Friday, December 9, 2011

Troubling Economic Report: The United States' 0% Folly!

When anyone these days turns on their Talmud-Vision, and listens to all of the corporate controlled shills on the corporate controlled news stations speak about the economies around the world, the news is either severely distorted with outright lies stating that the situation is improving, or some reporters have actually been brave enough to admit that the situation is really bad.   


What is especially troubling is the constant news coming out of the United States media that constantly claims that the nation is "on the road to economic recovery" when the truth is that there is absolutely NO chance for any recovery unless a total change to the criminal economic policies and the entire banking institution in the United States takes place.


For this article, I want to present the following report from Jeff Nielson, through the website: Bullion Bulls Canada, at www.bullionbullscanada.com, entitled: "The U.S.'s 0% Folly", and gives a startling summary of the real economic situation facing the United States (and much of the entire world) today.   Here is that entire report, and I do have some additional comments to follow:



The U.S.’s 0% Folly




Written by Jeff Nielson
Thursday, 08 December 2011 13:34



The U.S. is more fundamentally insolvent than Greece, yet Greek interest rates are fifty times higher than those of the U.S. This is obviously market fraud, and on a scale never before seen in human history. I (and others) have explained the mechanism here on several occasions: the fraudulent manipulation of the credit default swap market. It’s old news.
However, what no one has pointed to yet is how the U.S. has totally squandered its last chance to avoid either debt default, hyperinflation, or both. I’ve mentioned previously what the fate of the U.S. would be if its own interest rates had been fraudulently manipulated to the same levels as that of Greece.
Interest payments alone on the national debt would be more than four times total government revenues. This means the U.S. would have to completely shut down every branch and department of the U.S. government – including its entire military, and even Congress itself – and would have to totally end all government transfer payments. And evenafter that, taxes would have to be quadrupled merely to pay interest on its debts. This is what the Wall Street terrorists did to Greece.
Conversely, the same fraudulent mechanism which has been used to push-up interest rates all across Europe has been used in reverse, to fraudulently minimize interest rates (and payments) for the world’s biggest deadbeat-debtor. And what has the U.S. government done with these extra years of ultra-light interest payments – courtesy of Wall Street? It has squandered every second of that time and every dollar saved in interest payments, in more of the petty partisan squabbling which has characterized the U.S. government as the world’s most dysfunctional “democracy” (for lack of a better word).
Several years of talking about deficit-fighting has yielded absolutely zero progress. Of course this hasn’t stopped the U.S. from lecturing European leaders about their “fiscal irresponsibility”. Hypocrisy remains the U.S.’s leading export. The latest deficit-fighting gimmick – the ridiculously over-hyped “Super Committee” – not only accomplished nothing, but it pushed the two, juvenile political parties even further apart, as the twelve “sober individuals” appointed to that farcical committee simply intensified the political divide.
What obviously none of the seat-stuffers in the U.S. Congress understand (along with the Obama regime itself) is that the U.S.’s 0% honeymoon cannot be maintained indefinitely – no matter how much it facilitates the serial stealing-by-dilution by the Wall Street crime syndicate. It’s impossible to predict precisely how this fraudulent 0% rate will detonate, so here are a few possibilities.
The most obvious way in which these “bubble” interest rates will end is via hyperinflation. As I already explained in a previous commentary, any currency which can be produced in infinite quantities and at zero cost is worthless – as a simple tautology of arithmetic.
Otherwise, with 0% interest rates, one could simply borrow “infinity” dollars (and with 0% interest there would never be any payments on that money) and then simply “buy” every asset on Earth – and with “infinity” dollars, one could even afford to overpay for everything on the planet. Indeed, buying up all assets is precisely what the Wall Street crime syndicate is doing, except it’s being done in slow-motion – so that the scenario I just outlined doesn’t become obvious to even the clueless stooges in government and the media. As with “Tulip Mania” four hundred years ago in Holland, it is not a question of “if”, only when people will realize that their worthless currency is worthless.
Of course this is only one way in which hyperinflation could hit the U.S. economy. The sheer quantity of paper currency being cranked out by the Federal Reserve and the fractional-reserve fraud-factories of Wall Street could also, easily spark hyperinflation. Even with all of the propaganda lies and market manipulation, commodity prices remain permanently on the verge of spiraling out of control. Indeed, Wall Street’s efforts to hold down commodity prices actually guarantees this.
I have explained this in a previous commentary. All “shorting” (and other forms of price suppression) must lead to both over-consumption and under-production, simultaneously. Fraudulently low prices cause buyers to over-consume, while being under-paid for their commodity discourages producers from producing. The ultimate, inevitable result is market after market imploding – as inventories are totally depleted. And then prices will spike to even higher levels than if there had been no manipulation at all. At that point (at the latest) hyperinflation will overrun the U.S. economy.
There is yet another way in which hyperinflation could be ignited in the U.S.: exponential increases in the deficit. Even with the fraudulent manipulation of debt markets by Wall Street, it is impossible for the U.S. to have the lowest interest rates and the strongest currency – simultaneously – since these two occurrences are mutually exclusive, again as a matter of simple economics.
As we have seen for the last several years (and despite all the absurd propaganda to the contrary), a “low dollar” cripples rather than stimulates the U.S. economy. The pattern has been obvious and the arithmetic is incontrovertible. Each penny lower the U.S. dollar drops causes the rising cost of imports (primarily imported oil) to greatly exceed any/all increases in U.S. exports. Every time the U.S. dollar goes down, the trade deficit goes up.
Worse, with the U.S. remaining the world’s premier oil glutton, and utterly dependent upon the ravenous consumption of oil to prevent immediate economic implosion, the rising price of oil functions much like a highly punitive sales tax – it seriously slows/impairs virtually every facet of the U.S. economy except the financial sector (since it requires very little oil to do nothing but print paper and swindle investors).
What is the U.S. government’s “solution” to this dilemma? To literally burn the world’s food supply in order to meet its gluttonous energy demands. Thus if rising oil prices don’t trigger U.S. hyperinflation, the pending hyperinflationary explosion in food prices will.
With all roads leading to the chasm of hyperinflation, how can the U.S. swerve away from that looming cliff? There is only one economic mechanism which could even partially reverse the economic drivers outlined above: raising U.S. interest rates. It is hear we can truly comprehend the deadbeat status of the U.S.
The U.S. economy currently carries somewhere in excess of $60 trillion in total public/private debt (which doesn’t include one penny of the additional $100+ trillion in unfunded government liabilities – liabilities which are now coming due). Increasing U.S. interest rates by even a paltry 1% would add $600 billion/year in additional interest payments to the U.S. economy. This is equivalent to an immediate drop in U.S. GDP of 5% - even before factoring in the numerous “multipliers” which would work to significantly increase that plunge in GDP.
A 1% increase in interest rates would cause immediate economic collapse in the U.S. – while being totally insignificant in reversing inflation. Even if U.S. interest rates were 1% higher they would still be close to the lowest in the world, meaning further weakness rather than strength in the U.S. dollar.
Conversely, the U.S. economy could easily implode in the reverse manner: via a devastating debt-default at least as ugly as what took place with the Soviet Union. We know (via its policies) that cheating its creditors through diluting its currency is the preferred means of (unofficial) debt-default for the U.S. government. With the Federal Reserve having already reduced the value (i.e. the purchasing power) of the U.S. dollar by 98%, eliminating the last 2% of “value” is as easy as it is inevitable.
However, in trying to delay that fate as long as possible the U.S. could trigger a sudden debt-default – in spite of Bernanke’s “magic” printing press. With government revenues continuing to erode while spending remains utterly unchecked, Helicopter Ben is walking a tightrope. If he prints too much money all at once, hyperinflation instantly detonates. If he miscalculates, and prints too little, the U.S. government could abruptly be facing a massive revenue gap: the result of constantly lying about its own economic projections, while continuing to do absolutely nothing to rein-in its fiscal irresponsibility.
At that point the U.S. would be facing the proverbial no-win scenario: the sudden need for $trillions more in money-printing would guarantee immediate hyperinflation, while failing to print the $trillions would mean immediate debt-default. Given that debt-default is (by far) the more benign of those two “Hells”, debt-default for the U.S. economy remains a likely outcome as well.
The only outcome which remains totally improbable is that the morally/intellectually bankrupt members of the U.S. government will suddenly end their endless posturing and bickering and actually work to make the U.S. economy better – rather than merely being facilitators of economic Armageddon.
It is tragically ironic that the people whom the Wall Street crime syndicate have been the most successful in duping with the endless lies disseminated by its propaganda machine are their servants in the U.S. government. Indeed the vast majority of these dupes could pass a polygraph test, still claiming that the U.S. has “the world’s strongest economy”.
Perched in their ivory towers, and totally insulated from the needs/desires of their constituents thanks to decades of relentless gerrymandering; the U.S. government has become a collection of 500+ “Marie Antoinettes”. Only the media-censored Ron Paul continues to live in the real world, but the Wall Street Oligarchs and media oligopolies continue to collude in ensuring that this compulsive truth-teller has only minimal access to the media. Even then, most of his “coverage” is nothing but derisive ridicule from these talking-heads.
With liars exalted in the U.S. while truth is as relentlessly suppressed as the gold and silver markets



