The bankruptcy of the United States is now certain

2010 is going to be grim.

Sooner or later, our creditors are going to want to be paid back.

The money to pay the debt will come in the form of blood, sweat and tears of our children and descendants in the form of servitude and strife to the money masters because "money" will no longer (does not) have any value.

Thomas Jerfferson warned.....

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

The fundamental problem is that our present system is founded on unsound fractional reserve banking practices that allows banks to lend more money than that is actually deposited or on hand in the bank. The banks then charge interest on this virtual money that never existed to begin with.  As more and more loans are created over time on money that does not exist and virtual interest added with nothing but a simple bookkeeping entry, this means more money must be circulated into the economy which eventually causes inflation.

Another fundamental problem is while the principal is circulated into the economy, the interest expected to be paid in addition to the principal is not. Therefore the debt will continue to accumulate and cannot be paid so therefore will NEVER be repaid.

The solution is to End the FED and its unfair and corrupt banking practices that charge illegal interest on money that rightfully belongs to the people.

snuffy, I want you to consider something.

First of all all money is just a symbol. representing a unit of trust. Do you think this kind of story builds up trust or destroys it?

Second of all, it is not the USA that is going bankrupt, but the private entity known as the Federal Reserve.

If the USA decides to forego interest on anything to the Federal Reserve, what do you think will happen to that entity, the Federal Reserve, that is?

Rene

I must respectfully disagree. The United States Treasury is going broke by definition. The Federal Reserve is printing money to devalue the dollar and less en the impact of the deficit.

Howard Davidowitz: "We Are On A Death March!" "We Are Japan!"

Many economists draw comparisons between the United States now and Japan in 1990.

For those who aren't familiar with Japan's recent economic history, this is not a good thing. 

Japan's stock market peaked in 1989 at about 40,000.  It now trades around a quarter of that level, or 10,000.  GDP, meanwhile, has barely grown at all.

Economists used to refer to Japan's malaise as "a lost decade."  Now they're saying "lost decades."

Our guest Howard Davidowitz sees a similarly horrific future in store for the U.S. He calls America's current path, rich in deficit spending and weak in currency a "road to nowhere."

He also doesn't buy the arguments of those who reassure us that Japan's problems are "cultural" and "demographic"--and, therefore, that it's different here.  Japan's problems are the same as our problems (artificially low interest rates and a bailout culture), Davidowitz says.  The only difference is that we're about 20 years earlier into the collapse.

If we are Japan, what is the outlook for the stock market (and your retirement savings)?  Not good.

If the DOW behaves the way Japan's NIKKEI has, the DOW will trade at about 4,000 in 2025.

Edward Harrison: The recession is over but the depression has just begun

This is a depression, not a recession

"When debt is the real issue underlying an economic downturn, the result is a period of stagnation and short business cycles as we have seen in Japan over the last two decades.  This is what a modern-day depression looks like - a series of W's where uneven economic growth is punctuated by fits of recession. A recession is merely a period of recalibration after businesses get ahead of themselves by overestimating consumption demand and are then forced to cut back by making staff redundant, paring back inventories and cutting capacity. Recessions can be overcome with the help of automatic stabilzers like unemployment insurance to cushion the blow. Depression is another event entirely."

U.S. Debt Won't Be a Big Deal? If Only That Were TrueComplete Story

Will The Economy Sink The American Empire?

Niall Ferguson thinks its possible

As interest payments eat into the budget, something has to give—and that something is nearly always defense expenditure. According to the CBO, a significant decline in the relative share of national security in the federal budget is already baked into the cake. On the Pentagon's present plan, defense spending is set to fall from above 4 percent now to 3.2 percent of GDP in 2015 and to 2.6 percent of GDP by 2028.

Read more ....

I have been saying the same thing for the past year. Kudos to the Compass for writing a better post that explains why.

It is a big deal. but......

still think this is not helpful.

right, we're going down, are you pulling the plug along with the evil bankers?

sounds like you're cheerleading for the bankers.

Here we go 'MONEY':

fiat money from Columbia Encyclopedia.

FYI, as long as the Fed and Treasury keep churning out money and passing it out, we are in an INFLAT-IONARY period.

RECESSION happens when money is withdrawn from the economy, not added.

Inflate.

Recede.

It's like the tide. or a hot air balloon.

BTW, how many wheelbarrows of money do you need to buy a loaf of bread?

Remember what happened to the Continental? We haven't got that far yet.

We don't disagree. Do I smell the Austrian school of economics here?

PLEASE NOTE: This is just a quick update on the outlook for the November employment and unemployment report and a note on U.S. government financial statement. A full Commentary is planned for Friday (December 4th), following release of employment data, including an update on the economic outlook and reporting of the last week.

The Hyperinflation Special Report (Update 2010) is in production and will be posted later today.

