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Is the US Government Bankrupt? When No One Pays Taxes...Not EvenThen . It Would Resort To Violence.

Increasingly the US Government is Showing Signs that it May Indeed Already Be Bankrupt Lex Loeb Contributor Network . Something wacky is happening in world financial markets. The United States Treasury is being flooded by international money for safe keeping in US dollar denominations for some of the lowest interest rates on record. Certainly these rates of return that are promised by the treasury and determined by the market are low but they are also higher than other yields worldwide that are much closer to zero. The return on holding gold is zero. The big foreign sovereign wealth funds are between a third and quarter of the USA total net annual income which make the amounts rather insignificant as a significant claim on the US treasury potential borrowing. What is strange is how the foreigners would rather risk holding US dollars as "safe " holdings rather than shopping for bargains either in trade goods or American home base investments. The first thing it tells us is that the US economy is not in as bad shape as others even some with higher growth rates that this money has come home to roost in the US treasury chicken coup. Yes it is chicken money because it is scared and looking for safety. At the same time the US government is not acting right. It has absolutely no regard for the value of the longer term value of the US dollar in terms of instantly promising trillions of dollars that don't yet exist. A trillion dollars is just one third of the total budget of the US congress in the middle of the last term of President Bush in office. It is still a lot of money and considering that it is non existent money that means it is a proposed form of future slavery of the American tax payers. Forget the nonsense that this is our children's debt to repay. That is not how this mass printing of non existent dollars is intended. The intention is that government will float away its debt in future years by manufacturing so much cash that the old Milton Friedman charts showing a correlation of money supply and a asymptotic explosive crescendo of compounding inflation in Brazil and Argentina some 20 years ago. We might be talking not of just double digit rates of inflation but inflation rates per annum of over 40-50 percent. The problem with this sort of expectation and yes it is the government's expectation to inflate because of fear of deflation, is that all those people saving are doomed. All the scared people with their safe money and all those big sovereign wealth funds are doomed by what appears to be at least a small burst of hyper inflation. It could be a long terrible hyper inflation. The question is then why are debtors suddenly becoming savers and why does the mass media applaud that sort of stupid reaction when they are dooming the future of their finances worse than taking risks in the markets for higher yields? The reason why it seems like the US Government signals that it is bankrupt is by the shear numbers of their trillions in new proposed spending over the existing budgets at the same time they are saying they want to raise taxes in what is now a major recession. The Bush administration refused to given pension owners relief in 2008 from having to take minimum distributions and this really helped debase the stock market more than necessary in the Obama transition. First thing Geithner does in office is tries to cow the Chinese into raising the value of their currency against the US dollar which also is the exact opposite of what should be done to keep world trade moving. If the Chinese want to discount their labor as slaves to the world why would our government want to do that to our own workers and not just let the Chinese give away what ever they will? The Obama administration then goes on a spending spree making highway improvement a corner stone of spending and yet the same administration wants to cap and trade hydrocarbon use, is against the automobile, is against the suburbs and is against gasoline production from oil drilling. It makes absolutely no sense to spend billions on high way improvements and not just make due if this administration wants to force the country to use public transit. This government is acting more and more like a desperate irresponsible debtor . It shows. It is not very pleasant. The new administration is talking down the stock markets and grabbing ever larger shares of big national banks and insurance companies. That is a classic national bankruptcy signal! Every time a Latin American country went bankrupt in the last 100 years banks were sure to be nationalized and the currency would be debased. Next there were currency controls and always higher taxes. This is now the exact signal the Obama administration is sending. They even floated a total bank nationalization proposal just to see if American would consider it . They were forced to back down just as quickly. The fact of the mater is most of American banks are still healthy. No one in the administration is working to erase the stupid mark to market law that makes banks look worse than they are in many cases. If underlying assets have no market temporarily they should not be listed on the books as terminal when the borrowers are still paying off the loans on schedule. Everyone has paid for a car that model for a given year that came down in price at the end of the year to make way for new models. So bank capital should not necessarily reflect this but this administration and congress seem to want to put more and more banks in their vice and squeeze them. Could it be that they know that the US Government is bankrupt? California is bankrupt so there is no reason the federal government cannot be so as well. As the government works to intentionally squeeze the banks because of their neo-Marxist ideology it is not a very good sign. It is rather remarkable where how a federal reserve chairman who supposedly is a great financial expert on the great depression seems to want to duplicate those conditions by doing precisely what seems to have caused the problem before. When they let Lehman brothers fail they sent a message that the financial world immediately interpreted as cause to panic. The federal reserve chief had to know this would happen. Why? Because banks and financial houses restructured after the last major recession we had so that they would not end up being destroyed by double digit inflation . The government was doing nothing but creating inflation for years and years so they prepared with alternatives such as using real estate home sales for derivative means of avoiding the perils of inflation . Counter acting inflation by the banks in spite of government best