Zero Hedge- Three Horrifying Facts About the US Debt “Situation”

Some very scary facts about the National Debt from Zero Hedge.

Three Horrifying Facts About the US Debt “Situation”
Submitted by Phoenix Capital Research on 10/07/2010

#1: The US Fed is now the second largest owner of US Treasuries.

That’s right, this week we overtook Japan, leaving China as the only country with greater ownership of US Debt. And we’re printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June… as in four months ago. Want an explanation for why stocks, commodities, and Gold are exploding higher? Here it is.

#2: “There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.”

This horrifying fact comes courtesy of Morgan Stanley analyst David Greenlaw. And it confirms what I’ve been saying since the end of 2009, that the US has entered a debt spiral: a time in which fewer and fewer investors are willing to lend to us for any long period of time… at the exact same time that we must roll over trillions in old debt and issue an additional $100-150 billion in NEW debt per month in order to finance our massive deficit.

And only $550 billion of the debt we’ve got to roll over has a maturity greater than 10 years!?!?

So we’re talking about TRILLIONS of old debt coming due in the next decade. The below chart depicting the debt coming due between 2009 and 2039 comes courtesy of the US Treasury itself. In plain terms, we’ve got some much debt that needs to be rolled over that you can’t even fit it on one page and still read it.

#3: The US will Default on its Debt

… either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years.

Bear in mind, I’m completely ignoring the debt we took on with the nationalization of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every US family making $31,000 in debt payments per year for 75 years to pay off our national debt.

Obviously that ain’t going to happen.

So default is in the cards. Either that or hyperinflation (which occurs when investors flee a currency). Either of these will be massively US Dollar negative and horrible for the quality of life in the US. But they’re our only options, so get ready.

Good Investing!

Graham Summers

UK Telegraph - Gold is the final refuge against universal currency debasement

The value of the dollar is dying but our government is doing nothing productive to prevent this from occuring.

Gold is the final refuge against universal currency debasement

States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.

“We live in an amazing world. Everybody has big budget deficits and big easy money but somehow the world as a whole cannot fully employ itself,” said former Fed chair Paul Volcker in Chris Whalen’s new book Inflated: How Money and Debt Built the American Dream.

“It is a serious question. We are no longer talking about a single country having a big depression but the entire world.”

The US and Britain are debasing coinage to alleviate the pain of debt-busts, and to revive their export industries: China is debasing to off-load its manufacturing overcapacity on to the rest of the world, though it has a trade surplus with the US of $20bn (£12.6bn) a month.

Premier Wen Jiabao confesses that China’s ability to maintain social order depends on a suppressed currency. A 20pc revaluation would be unbearable. “I can’t imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs,” he said.

Plead he might, but tempers in Washington are rising. Congress will vote next week on the Currency Reform for Fair Trade Act, intended to make it much harder for the Commerce Department to avoid imposing “remedial tariffs” on Chinese goods deemed to be receiving “benefit” from an unduly weak currency.

Japan has intervened to stop the strong yen tipping the country into a deflation death spiral, though it too has a trade surplus. There is suspicion in Tokyo that Beijing’s record purchase of Japanese debt in June, July, and August was not entirely friendly, intended to secure yuan-yen advantage and perhaps to damage Japan’s industry at a time of escalating strategic tensions in the Pacific region.

Brazil dived into the markets on Friday to weaken the real. The Swiss have been doing it for months, accumulating reserves equal to 40pc of GDP in a forlorn attempt to stem capital flight from Euroland. Like the Chinese and Japanese, they too are battling to stop the rest of the world taking away their structural surplus.

Released to Near Silence, the U.S. Treasury 2009 Financial Report Shows Dire Course

Released to Near Silence, the U.S. Treasury 2009 Financial Report Shows Dire Course

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The Largest Fraud in History That No One Is Talking About

Here is the interview
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/30_Andrew_Maguire_%26_Adrian_Douglass.html

NY Post Story
http://www.nypost.com/p/news/business/jpmorgan_chase_story_in_uk_DsMN4PnXFoQG5KdevIsQ7N

Mootley Fool
http://www.fool.com/investing/general/2010/04/05/is-your-safe-haven-a-house-of-cards.aspx

Experts doubt White House budget forecast

More good news we will never hear about beacuse the MSM loves our President more than it loves our country. The rocky times are still ahead folks better get your house in order because our government is living in a fairy land.

Experts doubt White House budget forecast

The Pelosi-Obama Deficits-Even $9 trillion might be too optimistic on current spending trends

Yes, its true that the President speaks very well but was that a good reason to elect him President. Now don’t get me wrong the same disaster would have occurred if McCain was elected because neither party has a candidate that actually is willing to do the tough things:

1) we need to close our overseas bases (if Japan, S. Korea and Germany can’t protect themselves so be it),

2) reduce our government payrolls (17% of the nation is employed by as a government employee so in reality we pay taxes to employ these people),

3) reduce taxes (the only way to increase revenues is to create an environment where companies want to invest, Texas has no corporate or individual income taxes but has a $8B surplus, California has the some of the highest rates and has to write IOUs to pay its bills, you figure out what works best),

4) pay off any obligations we have made to our elderly but not allow the same broken systems to continue (Social Security and Medicare are both broke and broken but we can’t allow our elderly to end up in a gutter so lets institute a cutoff, anyone under 45 gets nothing but in exchange they pay no capital gains or death taxes in the future, those who are older have to pay both taxes but in exchange they keep their benefits)

If we don’t do the above or something similar our only alternatives is to let the system just implode because that’s path laid out in front of us now. Pretty soon, three or four years from now when the Government' checks for welfare, social security, the armed forces and federal employees start to bounce then and only then will people realize what a mess we have gotten ourselves into.

Americans are too stupid to realize that since the 1970’s we have become a nation of slaves. Everyday we go to work to pay our debts whether they be called taxes or consumer debt. We no longer believe that you have to earn what you have but rather we believe that we are entitled to things like free healthcare.

If you think I am over reacting check out today’s WSJ editorial and you’ll soon realize that I’m being rather rational.

“Earlier this year when President Obama was selling his first budget blueprint, he promised to end years of "borrow and spend" budgeting. Yesterday, reality struck.

Mr. Obama's White House and the Congressional Budget Office told us that current U.S. fiscal policy is "borrow and spend" on a hyperlink. The good news is the deficit for 2009 will be "only" $1.58 trillion, about $250 billion lower than expected thanks to less need for TARP funds. But the Obama fiscal plan envisions $9 trillion in new borrowing over the next decade, which is $2 trillion more debt than the White House predicted earlier this year. The 2010 deficit also rises by about as much as the 2009 deficit falls from January, so even the TARP windfall gets spent.”

http://online.wsj.com/article/SB10001424052970203946904574301043095303118.html?mod=googlenews_wsj