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The Mother of All Bankruptcies
Townhall.com ^ | April 7, 2011 | John Ransom

Posted on 04/07/2011 5:17:38 AM PDT by Kaslin

The budget problem that the country faces isn’t merely big.

It isn’t even really, really big.

It’s much bigger, and more dangerous, in actual fact, than politicians are willing to acknowledge.

Think of the biggest number you can.

Yeah. It’s bigger than that.

The Congressional Budget Office says that if we continue at our current rate spending, we’ll  “chalk up nearly $7 trillion in red ink over the next 10 years,” according to Reuters.

Yawn. Think bigger than that.

Because that number’s not even close to the size of the real problem we have. $7 trillion is just a fraction of the liabilities of the government as it doesn’t take into account all the “off-the-book” items.

You might remember “off-the-book” accounting. It made a stunning debut in the Enron scandal.

Oh.

You thought politicians fixed that problem?  They did. The “fix” doesn’t apply to government accounting; it just applies to the rest of us.    

While experts usually peg the unfunded portion of pension liabilities at around $1 trillion, that number is based on reports from public pension managers who are anxious to downplay the size of the gap in pension liabilities.

If real-world accounting methods are used to gauge the pension gap- you know, the methods that private pension managers have to use to stay out of prison- the states owe about $3 trillion to pension funds that they don’t have.

But, hey, what $2 trillion more or less. 

Because, still, our problem is much bigger than that.

The IMF yesterday called upon the U.S. government to “make explicit its guarantees of the housing-finance market and bring them fully onto the government balance sheet.”

The IMF has this silly notion that the government should stand by loans it’s guaranteed and add the bill to the balance sheet.  

Forbes’ Bill Bonner reckons  the “total bailout bill…may exceed $20 trillion.”

The IMF stated the obvious by saying that government-guaranteed, easy credit helped drive prices up and create a real estate bubble in the first place.

So far that’s $7, plus $3, plus $20 trillion.

But wait. It gets worse.

Bill Gross, the manager of the world’s largest mutual fund, did calculations that includes all the liabilities of the government he could think of- Social Security, Medicaid, Medicare- and figured a deficit of around $75 trillion more or less.     

Gross “has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden,” he said, as reported in Bloomberg.

“This country appears to have an off- balance-sheet, unrecorded debt burden of close to 500 percent of GDP. We are out-Greeking the Greeks,” Gross concluded, referring to the debt crisis which has Greece teetering on bankruptcy.   

Fellow investor Warren Buffet agrees with Gross. He’s told investors to stay away from U.S. government securities.

"If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not," Buffet said to overseas investors in March.

It’s not clear if we’re supposed to add the $20 trillion in mortgage obligations that the IMF is counting on to Gross’ estimate of $75 trillion.

$75 trillion is a number that would stagger even the late Carl Sagan.  

Written out it's $75,000,000,000,000.00 if you are keeping box-score at home.

So, what’s a measly $2 or $3 trillion more or less, in a figure like that?

Just the pension problem, that’s what.

Our real problem, unfortunately, is much bigger than that.  


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: deatrhofthewest
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1 posted on 04/07/2011 5:17:40 AM PDT by Kaslin
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To: Kaslin

AAAAAAAAAGGGGGGGHHHHHHHHH!!!!!!!!!!!!


2 posted on 04/07/2011 5:20:50 AM PDT by LiveFreeOrDie2001 (Best Cook on Free Republic! ;-))
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To: Kaslin

Its because the rich aren’t paying their fair share.


3 posted on 04/07/2011 5:22:35 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Kaslin

The Congressional Budget Office says that if we continue at our current rate spending, we’ll “chalk up nearly $7 trillion in red ink over the next 10 years,” according to Reuters.

Yesterday, I saw some democrat saying the CBO said Ryans’ new budget would add to the deficit. At this point, is there ANYTHING that won’t add to the deficit?