attempt at managing the economy with inflation seemed to back fire and that is mainly because of the amazing growth of international trade in the same period. The US had not exactly expected the US dollar to become the world currency as it had and really seemed to lack the knowledge or feeling of being responsible for maintaining a world currency. The banks were left to do that. The explosive growth in commodity values including oil and real estate were inflationary but completely over shot the level of actual inflation because the numbers did not take into consideration the sponge over seas, like eastern Europe, that just absorbed US dollars as the actual currency. The other currencies were on the rise against the dollar. Even Mexico's peso was doing better which was quite astonishing and some of that had to do with the securitization of oil as a world currency with Mexico having some large productive reserves. The problem now is that the US government is acting as if it is bankrupt with the policy directions it wants to lead the country in and it may not go right. It just seems like desperation that the government would even consider talking about bank nationalization , raising taxes in a severe recession, spending money on obsolete and silly programs, spending mind boggling trillions in proposed budgets and destroying the US hydrocarbon based economy for an un proven not necessarily economically feasible pipe dream alternative reality. At the same time are nationalizing some banks effectively including citigroup and AIG while talking down the markets and blaming greed which is the same thing as incentive based opportunity for all the problems. This is a dangerous moment in US history. Few Americans who fell for the election rhetoric of change really wanted to be changed this much. President Obama and his secretary of the treasury do not seem to know that the big unions including their beloved public employee unions all have their pensions vested in the US stock market including with the hedge funds they despise. They also seem to be enjoying the stock market asset crash as if such things come to those who were not good as they are the new Marxist Santa Claus. The government has been panicking worse than the public since the financial crash began. That is a huge signal that the government is bankrupt. The question is what happens the day we all wake and we all realize that uncle sam has nothing? It can't happen. We just loose our freedom including freedom of choice to make our own financial decisions and the government seizes what ever they want. Property rights will be dead as we know it. We could see government sending troops to seize Walmart stores even thought it is solvent. The thing is that government assets are off the table like publicly owned lands so that makes it necessary for the bankrupt government to go out and seize as much private property as they can. That is what the aftermath of the realization of a federal bankrupt government will be like the morning after. The question should be why if the government can compete with citigroup and bank America making loans to Americans directly based on future tax liabilities do they want to keep the failed banks intact and not just open an online federal reserve window with the US treasury to the general public with emergency funding? We keep hearing about toxic assets on bank balance sheets. and that makes no sense either. If there are derivatives and assets that match it should be possible to pool all of the existing matches and then decide what to do. There is good reason to suspect that a lot of the paper is un hypoliticated fraud where there are no underlying assets and never were any. But then bankers would be going to jail instead of relieved of management duties. We will know for sure the US government is bankrupt when the banks , no mater how solvent are all nationalized, when the government gives us multi digit inflation, raises taxes excessively , wants to make sure the maximum number of people are working, starts cutting entitlement benefits, creates some new debased currency like a 100 dollar coin the size of a dime , puts in place foreign currency controls or tries to confiscated gold and private property and makes it harder to get a passport for foreign travel of any sort. What it means ? Well it means that federal employees will not find the retirement dollars they were promised. It will mean more expensive medical care than ever because government wants a bigger cut not cheaper prices. Rationing and lines for medical care never seen before and doctors being given a strict allowance of what they can earn after taxes means the government intends to use unavoidable health care requirement necessities for most Americans as a means of collecting more in taxes. If you live in Portland Oregon you pay 100 times the cost of piping water to your home to the Portland water bureau and the same people want to take over your gas and electric service, The water belongs to the public and has for over 100 years but the government has come to find they are now in business to sell to the public what it already owns at a profit that boggles the mind. The public is supposed to be pleased they are being overcharged because of a propaganda campaign to tell the public that spending too much is helping to limit use and thus somehow saving the environment. Somehow. Water is really unlimited in Portland and can be pumped out below major rivers to supply a city ten times as large. The water bills have added expenses to pay for sewer nonsense that has nothing at all to do with the public ownership of the utility. That is the direction in which the whole country is going . It seems they want the country to be as bankrupt as possible to mask their own bankruptcy and to take power to resell everything that already belongs to the public back to the public once again. They will call this the new deal and the new mixed economy with public private partnership nonsense sprinkled on top. Right now the news media seems to think it is the public that has gone wrong with speculation and is bankrupt but there is a fair amount of evidence that suggests that it may really be government speculation that is bankrupt and the public is just trying to cope. It is the same sort of frame of reference problem in physics where on a ship a ball falling from the mast seems to come down and on the shore it seems as if the ball comes down at a bent spherical angle trajectory taking into consideration the motion of the ship foreword. Citigroup going bankrupt and taken into government ownership may really be an underlying problem of a massive federal government deterioration in finances when we see it from a distance? That is a theory. .


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