12
Mar
09

Could our Country Go Belly-Up

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A thought that had never really crossed my mind was: Could the United Sates go broke!

Yes, I guess it could in the international community’s eyes, which is an alarming possibility.  I know this is a negative thought to contemplate when President Obama’s Stimulus Package is just beginning to work (see here and here) and we have two straight days of gains on Wall Street, but really who would have ever thought we would be in the economic troubles we are experiencing today.

In an article by TIME online the author presents this possibility, but this same article doesn’t really explore the events that could lead-up and cause our “kiss of death” of financial bankruptcy.  Think about it for a moment!

Should we suffer through another conflict, such as what is happening in Iraq and Afghanistan, or even worse a full on war with a supper power this could really drain the money reserves our country has nest-egged away.  Also, what about an issue we seem to avoid talking about and only rendering token understanding, which is, Global Warming.  Suppose the world starts going into a free-fall mode of heating up?  Again, our cash reserves would have to come to the rescue.

OK, enough gloom and doom, but I think we had better start watching and voicing our opinions to our politicians, letting them know the days gone by of spend, spend, spend or coming to an end and want to starting seeing where our money is going and for what!

Here’s the article I was referring to in TIME, entitled: “Betting the U.S. Government Won’t Pay Its Debts

America Going Belly-Up

America Going Belly-Up

Betting the U.S. Government Won’t Pay Its Debts
Douglas A. McIntyre
By 24/7 Wall St. Wednesday, Mar. 11, 2009

It is one thing when someone can’t make a mortgage payment or a company cannot cover the interest on capital it borrowed to build a new factory. In a recession, those kinds of events are commonplace. It probably never crosses the mind of the average citizen that the ability of the U.S. government to borrow money for deficits, bailouts, mortgage-assistance programs, and refurbishing the monuments in Washington is not limitless. The term infinite may apply to the cosmos but it does not apply to the debt carried by the U.S. Treasury.

MarketWatch pointed out that the spreads on credit-default swaps for U.S. government debt jumped to 97 basis points Tuesday, nearly seven times higher than a year ago and 60% higher than at the end of last year, to a level roughly in line with those of France, according to data supplied by Markit. Those swaps are gambles that America will renege on its financial obligations. Being on par with France is even more humiliating than if we were compared to Cameroon which had a GDP of only $44 billion last year, less than Bernie Madoff took from his clients.

While it may be hard to imagine, what the market’s response means is that the economic crisis is so serious now that it is believed that the United States Treasury may not have the capacity to keep a net under all of the faltering bits and pieces of the financial and credit systems. Traders are sending a message and have decided not to be subtle about it. America is spreading itself too thin. It has taken on obligations to assist many of its largest financial institutions, aid hundreds of thousands of homeowners, create jobs through an economic stimulus package, and give a large portion of the working population tax cuts. Wealthy citizens and corporations will be required to pay more to offset these obligations. This income will only make a difference if these sources have more to pay. A deep recession can be a great leveler.

As economic data for the first quarter begins to come out in April and then second quarter information is released in July, it will become clear whether the idea that the Treasury can borrow enough money to right our national economic ship is plausible. There is absolutely no reason to believe that if GDP contraction hits 10% for a quarter or two and then unemployment increases to double digits that the government will be able to solve what the free market system cannot.

The most alarming information that the federal government should give up before it gets deeper into debt comes from experts who join business TV news show hosts. Simply stated, they argue that the economy got itself into this mess and it will have to get itself out. This idea destroys the belief that the government has the power to protect the financial interests of its own people and companies. It is a philosophy that will create despair in almost all quarters because it is based on the idea that we are on our own in this economic fight for survival. Our government cannot intercede for us.

If the U.S. government starts to have even a modest amount of trouble raising money, the concept of its citizens becoming self-sufficient will take on an entirely new meaning.

Complementing the TIME article is a YouTube video, which is more or less a tough-in-cheek comical view of how one Newscaster feels about our Federal Reserve (worth a careful watch).

Fat Glenn Shows Us Why America is Going BROKE!

Glenn puts on a great show as he shows us why our money is going in the dumper.

I have the small amount of precious metals and food storage I can afford and I hope you do too.

Here is a little info on the Federal Reserve Bank

The Federal Reserve Bank is NOT actually part of the Federal government. It is no more Federal than Federal Express, or Federated Department Stores. It is a private corporation with a legislated monopoly on currency and credit that is allowed to BUY its paper currency for nothing more than the cost of the paper, the ink and the labor from the Bureau of Printing & Engraving (U.S. Treasury). Originally this added up to about 2.3 cents per note, or $230 of cost to buy one million dollars (10,000 100 dollar bills). Today the cost is apparently still about the same.

The Federal Reserve Bank has never paid a dime in income tax and has never been audited, and a percentage of this private bank is owned (or controlled) by foreigners (or their corporate shells)!!

Can you buy your money for $230 per million ?

What happened to equal opportunity ?

“The Federal Reserve Banks are privately owned, locally controlled corporations”
[Lewis vs. U.S., 680 F.2d 1239, 1241](1982)

“As we have advised, the Federal Reserve is currently paying the Bureau approximately $23 for each 1,000 notes printed. This does include the cost of printing, paper, ink, labor, etc. Therefore, 10,000 notes of any denomination, including the $100 note would cost the Federal Reserve $230. In addition, the Federal Reserve must secure a pledge of collateral equal to the face value of the notes.”
– William H. Ferkler (Manager Public Affairs, Dept. of Treasury, Bureau of Engraving & Printing, Wash. D.C.

“It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
– Henry Ford, Founder of the Ford Motor Co.

Why are private unelected individuals controlling the American currency system ? Vrtually running the country, the stock market, the banks, the lending rates, nearly everything ? Where is any of this in the Constitution?

Do you really believe they are representing We the People with their policies?

If you do, you aren’t thinking clearly!

Why are private unelected individuals controlling the American currency system ? Vrtually running the country, the stock market, the banks, the lending rates, nearly everything ? Where is any of this in the Constitution?

Do you really believe they are representing We the People with their policies?

If you do, you aren’t thinking clearly!

“AS GOES THE FATE OF THE CURRENCY, SO GOES THE FATE OF THE NATION !”

As this posting eludes to: Our nation is in serious economical trouble, but it’s good hear President Obama is pulling the plug on reckless spending by attempting to put a stop on needless earmarks, as can be seen in his remarks, which I have partially posted.

Remarks by the President on Earmark Reform
from White House.gov Press Office Feed

THE PRESIDENT: Good morning. I ran for President pledging to change the way business is done in Washington and build a government that works for the people by opening it up to the people. And that means restoring responsibility and transparency and accountability to actions that the government takes. And working with the Congress over my first 50 days in office, we’ve made important progress toward that end.

Working together, we passed an American Recovery and Reinvestment Act that’s already putting people back to work doing the work that America needs done. We did it without the customary Congressional earmarks — the practice by which individual legislators insert projects of their choosing. We’re implementing the Recovery Act with an unprecedented level of aggressive oversight and transparency, including a website — recovery.gov — that allows every American to see how their tax dollars are spent and report on cases where the system is breaking down.

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2 Responses to “Could our Country Go Belly-Up”


  1. 1 Art
    March 13, 2009 at 3:05 AM

    With all the talk about buying American, I decided to do a little research and found the americanboom.com site. It has profiles of American companies gives good insight on how we should spend our money and some great companies to support.

  2. 2 Tom Awtry
    March 13, 2009 at 4:27 AM

    Art,

    Thanks much for the comment and especially the informative link provided.

    Regards,
    Tom


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