APOCALYPSE NOW? No... but Soon Enough

Reaganite Republican ^ | December 15, 2010 | Reaganite Republican

[Reaganite Republican]

Fiscal train-wreck racing round the bend...

Congressional Republicans gain the most seats in 40 years, and what we get is a trillion-dollar Porkulus II -The Sequel? At a total cost that again exceeds the entire cost of the Iraq war?

Discouragingly, Curt at Flopping Aces sees the package already a done-deal... with a weaker-than-circus-lemonade GOP throwing away recently hard-won political capital to bring us more spending, pork, and class warfare. You're excused if you naively thought all this is precisely what America just massively rejected... so did I.

As the GOP inexplicably caves to a weakened Obama/Reid, congressional Republicans are quick to stress that this sort of deal with the White House -which again exposes all previous pay-as-you-go platitudes from the President as flat-out lies- would never see the light of day after the first of the year.

And all parties are understandably keen to avert an immediate economic disaster by allowing the Bush tax cuts to expire- which Art Laffer predicted would put us right-over the cliff somethime in 2011... but both tax cuts and a trainload of pork with zero offsets...? 

Tellingly, the bond market is appalled- T-bills tanked hard yesterday, with the biggest sell-off in two years... worst since the Lehman Bros collapse. This horrendous month has seen borrowing costs soar for America, Europe, and Japan by more than 25%... you do the math on times-a-few-trillion to see just what that means- bond investors seem to have it sussed.

Small wonder then a growing number of serious people now speak of the previously-unthinkable: a comprehensive economic collapse in the United States of America.

Nouriel Roubini -who foresaw the 1990s emerging-economies debt crisis and earned much credibility by accurately predicting the occurrence and scale of the subprime debacle- sees weak US growth and NO will to tackle the deficit crisis until "the next administration". He also expects unemployment stuck at 9.5% for the foreseeable future.

But that's in the short-mid term... the spendthrift fiends running the US today are doing all they can to bring far-darker long-term predictions of a financial apocalypse to reality... via unrestrained hyperinflation leading to a dollar collapse.

Dr. Roubini himself warns of a "US fiscal train-wreck waiting to happen"- and he's not the only one:

Economists peddling dire warnings that the world's number one economy is on the brink of collapse, amid high rates of unemployment and a spiraling public deficit, are flourishing...

"The US has run out of bullets," Roubini told an economic forum in Italy earlier this month. "Any shock at this point can tip you back into recession." 

But other economists, who have so far stayed out of the media limelight, are also proselytizing nightmarish visions of the future. Boston University professor Laurence Kotlikoff ... unveiled a doomsday scenario -- which many dismiss as pure fantasy -- of an economic clash between superpowers the United States and China, which holds more than 843 billion dollars of US Treasury bonds. 

"A minor trade dispute between the United States and China could make some people think that other people are going to sell US treasury bonds," he wrote in the IMF's Finance and Development review. "That belief, coupled with major concern about inflation, could lead to a sell-off of government bonds that causes the public to withdraw their bank deposits and buy durable goods." 

Kotlikoff warned such a move would spark a run on banks and money market funds as well as insurance companies as policy holders cash in their surrender values. "In a short period of time, the Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees. All that new money could produce strong inflation, perhaps hyperinflation," he said. 

"There are other less apocalyptic, perhaps more plausible, but still quite unpleasant, scenarios that could result from multiple equilibria."

Deranged Obama Administration fiscal policy also has PIMCO founder Bill Gross scratching his head:

Check writing in the trillions is not a bondholder’s friend; it is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme. Public debt, actually, has always had a Ponzi-like characteristic. 

Granted, the U.S. has, at times, paid down its national debt, but there was always the assumption that as long as creditors could be found to roll over existing loans – and buy new ones – the game could keep going forever. 

Sovereign countries have always implicitly acknowledged that the existing debt would never be paid off because they would “grow” their way out of the apparent predicament, allowing future’s prosperity to continually pay for today’s finance. 

Now, however, with growth in doubt, it seems that the Fed has taken Charles Ponzi one step further. Instead of simply paying for maturing debt with receipts from financial sector creditors – banks, insurance companies, surplus reserve nations and investment managers, to name the most significant – the Fed has joined the party itself. 

Rather than orchestrating the game from on high, it has jumped into the pond with the other swimmers. One and one-half trillion in checks were written in 2009, and trillions more lie ahead. The Fed, in effect, is telling the markets not to worry about our fiscal deficits, it will be the buyer of first and perhaps last resort. There is no need – as with Charles Ponzi – to find an increasing amount of future gullibles, they will just write the check themselves. 

I ask you: Has there ever been a Ponzi scheme so brazen? There has not.

What to expect subsequent to a US economic implosion/hyperinflation crisis? The Department of Defense has been preparing for civil unrest in the wake of a crisis for two years now...

"Widespread civil violence inside the United States would force the defense establishment to reorient priorities ... to defend basic domestic order and human security," the report said, in case of "unforeseen economic collapse," "pervasive public health emergencies," and "catastrophic natural and human disasters," among other possible crises.

No paucity of frightening implications in that... but others are being far more specific:

As you are now well aware Fannie and Freddie are going to punish people who have stopped paying their mortgages, who can pay them, and who are paying other bills instead. This leaves lenders with foreclosures and much more inventory than they ever imagined. This additional problem will bring on the double dip that Wall Street and Washington so fear. As a result of this and other failures we are about to experience the worst economic collapse since 1348. 

The stock market is topping out readying itself for its most disastrous fall in history. The fall will be followed by years of depression, all of which has been deliberately created to bring the world economically and financially to its knees in an attempt to bring about world government by Illuminists. 

