The Government Is Bankrupt and Will Destroy The Economy

Most people don’t understand the unsolvable problem the US government has created for itself and its citizens. Sovereign default is beyond a likelihood; it is inevitable. When and which (possibly all) obligations are defaulted on are to be determined. Panicked political decisions, likely in the near future, will produce a complete financial and economic collapse. Hopefully that is the worst [...]

The Tragedy of Ben Bernanke

Sometimes a seminal event passes unnoticed.  Subsequent developments and hindsight eventually place it in proper perspective. Just such an event may have happened or be in the process of playing out regarding Ben Bernanke, Chairman of the Federal Reserve. Ben Bernanke’s Warning Mr. Bernanke expressed the following regarding the precariousness of our economic and financial situation (my emboldening): By definition, [...]

How The Country Dies

Carefully read the following from Chuck Butler: Did you know that in 2011, The Fed purchased 61% of the total net Treasury obligations that were issued?  Prior to 2008, the amounts that the Fed would purchase were negligible at best! Deficits are not being reduced in the US. This year will be equivalent to last year. Future years are not [...]

Musings on Gold –Voltaire, Panama and Dollar Mutiny

The life of the dollar as the world’s reserve currency is coming under pressure from both large and small countries. The conc*ern is from allies and non-allies of the US. As expressed by Jim Willie: The developing nations of the world are in revolt against the USDollar. They see no future in holding US$-based bonds in reserve. They see no [...]

Gross Says US In Worse Shape than Greece

Bill Gross as head of Pimco was the largest non-sovereign investor in US Treasuries. He sold all his bonds and reportedly even went short. It does not appear he will return to Treasuries for a while (perhaps not in his lifetime). From an interview on CNBC (video available), Jeff Cox reported Gross’ view of the US: When adding in all [...]

Beginning of a Run to Abandon Treasuries?

We live in interesting and dangerous times. Is this the beginning of a run from Treasuries by foreigners? There was one truly interesting observation in this week’s Fed balance sheet update: not that the actual balance sheet hit a new all time record (which it did at $2.779 trillion), or that the Fed added another $24 billion in Treasurys to [...]

Debt Ceiling Not The Problem; Death Spiral Is

The Treasury is out of money, but not out of games. According to Now that it has finally been made clear that in order to accommodate the debt ceiling by adding marketable debt, the Treasury has no choice but to literally plunder retirement accounts, we now know that in order to fit in the just announced $110 billion in new [...]

Flim-Flam Economics

The article below focuses on “the biggest flim-flam in the nation’s history.” Now that’s saying a lot, however in terms of the magnitude of dollars, it may well be. No, it’s not Bernie Madoff or any other private institution. Mike Whitney refers to the Federal Reserve’s monetary policy in response to the economic crisis when he applies the term flim-flam. [...]

China Continues to Back Off

As our deficits grow, less debt is being funded internationally. That means more QE in order for the government to continue paying its bills. This is not a good sign. China has clearly reduced their involvement in funding our debts. At some point, interest rates on Treasuries start to rise and the dollar starts to deteriorate in value. That is [...]

The Sausage-Making of Financial Reform

Another excellent clip from MSNBC’s Dylan Ratigan show. It is an interview with Eliot Spitzer and Jonathan Alter regarding the “Volcker Rule” and the obstructionists in the Obama Admininistration.

Old Pro Says Run for The Hills

Via Les Jones (images not in original): Richard Russell: “Sell Everything Liquid, You Won’t Recognize America By The End Of The Year” Wednesday May 19th, 2010 Via iTulip: About Dow Theory — First, we saw the recent April highs in the Averages. Then we saw a plunge in both Averages to their May 7 lows — Industrials to 10380.43, Transports to 4298.12, [...]

Our Tax System

From the Wall Street Journal: “One item that doesn’t fall into the it-could-be-worse department … is the U.S. corporate income tax. It’s already about as bad as can be. This year, American businesses may spend 89 cents preparing their taxes for every dollar they pay in taxes. In a new estimate, David Keating of the National Taxpayers Union estimates that the [...]