4 posted on 04/07/2011 5:23:02 AM PDT by marstegreg
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To: Kaslin

Now’s the time to make those big purchases you’ve been waiting on. You won’t be able to afford it later.


5 posted on 04/07/2011 5:26:16 AM PDT by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: Kaslin

Our politicians think a $25 billion cut will solve the problem and they can go home for spring recess.


6 posted on 04/07/2011 5:27:15 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: goldstategop

Bump.


7 posted on 04/07/2011 5:29:30 AM PDT by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: Kaslin
It’s much bigger, and more dangerous, in actual fact, than politicians are willing to acknowledge.

Some are.

As in those days, the American project is menaced by a survival-level threat. We face an enemy, lethal to liberty, and even more implacable than those America has defeated before. We cannot deter it; there is no countervailing danger we can pose. We cannot negotiate with it, any more than with an iceberg or a Great White. I refer, of course, to the debts our nation has amassed for itself over decades of indulgence. It is the new Red Menace, this time consisting of ink. We can debate its origins endlessly and search for villains on ideological grounds, but the reality is pure arithmetic. No enterprise, small or large, public or private, can remain self-governing, let alone successful, so deeply in hock to others as we are about to be.

Gov. Mitch Daniels, CPAC speech


8 posted on 04/07/2011 5:29:30 AM PDT by Huck (Mitch Daniels is my choice among the potentials, which of course means he has no chance.)
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To: marstegreg

It will add to the deficit, we just go broke slower, thank goodness.


9 posted on 04/07/2011 5:30:49 AM PDT by org.whodat
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To: goldstategop

$25B????? Are you crazy?? That’s draconian!! Old people will have to eat dog food! Are you heartless?? [/s]


10 posted on 04/07/2011 5:31:22 AM PDT by ClearCase_guy
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To: Kaslin
"The Congressional Budget Office says that if we continue at our current rate spending, we’ll “chalk up nearly $7 trillion in red ink over the next 10 years"

No wonder they are always so far off on their numbers. If we are running $1.6T deficits, we will run up $7T debt in less than 5 years. Do the math, CBO!

11 posted on 04/07/2011 5:31:52 AM PDT by liberateUS
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To: driftdiver

The country isn’t broke. We have plenty of money. Michael Moore said so, and I always believe him.


12 posted on 04/07/2011 5:33:36 AM PDT by Cymbaline ("Allahu Akbar": Arabic for "Nothing To See Here" - Mark Steyn)
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To: driftdiver
Bill Whittle has an answer to that:

Bill Whittle on "Eat the Rich"

13 posted on 04/07/2011 5:35:07 AM PDT by randita
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To: Kaslin

politician’s should be horse whipped, debt created in numbers only few can understand, what they have done to the citizens of this country just to get re elected. Our currency all but destroyed and they still cannot stop themselves.


14 posted on 04/07/2011 5:36:03 AM PDT by reefdiver ("Let His day's be few And another takes His office")
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To: Cymbaline

We still have ink and paper don’t we? Well then he must be correct.


15 posted on 04/07/2011 5:39:40 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Cymbaline

I found a govt website a short while back that listed the unfunded liabilities. I’ll see if I can find it but the number they had was around $100 Trillion.


16 posted on 04/07/2011 5:40:55 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: org.whodat

It will add to the deficit, we just go broke slower, thank goodness.

I think it is time to pull the government back from the brink. They are fiscally suicidal right now (some say intentionally) but I do not want to go down with that ship.


17 posted on 04/07/2011 5:42:36 AM PDT by marstegreg
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To: Kaslin

At some point, the gravy train has to end. All kinds of shenanigans have and will be tried to keep it going, but even if they take every cent of every Fortune 500 company and every cent of anyone who makes over $250K a year and every last dime in our 401K’s, it would only buy us a year or two. And at that point, they will have killed the goose that lays the golden egg.