...

There are always these lone voices in the wilderness, which at best – some 15% of the populace – listens too. You had better listen this time because it could well cost you not only your assets, but your life, especially when another war is being prepared for you to engage in. 

Nothing is really as it seems to be and there are no coincidences. You are about to enter a world of chaos from which few will survive unscathed. A world of no banks, no public facilities, no food and rampaging gangs of desperate people. Unemployment of 50% and little law and order. Violence will be rife. 

…

We are now entering the next to last phase of our journey. The wanton creation of wealth, inflation and perhaps hyperinflation, which will rob you of your assets. A stealth attack on what you have left by the people who control your government. Such monetary creation is the only way these people can keep the game going. They know it won’t last, but they proceed anyway. 

For awhile they’ll keep the multitudes at bay with extended unemployment and food stamps, but that will fade in time for lack of financial control, as the system begins to break down. You already see all fiat currencies under fire, as is sovereign debt. 

Can it get any worse? Of course it can, and it will. Implosion is the word everyone is going to discover and understand...

When it's all said and done -and we're trying to come up with new, creative recipes for K-rations in our bunkers- at least the TEA Party patriots will be able to look their children in the eye and say they tried to derail this country's wholly-unnecessary self-destruction.

What a crying shame... let's hope and pray we can find a way to avoid it:

The Financial Times   The International Forecaster   SHTFplan   

The Daily Telegraph (UK)   Military.com   Wikipedia

More/Video at Reaganite Republican

[devere]

If the dollar is headed into hyperinflation how can the stock market go down in dollar terms? Could you explain this prediction to me?

[MsLady]

I can’t believe our government is doing this to us. What a bunch of evil, stupid, arrogant people. harry reid is a complete fool and so are the nevada people who re-elected him. Same for pelosi and the rest of the extreme left. I hope they are happy.

[Peter from Rutland]

LSD?

Stuff like this makes me laugh. Seriously. And the beginning of the post ignores the fact that the congresscritters we elected haven’t been sworn in yet.

HELLO?!

[ClearCase_guy]

I still see divided opinion -- we are headed for deflation/we are headed for hyper inflation.

I have tended to think that hyperinflation was most likely, but today I heard that US businesses are sitting on $2T in cash (highest ever), afraid to spend it because of the uncertain business climate. I say these people are not fools, and I say that you don't sit on cash when you think it will lose money (inflation). The time to sit on your cash is when you think it will worth more tomorrow than it is today.

I see deflation ahead.

[Renegade]

“Nothing is really as it seems to be and there are no coincidences. You are about to enter a world of chaos from which few will survive unscathed. A world of no banks, no public facilities, no food and rampaging gangs of desperate people. Unemployment of 50% and little law and order. Violence will be rife.”

If its gonna happen ,let it be sooner than later, while I am still physically able to take out some of the Rat bastards that are responsible for this mess.

[Reaganite Republican]

If you can swallow ONE TRILLION in new spending to get Obama just to retain the tax status quo without being appalled, you’re no conservative

GOP RINOs thew ALL their leverage away and caved... no need, it’s a shame- Obama and Reid are politically very, very weak

Paul Ryan a BIG dissapointment to me

[Reaganite Republican]

Right on, Renegade

[vanilla swirl]

teotwawki

[The Comedian]

Makes-me-sound-like-an-optimist ping.

"Economic Holocaust" ping.

Increasing volume ping list watching the slow motion Economic Holocaust.

FReepmail me if you want on or off
The Comedian's "Economic Holocaust" ping list...

Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

[OB1kNOb]

No doubt we are in the early stages of the fourth turning (ala Strauss and Howe). Whether we come out the other side of it for the better or for the worse still remains to be seen.

[Georgia Girl 2]

I’m fast coming to the conclusion that the GOP is just compulsive in their desire to compromise with the Democrats. Orrin Hatch was on Hannity’s radio show yesterday afternoon and he almost sold me on this. He is so adamant that this is the best deal we are going to get out of the Dems. Blah blah blah. Maybe we should just let them wreck the train and then let them own it for the next 2 years.

[blam]

The Only Thing That Will Save Us Now Is Fear Itself

[Huebolt]

I ALWAYS said "Would you rather have an economic/trade war or a REAL WAR?"

War has always been the last wild card in the deck these moronic "leaders" and "bankers" play...

[Scythian]

You know what? Someday this economy is going to end ...

[FromLori]

The end of the world as we know it is right around the corner according to Porter Stansberry

http://www.stansberryresearch.com/pro/1011PSIENDVD/PPSILC38/PR

He has a way of breaking it down that will give you the chills. He warns that other countries are getting together to end the status of the dollar as the reserve currency. Having that status was the only reason we have not yet collapsed.

He talks about the meeting to which we were not invited where countries have begun working together to start a new currency. Coincidentally...

Sidestepping the U.S. Dollar, a Russian Exchange Will Swap Rubles and Renminbi

http://www.nytimes.com/2010/12/15/business/global/15iht-ruble15.html?_r=2

The Elites continue to plan our demise. This spending along with losing the dollar’s reserve status could be the end.

They could be doing so to offer up a NEW solution (an internationalist leader promoting a new world order)

[OB1kNOb]

War has always been the last wild card in the deck these moronic "leaders" and "bankers" play...

Yep. To take the heat and focus off of them as the reason for a nation's problems.

[ConservativeMan55]

bttt

[B4Ranch]

As the clock ticks .....

[April Lexington]

Small wonder then a growing number of serious people now speak of the previously-unthinkable: a comprehensive economic collapse in the United States of America.

Well... I'm pretty serious and I've been kvetching about this for 2 years now... I just need my own TV show!