The actual posted national debt of the US is $14.1 trillion.
However, the US reports its finances on a cash basis while omitting its unfunded obligations in such items as Social Security, Medicare and Medicaid and various other entitlements. If the entitlements are included, the total national debt including unfunded obligations would be over $100 trillion.
Wait, it gets worse. Entitlements, defense and interest on the national debt takes up 80% of the entire budget of the US. That leaves just 20% that can be sliced away if the US wants to actually cut into its deficits. So what's left to cut? Actually, nothing that's politically feasible.
To make the picture even more grotesque, the first group of baby boomers is now reaching the retirement age of 65. As they leave the nation's work force, the problem of financing Social Security becomes more difficult if not impossible.
So what in God's name is the answer to all this? How will the US's finances be handled? There are only two ways that I can come up with:
The first is -- to default, just declare that the nation is dead broke and it can't meet its obligations. That would be tantamount to admitting that the US is less than a third-rate power, a dying banana republic. Unthinkable.
The second way would be to devalue the currency to the point where obligatory dollar debts would be financed or paid off with dollars equal to pennies or nickels.
It's now really a question of timing. With the national debt compounding at rising rates, the problem of financing the debt becomes ever-more pressing. For this reason, I believe the process of devaluing the dollar will have to be speeded up.
From the government's standpoint, the deliberate devaluation strategy must be kept secret from the public. They must not be allowed to know that the currency they've worked so hard for, that the currency their savings are in, is to be crushed into a shadow of its former self. Ultimately, the awful truth
must come out.
At some point the government may be forced to be honest. The phrase will be three words that I coined many years ago: Inflate or die. And, the government's answer will be, "You wouldn't want this nation to die, would you?"
We have no choice, but to pay off, or carry, the debts, with a currency that must be devalued down to ten cents on the dollar.
You don't have to be a genius to read the US Dollar chart. Most recently, the Dollar Index dropped through the bottom of the consolidation. Today the cash Dollar Index plunged again (OMG) to 76.99!
At this point, the Dollar Index is oversold and probably overdue for some kind of a rally.
Well, maybe.
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"unfunded obligations in such items as Social Security". Since when was SS ever unfunded. Just more Newspeak.
ReplyDeleteErrrrrrm Sunfighter really?...Never read how the feds take what is put into SS and use some of it like a Ponzi scheme and then leave IOU's? Really?
ReplyDeleteI mean you're either kidding, being sarcastic or...Sam is that you?
Forbes article:
http://www.forbes.com/2009/05/14/taxes-social-security-opinions-columnists-medicare.html
Or NCPA:
http://www.ncpa.org/pub/ba662
Etc etc etc.
The situation isn't hopeless. All you have to do is give up all your constitutional rights and Obama will solve all of our problems.
ReplyDeleteNoodles123:
ReplyDeleteun·fund·ed
ADJECTIVE:
1. Not funded, as a floating debt.
2. Not furnished with funds: an unfunded
project.
Funds = FICA
Newspeak = 1984
Duh
For those newly interested in buying gold or silver for security and wealth preservation and who know little about these markets , Peter Shiff explains “leveraging” and “margin calls” and the huge losses that can easily be made.
ReplyDeleteBeware!
Why you should only get physical!
“A new craze among our competitors is to push gold buyers into "leveraged accounts." In one of these accounts, the dealer lends you money to buy gold, on the assumption that gold will go up faster than the rate of interest on the loan. In other words, if you call with $5K, they'll give you another $20K in credit to make a $25K total purchase of gold bullion.”
“The sales pitch is that since we all know gold is going up, you might as well maximize your returns by leveraging up. What they don't often mention is what happens if gold goes through a correction. You'll likely be asked to send in more cash for a "margin call." If you don't, they'll sell your gold for a substantial loss…”
..Unfortunately, the leverage rip-off doesn't end with margin calls. Expect to pay commission on the entire value of the purchase. If you have to pay 3% commission on the whole $25K, that's actually 15% of the $5K you invested.
Then, there is interest on the $20K loan, which may run you 8% per year, adding an additional $1,600 in the first year of holding. With the commissions, this amounts to a staggering 47% of your original $5K investment!
Tack on leasing fees, transaction fees, administration fees, storage fees, delivery fees... with many of these accounts, it is nearly impossible to come out ahead.
http://thedailybell.com/1732/Peter-Schiff-The-Simple-Truth-About-Gold-Leverage-Programs.html
replaced with special issue treasuries. IOU's, up to any to consider that as funded..lol
ReplyDeletebenanke himself say's unless we reign in this debt there's a looming crises..meanwhile geitner say's unless we increase the debt ceiling there's a looming crises...ain't that funny LOLOL damned if we do, damned if we don't. think they'll opt for door 2..devalue the currency and increase the ceiling.
old saying, if your needs are met your successful, with devalued currency can we eat-yeah(helps to grow your own)..can we shop every weekend..no, as a non-shopper many will do fine but many will have a hard time without ..stuff... interesting occurance last yr, for the 1st time the social security fund had to dip into it's special treasury drawer and sell some to fund the ss system, all coming just in time for the baby boomers retiring in masses
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