 – Best wishes to all, John Williams

http://www.shadowstats.com/article/no-262-us-gaap-accounting-delayed-employment-report-outlook?

Release of GAAP-Based 2009 Financial Statements of the United States Government Delayed. With no related formal announcement that I can find, the U.S. Treasury has posted on its Web site, http://www.fms.treas.gov/fr/index.html, that the 2009 GAAP-based U.S. Government financial statements — mandated by Congress — will not be published until February 2010. They had been scheduled initially for release in mid-December 2009.

My estimate remains that full GAAP-based accounting will show the actual 2009 annual deficit to be about $8.8 trillion, up from $5.1 trillion in 2008. Those details will be found in the updated hyperinflation report. While there certainly have been a number of complicating events for the government’s accountants to assess in the last year, having accurate and timely information this month would be useful to those debating current conditions and issues. Delayed until February, any unhappy accounting results may not surface now until after the health care package and related fiscal concerns have been put to bed by Congress and the Administration.  

 The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.

John Williams writes:

Crises Brewed by Federal Government and Federal Reserve Malfeasance. The crises have been generated out of and are centered on the United States financial system, triggered by the collapse of debt excesses actively encouraged by the Greenspan Federal Reserve. Recognizing that the U.S. economy was sagging under the weight of structural changes created by government trade, regulatory and social policies — policies that limited real consumer income growth — Mr. Greenspan played along with the political and banking systems. He made policy decisions to steal economic activity from the future, fueling economic growth of the last decade largely through debt expansion. 

The Greenspan Fed pushed for ever-greater systemic leverage, including the happy acceptance of new financial products, which included instruments of mis-packaged lending risks, designed for consumption by global entities that openly did not understand the nature of the risks being taken. Complicit in this broad malfeasance was the U.S. government, including both major political parties in successive Administrations and Congresses.

As with consumers, the federal government could not make ends meet while appeasing that portion of the electorate that could be kept docile by ever-expanding government programs and increasing government spending. The solution was ever-expanding federal debt and deficits. 

Purportedly, it was Arthur Burns, Fed Chairman under Richard Nixon, who first offered the advice that helped to guide Alan Greenspan and a number of Administrations. The gist of the wisdom imparted was that if you ran into problems, you could ignore the budget deficit and the dollar. Ignoring them did not matter, because doing so would not cost you any votes. 

Back in 2005, I raised the issue of a then-inevitable U.S. hyperinflation with an advisor to both the Bush Administration and Fed Chairman Greenspan. I was told simply that "It’s too far into the future to worry about." 

Indeed, pushing the big problems into the future appears to have been the working strategy for both the Fed and recent Administrations. Yet, the U.S. dollar and the budget deficit do matter, and the future is at hand. The day of ultimate financial reckoning has arrived, and it is playing out.

Hyperinflation Nears. Before the systemic solvency crisis began to unfold in 2007, the U.S. government already had condemned the U.S. dollar to a hyperinflationary grave by taking on debt and obligations that never could be covered through raising taxes and/or by severely slashing government spending that had become politically untouchable. The U.S. economy also already had entered a severe structural downturn, which helped to trigger the systemic solvency crisis. 

The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government’s solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year.  

Numerous foreign governments have offered unusually blunt criticism of U.S. fiscal and Federal Reserve policies in the last year. Both private and official demand for U.S. Treasuries increasingly is unenthusiastic. Looming with uncertain timing is a panicked dollar dumping and dumping of dollar-denominated paper assets. Such is the most likely event to trigger the onset of hyperinflation in the year ahead. 

The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat dollars (not backed by gold or silver) will come the eventual destruction of the value of the U.S. dollar and related dollar-denominated paper assets.

What lies ahead will be extremely difficult, painful and unhappy times for many in the United States. The functioning and adaptation of the U.S. economy and financial markets to a hyperinflation likely would be particularly disruptive. Trouble could range from turmoil in the food distribution chain to electronic cash and credit systems unable to handle rapidly changing circumstances. The situation quickly would devolve from a deepening depression, to an intensifying hyperinflationary great depression.

While the economic difficulties would have global impact, the initial hyperinflation should be largely a U.S. problem, albeit with major implications for the global currency system. For those living in the United States, long-range strategies should look to assure safety and survival, which from a financial standpoint means preserving wealth and assets. Also directly impacted, of course, are those holding or dependent upon U.S. dollars or dollar-denominated assets, and those living in "dollarized" countries.

http://www.shadowstats.com/article/hyperinflation-2010

I have been digging the site www.opencurrency.com. They have started doing community currencies that are all made from pure silver, gold and copper and DO have a value outside of the various communities so they could be used theoretically anywhere. There are other groups doing alternative silver currencies, but obviously not as well or as widespread as these guys.