When the austerity comes and sheeple start to realize that politicians have known for decades that we were on an unsustainable path yet did nothing but demagogue, there will be anger like we haven’t seen in this country in a long time. And it will be fully justified.

Localities and states will be first because they can’t print money, but it will slowly trickle up to the federal level.


18 posted on 04/07/2011 5:42:59 AM PDT by randita
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To: randita

Thats an interesting video, thanks.


19 posted on 04/07/2011 5:53:12 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: All
Forbes reckons the total bailout bill may exceed $20 trillion. ............. He got that right.

POINTS TO PONDER---POINT ONE Obama announced, "Several financial institutions are set to pay back $68B to taxpayers." While Obama's announcement was welcome news, it was assumed that any money or profit would be returned to the general funds from whence it had come in order to pay down the debt. The truth, however, is that the money returned by the banks is finding new life as part of what amounts to a Treasury Department-controlled slush fund.

POINT TWO We kept reading and hearing Congress rushed to approve the "$787 billion stimulus package" but very little of it was actually used. Supposedly $17B was sent to NJ when the incumbent Dem Gov was up for reelection----but it disappeared without a trace. The Dem lost, anywat, In a segment on nightly news, uber-Lobbyist Thomas Hale Boggs, Esq (Patton Boggs) said there was $2 TRILLION federal stimulus "waiting" to be distributed and clients from all over the US wanted a piece of it. Boggs is the son of former Cong Hale Boggs and sister of ABC-TV commentator Cokie Roberts.

POINT THREE Obama tapped VP Joe Biden to "allocate" the stimulus $$trillions. Biden's family was involved with Texas financier H. Allen Stanford, now charged with an $8 billion offshore fraud. The Bidens $50 million fund was jointly branded between the Bidens' Paradigm Global Advisors LLC and a Stanford Financial Group entity, and was known as the Paradigm Stanford Capital Management Core Alternative Fund, the WSJ said. Stanford-related companies marketed the fund to global investors....... Paradigm Global Advisors is owned through a holding company by the VP's son, Hunter, and Joe Biden's brother, James, according to the WSJ.

POINT FOUR How can this be legal? A jaw-dropping policy the White House released late on a Saturday afternoon 2009, hoping we would not notice. "Following OMB’s review, the Obama Administration has decided to make a number of changes to the rules that we think make them even tougher on special interests and more focused on merits-based decision making. First, we will expand the restriction on oral communications to cover all persons, not just federally registered lobbyists. For the first time, we will reach contacts not only by registered lobbyists but also by unregistered ones, as well as anyone else exerting influence on the process. We concluded this was necessary under the unique circumstances of the stimulus program."

POINT FIVE Obama, Soros and FDIC's Sheila Bair, among others, are engaged in a "War on Wall Street" to get complete control of our financial system.

ANALYSIS "Government bankers want to control the debt, And whoever controls the debt, controls everything. This is the essence of the banking industry, to make us all slaves to debt." (Umberto Calvi)

===========================================

REFERENCE Behind The Real Size of Obama's Wall Street Bailout (more like $14 trillion)
Mother Jones | Dec. 21, 2009 / FR Posted January 04, 2010 by E. Pluribus Unum

A guide to the abbreviations, acronyms, and obscure programs that make up the $14 trillion federal bailout of Wall Street.

The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see our chart here. Below, a guide to the pieces of the puzzle:

Treasury Department bailout programs (controlled by Rahm Emanuel)

Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].

Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].

TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid. Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets." GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion [PDF].

--SNIP--- long read

Federal Reserve bailout programs

Commercial Paper Funding Facility: With the support from the Treasury, the Fed established the CPFF in October 2008 to increase the availability of short-term debt (commercial paper) funding. Up to $1.8 trillion [PDF] was earmarked for the program.

Mortgage-backed securities purchase: In 2009, the Fed earmarked up to $1.25 trillion to buy investments based on home loans.

