete834 is a disinfo agent, either a banksters stooge or cia something like that
ReplyDeleteNothing so grand. Just a lonely person wanting attention.
ReplyDeleteMy uncle is VERY high up there in the financail world (lets just put it that way), and he talks with powerful people who know what's going to happen before its happens. Here is the dollar forecast: The dollar will fluctuate around the low 70s-high 60s index next year. 2011 is when it will drop into the 50s, and the last half/beginning of 2012 is when we will see the dollar plunge into the 40s and 30s thus turning america into a second world country. My belief is that the government will outlaw gold and demand every citizen turn it in just like they did in the first depression, thus making gold non useful for american citizens. Therefore the only thing i recommend is stocking up on a ten year supply of food, weapons, ammo, and if at all possible have land out west or up north you can take your family when everything hits. Let me just say this- if you thought it wasn't possible that a group of financail elites could collapse the currency of america think again.
ReplyDelete9:42 if in fact that is true, you honestly believe the public will just walk in and hand over their GOLD? "From my cold, dead hands!"
ReplyDeletedisinfo misinfo noinfo, who gives a fcuking shit!
ReplyDeleteprint money
be merry
even in kindy
money is honey
Even if you don't hand over your gold it will still be illegal for you to use it at the store- you could however use it to barter with neigbors and citizens.
ReplyDelete... and under those conditions it will be worth even more ...
ReplyDeleteIt is all about having things, not little slips of worthless paper. AnyTHING. Actual toilet paper. Golf shoes. Anything but fiat worthless notes.
A gold seizure would be utterly useless. No one is going to turn in their gold to the pirates. Maybe old ladies, but that is all.
Where will the Liberty Autonomous Zone be?
ReplyDeletehttp://globalguerrillas.typepad.com/globalguerrillas/2009/01/journal-growing-an-open-source-war.html
9:42 And you "high up" Uncle told you this for what reason? You are just speculating like everyone else. Any time I see specific dates my eyes glaze over. They always come and go uneventfully.
ReplyDeleteThe internet has truly become the governments greatest tool against revolution. It makes it mpossible to assemble as a militia because no one knows if they might be talking to a shill. You must get involved with 3-5 likeminded neighbors and start a commentary with your best friends 3-5 like minded neighbors and so on......
ReplyDeleteWe must organize and demand change with predetermined judgments for lack of action. Trying to assemble in a forum like this only leads to dissembly as witnessed time and again by how commentators rip each other apart. Everytime you post something negative, our cause atrophies and the commentator should then go back to grazing with his fellow mutton.
Im going to run like the dollar and buy up as much silver and gold as I can on the banksters on cards.Fuck them if I cant patoo bad.These scum deserve it.I know its wrong but how else can the little guy screw these bastards good.
ReplyDeleteEventually things will get so bad kidnappings extortion and excutions of the bankster ruling class and the scum they associate with in pursuing their predatory behavoirs against the average citizen.Id love to see them swing.It will happen the masses can be fooled for only so long before desperation takes over.
@2:03 - I've read on the blogs that bankster minions of the Squid are getting handgun permits - think that will do them any good against a lynch mob?
ReplyDeleteThey better hire Blackwater if it gets to that (and it wouldn't surprise me if they did).
from 10:54
ReplyDelete"you could however use it to barter with neigbors and citizens"
Everytime I see this statement I laugh...do you really think people are going to be "civil" by this point??
your "neighbors" will just TAKE WHATEVER THEY WANT... GET IT?
Well I question how many dollars a yen is going take off the market. My thought is not many, at least not enough to cause anything more significant than a minor week-long blip in the U$D market.
ReplyDeleteAnd if Gold/Silver/PM goes underground into the Black Market, watch its value go so parabolic that time itself slows down.