thomhartmann
June 17, 2009
Pt 2
see
The American Empire Is Bankrupt by Chris Hedges
De-Dollarization: Dismantling America’s Financial-Military Empire by Prof. Michael Hudson
Shanghai Cooperation Organization: Prospects For A Multipolar World by Rick Rozoff
The Looming Collapse of the American Empire by Chris Hedges
Six Minutes with the Renegade Economist: Michael Hudson
But Governor, You CAN Create Money! Just Form Your Own Bank. by Dr. Ellen Brown
Cash-Starved States Need To Play The Banking Game: North Dakota Shows How by Dr. Ellen Brown
Dandelion Salad 
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Here’s something to back up the collapse prediction, from Bill Bonner.
GOV is betting the farm on a continuance of bond sales. Here are some numbers from Bill Bonner;
“The government chalked up a $189 billion budget deficit last month alone, another record and the eight straight monthly deficit. We suspect they’d love to take a break from force feeding the market notes and bonds, but they can’t…the Treasury will have to auction $2 trillion in debt this year just to keep the lights on.”
Keep in mind that GOV is paying out $ 2trillion this year in benefits.
“The weakening dollar and Fed activity aimed at dollar debasement have contributed to declining demand for U.S. Treasuries. With low fundamental investor demand for Treasury securities, the Fed increasingly will have to monetize U.S. Treasury borrowings”
“”As non-demand-driven inflation and money growth begin to pick-up, so too should the velocity of money” It’s just not going to happen. NOBODY is going to spend money
Many people are betting on inflation. It would require a wage-price spiral. Wages are dropping. If prices rise, people will just buy the necessities. There won’t be an overall gain in commerce.
We march to the edge of a cliff. That cliff is represented by a failure in the sale of treasury bonds. Just like Weimar Germany, GOV has no choice.
“The U.S. government announced yesterday it will auction a record $104 billion in debt next week,” writes Ian in today’s issue of The 5.
“Despite obvious warning signs that the world has had its fill of American paper, the Treasury will forge ahead: $40 billion in 2-year’s Tuesday, $37 billion in 5-year notes Wednesday and $27 billion in 7 year garbage on Thursday.”
“While the private sector during the bubble years brought U.S. debts to a record 3.7 times the entire nation’s output, now it’s the public sector that does the borrowing. The Obama Administration is adding to the accumulated U.S. debt at a suicidal pace – four times faster than the record set just last year. And America’s central bank hands the borrower a loaded pistol; it is adding bank reserves – which allow the money supply to expand geometrically – at a 4,500% rate. ”
I still maintain that this money is not moving into my hands or Joe, the plumber’s hands. GOV is trying mightily to infuse the money into the economy and create inflation. People are refusing to add on more debt so the $ trillions remain in the bank vaults as unborrowed reserves.
The banks are sitting on $ hundreds of trillions of bad loans and bad derivatives but, only $ trillion of our money. They are sincerely hoping for hyperinflation to reduce their future debt load. With the present unemployment there won’t be demand or high inflation. The incoming wave of Alt-A and Option-Arm loans is already defaulting at 20%. The banks don’t have a prayer of surviving. Since the overall health of the banks is a big part of the perception of a healthy economy, the bond sales are tied to the fortunes of the banks.
The banks strive mightily for inflation but,ignore the producing economy. If GOV just sent $ 1 million to every person in the country, that would definitely fire up some inflation. BUT, the banks insisted that the money be LOANED, not given. Just as their greed got them into this, it won’t let them exit.
The inflation that the banks hoped and tried to induce in the general economy is all concentrated in the banking industry and GOV. Pretty funny, if you ask me.
When the short-term treasury auctions start to fail, that will cause an exodus from investments in GOV. There is speculation that much of the treasuries are bought by Carribean banks that are controlled by the CIA. Who knows?
The FED is a bunch of Rothschilds and Warburgs, et al. They aren’t risking their pot of gold because everything that they create out of thin air is monetized by the treasury. The Treasury isn’t risking anything because the U.S. doesn’t have any way to repay it’s debt. Once investors figure out that THEY are left holding the bag, they may just exit.
“reparations – adjusted to today’s money. But America’s debts are far grander than those of Germany in 1923 – even relative to the size of the US economy. Where Germany owed a little over $1 trillion; America – if you include private debt, official government debt, off-budget obligations and internal commitments – owes 100 times as much. And the United States keeps borrowing more. In a single year – 2009 – it will borrow $1.3 trillion, again, just shy of the debt that sank the Weimar Republic. ”
“Butch, what say we go to Bolivia?”