Term Asset-Backed Securities Loan Facility: TALF provides financing to investors who are buying asset-backed securities. In February 2009, the Fed and Treasury announced an expansion of the program to generate up to $1 trillion in new lending.

Foreign Central Bank Currency Liquidity Swaps: The Fed has provided $755 billion [PDF] for currency liquidity swaps with foreign central banks.

--SNIP--- long read


20 posted on 04/07/2011 5:53:35 AM PDT by Liz (A taxpayer voting for Obama is like a chicken voting for Col Sanders.)
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To: All
The Federal Reserve Bank of New York AND the United States Treasury rescued global insurer AIG with a taxpayer backstop totaling $180 billion. The US Treasury's $180 billion rescue is "interesting" b/c then-COS Rahm Emanuel took over Treasury when Obama got in.

So where did that $180 billion go? "Professor" Ohaha knows nothing about high finance----but Rahm toiled on Wall Street before becoming a (gag) 4 term Congressman, and a Goldman Sachs flack while employed by Clinton.

====================================

Novelist Dean Koontz estimates about $70 Billion has been looted from US govt assets.

At least half a dozen people in the Ohaha admin are going to walk away from “Public Service“ living like the Sultan of Brunei......and we can name them all without even breaking a sweat.

HOW GANGSTER GOVERNMENT SCAMMED BILLIONS USING THE MADOFF MO The trustee ID'ing Madoff's assets, found Madoff created a labyrinth of interrelated international funds, institutions and financial entities of unparalleled complexity and breadth......with assets and businesses in multiple places offshore that hid government fraud, thievery, money launderering, tax evasion........ all out of sight of taxpayers, the IRS, SEC, FEC and US banking laws.

BTW, stolen money is taxable.

21 posted on 04/07/2011 5:59:11 AM PDT by Liz (A taxpayer voting for Obama is like a chicken voting for Col Sanders.)
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To: Kaslin
$14 TRILLION isn't even an honest look at our debt.

Thats just looking at our debt as to our BUDGETed allounces, and us going over our budget. That is what we commonly refer to as our national debt.

The REAL DEBT is MUCH,MUCH worse.

There are many things that are paid for that are never put into the budget. These unfunded items are whats CLEARLY killing us.

Simpleton liberals refuse to understand that just at common held $14 TRILLION debt, that would mean that every man, woman and child in this country owes $45,000. Add up the Forbes top 400 richest Americans estimated wealth, (people with an estimated worth of $1 billion or more) and that comes to $1.6 TRILLION. Barely enough to match "this years" BUDGET deficit.

BUT...when we look at our UNFUNDED DEBT, we see that $14 TRILLION in our budget debt is peanuts. I've seen or heard estimates that put our UNFUNDED DEBT at $100-$120 TRILLION.

That means about $390,000 for every man, woman or child. A typical family of 4 would owe over $1.5 million.

This country is bankrupt.

We just haven't been foreclosed on.

We have a population of approximately 310 million people. If we had just 10 million families with 2 parents and 2 kids, owing over $1.5 million each, that would be $15 TRILLION. The entire wealth of all the country's Billionaires would only pay for 1/10th of that. The average family has the majority of its wealth tied up in their homes. The average home is worth about $200,000.

Only about enough to pay HALF THE DEBT obligation for one person, let alone any other family members.

Not to mention, most people owe a mortgage on their homes, so they don't even own that free and clear.

22 posted on 04/07/2011 6:08:54 AM PDT by mountn man (The pleasure you get from life, is equal to the attitude you put into it.)
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To: Kaslin

23 posted on 04/07/2011 6:09:52 AM PDT by Bean Counter (Stout Hearts!!)
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To: marstegreg
The CBO is lying.

They have come out numerous times in the last 2 years and reappraised their numbers to what "naysayers" have said all along.

Last year we had a deficit of over $1.3 TRILLION. This years projected deficit is $1.6 TRILLION.

