- Note: One Year Chart of the Baltic Dry Index (left)
- Timothy Geithner, U.S. Treasury Secretary, admitted in a letter to congress dated January 6th, that the United States Treasury would be forced to default on its credit obligations without clearance from Congress to raise the amount of money that the treasury is allowed to borrow.
After citing a list of "extraordinary measures" Congress has had to resort to in the past to avoid entering a state of default, Geithner stated, "Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations. The extraordinary measures include, "suspending sales of State and Local Government Series (SLGS) Treasury securities; suspending reinvestment of the Government Securities Investment Fund (G-Fund); suspending reinvestment of the Exchange Stabilization Fund (ESF); and determining that a "debt issuance suspension period" exists, permitting redemption of existing, and suspension of new, investments of the Civil Service Retirement and Disability Fund (CSRDF).
- That the United States has already defaulted on its obligations is beyond dispute, at this point, as its the rate at which its debt service obligations is growing exceeds the rate at which the United States GDP could possibly grow, meaning that without drastic cuts to government spending, the debt can only continue to grow.
Before our very eyes, the so-called leadership of the world's largest economy is intentionally bankrupting the country and devaluing its currency in what can only be a precursor to rampant inflation.