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keys
Penny Collector Member
383 Posts |
 Posted - 05/24/2009 : 17:25:01
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I don't know if another member posted this or not but it is worth repeating....
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"We are out of money." Barack Obama May 23, 2009
Obama openly says what anyone with common sense has known for quite some time: the US is broke, and will not be able to honor in full its financial and fiduciary obligations.
The question remains how the US restructures that debt and how big a haircut the debt holders will take as a part of it.
20%? 30%? More like upwards of 50% at least in real terms.
And who are these debt holders?
Anyone who has Treasury debt obligations and financial assets, from the Long Bond to the US Dollar, and financial assets guaranteed by the Federal Reserve and the Treasury.
Technically the debt will be serviced and the interest paid according to the terms of the agreements, with devalued US dollars.
The process will continue until the debt is restructured and the dollar is replaced with a new dollar. This may take some years.
Oh, don't worry too much. There will be spin and qualifications piled upon this admission, most likely before the markets open in Asia on Monday. But this trial balloon of admission is how you start breaking the bad news to people unwilling and ill prepared to receive it.
But regardless of what is said, we are now in the endgame for a credit bubble of historic proportion.
The Incontrovertible Truth About Debt, Deleveraging, Devaluation and Recovery
Why the US Has Gone Broke: Chalmers Johnson
DrudgeReport
'WE'RE OUT OF MONEY'
Sat May 23 2009 10:32:18 ET
In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."
C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.
SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?
OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.
So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.
So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.
So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now.
Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything...
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Perfect timing for Washington DC to reveal this information, when almost everybody in the US is away on Memorial Day weekend.
Perfect defection technique to try to blame healthcare costs as the cause of the US being out of money.
I have no ill will towards President Obama, he has a thankless job being the President of a nation that is hopelessly in debt AND has been for decades, and he will probably get the blame for the economic mess that the US is now in.
I do however have a dislike towards ALL politicians,
Dumblicans and Dumbocrats alike
since none of them made any efforts to try to reduce the deficit, reduce their own salaries or benefits, symbolically or otherwise, or try to find ways to stretch out the debt in an affordable timeframe.
You have heard of 40 year and 50 year mortgages? Why not 40 or 50 year Treasuries? Why not offer oil exporation off of US Coasts with the understanding part of the oil brought to the surface would go to the US Government to fill its oil reserves or sell on the open market with proceeds to pay down the national debt?
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We all knew the US Dollar's days were numbered, looks like our expectations of worse case scenario have come true.
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I change with the times-
but like silver coins found in your change
I stay the same.
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The United States of America started out as the new Republic of Rome.
Will The United States of America end up as the New Imperial Rome? |
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buyingsilvers
Penny Collector Member
441 Posts |
 Posted - 05/24/2009 : 19:02:58
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I do however have a dislike towards ALL politicians,
Dumblicans and Dumbocrats alike
Nice to see that your eyes are open.
I however, do blame Obama. The Wallstreet firms have stronger influence over policy than ever. He accelerated the spending many X what any other president has done before. If the US is a semi-truck heading for a cliff, he just stomped on the accelerator and shifted to a higher gear. |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 05/25/2009 : 21:43:42
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Bush was bad at managing spending of Congress. Obama is down right awful at it. I mean Bush looks responsible compared to Obama, and that is down right sad.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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Neckro
1000+ Penny Miser Member
Saudi Arabia
2080 Posts |
Posted - 05/25/2009 : 21:58:11
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| I'm pointing the finger at Clinton, for setting us up for failure. |
Trolling is an art. |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 05/26/2009 : 10:46:19
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Well, Clinton did spend badly too. The problem there is that he had the revenue coming in to spend like that. He ran budget surpluses. Go back and look at history.... Clinton in spending vs revenue was a rare bird.
I really think the problem is government doesn't want to tax/spend at the right levels. If they want to spend $3 Trillion a year, then fine.... tax to that level. Bush/Obama wanted/want to cut taxes and spend like a teenage girl. Well, Obama isn't really cutting the level of taxes, but the economy has cut the inflow of revenue for him.
All we need to do is limit Congress to spending incoming revenue and limiting debt to say 80% of GDP. Total debt being Treasuries and Current ABO of Social Security and Medicare. We just need to get onto a plan to get to those levels, then cut taxes and maybe future reduce debt after that.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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keys
Penny Collector Member
383 Posts |
Posted - 05/26/2009 : 21:10:59
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We can go back to Reagan and the deficit going into one trillion dollars and the arguement "deficits don't matter"
We can go back to the Johnson administration (butter AND guns)
and the attitude eexpressed to the world "its our dollar but its your problem"
We can go back to FDR supporting Keanesian ideas
in the end, both parties have had one main goal-get elected or re-elected. The budget/dollar problem is a can to kick down the road. Unfortunately, the road has reached a dead end.
It has been said that no FIAT currency lasts very long, so I should not be suprised if further depreciation is inevitable.
I guess I am just disappointed that our leaders are acting the way they that they are (kicking the can down the road) though a study of Roman History should have taught me to expect this.
I guess this nation is becoming Rome part II. |
I change with the times-
but like silver coins found in your change
I stay the same.
*****************
The United States of America started out as the new Republic of Rome.
Will The United States of America end up as the New Imperial Rome? |
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Nickelless
Administrator
USA
5580 Posts |
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Dollar news
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