Wikipedia describes the use of animals as early warning sensors. Canaries were used by miners: The classic example of animals serving as sentinels is the canary coal mine. Well into [...]
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Feb 012012
This response is from a regular reader sent directly to me. I blocked out his name only because I don’t know whether he wants it to be revealed. I am in complete agreement with what he says. It is precisely this reason that I believe the situation is hopeless.
As I have said on other occasions, the situation might be resolvable with a hard-nosed turnaround specialist in charge. Even here, the emphasis is on “might!” In a political context where citizens have been conditioned to believe they are entitled to live at the expense of government (read that to mean other citizens because government has nothing that it first does not take from someone else), the situation is beyond hopeless.
Instead, our politicians pretend and lie about the true economic condition, which is equivalent to dead man walking.
Monty,
Today the CBO released “The Budget and Economic Outlook: Fiscal Years 2012 to 2022″.
http://www.cbo.gov/ftpdocs/126xx/doc12699/01-31-2012_Outlook.pdf
It is ridiculously long…but make sure to look at pages 14 & 67… They are the 2 most important pages in the report…in my opinion.
The CBO is projecting a $1.079 Trillion deficit in 2012.
And they are projecting Spending to skyrocket to $5.520 Trillion in 2022 (from $3.598 Trillion in 2011).
Congressional Budget Office reports another $1 trillion deficit
http://www.politico.com/news/stories/0112/72205.html“The government faces a fourth year of trillion-plus deficits in 2012, according to new projections released Tuesday—numbers which also show little relief in the future unless Washington comes to grips with needed changes in its tax and spending policies.
The $1.079 trillion deficit now projected for this fiscal year ending Sept. 30…”CBO: Taxes Will ‘Shoot Up by More Than 30 Percent’ Over Next 2 Years
http://cnsnews.com/news/article/cbo-taxes-will-shoot-more-30-percent-over-next-2-years“According to the CBO report, federal tax revenues equaled $2.302 trillion in fiscal 2011, and will increase to $2,523 trillion in fiscal 2012, $2,988 trillion in fiscal in 2013, and $3,313 trillion in 2014.
As a percentage of GDP, according to CBO, federal tax revenues were 15.4 percent in fiscal 2011, and will be 16.3 percent in 2012, 18.8 percent in 2013, and 20.0 percent in fiscal 2014.”America already has a $15+ Trillion National Debt — 100% of GDP (and rising).
The U.S. fiscal crisis can be simply summarized. Since 2009, the federal government Continue reading »
Aug 052011
David Walker, former Comptroller General of the US, is quoted by David Panzner:
“We are not exempt from a debt crisis,” he said. “We’re never going to default, because we can print money. At the same point in time, we have serious interest rate risk, we have serious currency risk, we have serious inflation risk over time. If it happens, it will be sudden and it will be very painful.”
He also stated that we are less than 3 years away from becoming Greece.
Chris Martenson on the Investor Problem:
Debt Ceiling Dilemma: The Foul Choice Facing Investors
Thursday, July 28, 2011, 10:23 am, by cmartenson
For the record, I still believe that there will not be a breach of the debt ceiling and no overt default for the US. Things will be worked out in the nick of time, like they always are.
However, the media is full of articles wondering about what ‘investors’ might do in response to a US default and/or credit downgrade. What will happen to Treasury prices? Will they go down as investors dump them en masse in response to a credit downgrade forcing interest rates to climb?
It’s a big question and the most likely answer is “No, not really”. Partly because these so-called investors have been well-conditioned to believe that another bailout is always around the corner, but mainly because they have nowhere to go.
The big money is trapped.
May 062011
The following video outlines the debt problem. Unfortunately the interest cost is greatly understated. I believe the presenter makes his calculations based on interest rates holding constant at their current low levels while calculating future interest expense. That will not happen. Interest rates are more normally in the 5% range rather than the near zero levels today. Because most of the government debt is short-term, as it is rolled over it will be financed at higher interest rates.
To provide an example, if we were paying 5% on our current level of debt today, our interest payments would increase by almost $700 billion per year. Thus, we would be over a Trillion dollars per year in interest without any new debt, merely by a return to normal interest rates. All of his figures, as damaging as they might be, would have to be adjusted up accordingly.
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Bill Gross Warns on Bonds
A Great Economist?
The Canary Is Dying and So Is Our Future
Treasury Bubbles About To Burst
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