NTS Notes:  Of course the real "800lb Gorilla" that is not mentioned in this report is the 1.4 QUADRILLION dollar Derivative bomb that could blow up at any time and totally destroy the entire world economies overnight!


It is truly startling to see this mess unfold before our very eyes.  But the only real solution left is to let the entire system fail, and to create a new system without the horrible fallacies of the old.   Any new system would have to incorporate the simple idea of having all currencies printed absolutely interest and debt free by the governments themselves, and to ensure that they will never be placed into private criminal banking hands.   The criminal bankers through their evil system of Usury must be taken completely out of the financial picture and never be allowed to again enslave the world through their debt based monetary policies....


Hard times are indeed coming, and there is absolutely no way that these criminals can save a collapse from happening.   Therefore the only real solution again is to let their corrupt system fail and to make sure that their corruption ends at the same time.


More to come


NTS

2 comments:

mary sullivan said...

fyi

the palestinian story
the people that newt gingrich says "never existed"

http://www.youtube.com/watch?v=wE1A3WrMHdI&feature=player_embedded

Jon Ryan said...

There's been countless times in US history when the country was supposed to collapse, whether it be due to one problem or another, economic or social. Yet we're still here, and we're going to be around for a lot longer.

Countries still loan the US money for one reason, they know they're going to get paid back. No matter how much debt the US accrues, we will always make our payments when it's time for it.

Remember that big situation about raising the debt ceiling? Everyone said it wasn't going to get done and the US would default. But that didn't happen. No matter how bad we may procrastinate or bicker on the issues, the job always gets done.


It all comes down to people loving to hate America. They doubt us in any situation possible and we still come out on top. We bounce back from depressions, recessions, and anything else that might get thrown at us. This situation is no different.

America will continue to be the country that shows the world how to deal with bad situations and in the end prospering.