Thats almost $3 TRILLION in just 2 YEARS, and they want us to believe we will just have an extra $7 TRILLION in debt in 10 years.

And we haven't even talked about the extra costs Obamacare is going to add to the debt.

If we extrapolate this year and last years deficits out $10 years, that would mean $15 TRILLION not $7 TRILLION. And just like this years $.3 TRILLION jump, we can expect the same over each consecutive year.

And our "leaders" are haggling over a few 10's of billions.

IDIOTS!!!!

24 posted on 04/07/2011 6:20:09 AM PDT by mountn man (The pleasure you get from life, is equal to the attitude you put into it.)
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To: Bean Counter
Though I find your picture funny, the reality is, the rest of the world is part of the same house of cards we are.

There isn't enough wealth worldwide to cover our debt.

If the US defaulted on its debt, the banks in Saudi Arabia and China would be holding worthless IOU's and just as worthless US money.

The ENTIRE WORLDS monetary system will come crashing down.

25 posted on 04/07/2011 6:27:17 AM PDT by mountn man (The pleasure you get from life, is equal to the attitude you put into it.)
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To: goldstategop
Our politicians think a $25 billion cut will solve the problem and they can go home for spring recess.

Every time I think about that I wonder if the Congresscritters really are that stupid? I think not. I think this running up of massive debt is intentional and serves a much larger goal.

26 posted on 04/07/2011 6:36:42 AM PDT by Thermalseeker (The theft being perpetrated by Congress and the Fed makes Bernie Maddoff look like a pickpocket.)
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To: mountn man
The ENTIRE WORLDS monetary system will come crashing down.

Which is why people are buying up gold and silver, and maybe copper.

27 posted on 04/07/2011 6:38:24 AM PDT by NeoCaveman (Hu's your daddy)
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To: mountn man
The ENTIRE WORLDS monetary system will come crashing down.

I think that's the plan.....

28 posted on 04/07/2011 6:38:32 AM PDT by Thermalseeker (The theft being perpetrated by Congress and the Fed makes Bernie Maddoff look like a pickpocket.)
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To: Kaslin

29 posted on 04/07/2011 7:26:34 AM PDT by GailA (2012 rally cry DEMOCRATS and RINOS are BAD for the USA!)
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To: GailA

Typical


30 posted on 04/07/2011 7:38:05 AM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: marstegreg
Take a look at this and decide if Paul Ryan's budget will add to the deficit


31 posted on 04/07/2011 7:44:09 AM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: Kaslin

I believe Paul Ryan on this. I know that any Dem budget is just smoke and mirrors. Their only interest is to transform this country. I just thought it was amusing that they were saying the Ryan budget would raise the deficit. If that were actually the case they would have LOVED his budget. The fact that they didn’t leads me to believe it is good.


32 posted on 04/07/2011 7:50:58 AM PDT by marstegreg
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To: Kaslin
What we are experiencing here is a transfer in the *VALUE* of money. People (and China) will still be sitting on the same number of dollars, it's just that those dollars won't buy NEARLY as much as they had expected.

The panhandler on the street corner may end up being about as "wealthy" as Bill Gates.

But, we'll probably have started WWIII before then, and to the victors will go the spoils.

33 posted on 04/07/2011 7:52:28 AM PDT by The Duke
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To: NeoCaveman
The ENTIRE WORLDS monetary system will come crashing down.

Which is why people are buying up gold and silver, and maybe copper.

I realize buying metals is a wise hedge against inflation of fiat money. But whats stopping the powers that be from pulling an FDR, confiscating Gold (and silver, platinum and maybe copper) ?

34 posted on 04/07/2011 7:52:34 AM PDT by mountn man (The pleasure you get from life, is equal to the attitude you put into it.)
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To: marstegreg

They are not even serious on balancing the budget


35 posted on 04/07/2011 8:03:41 AM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: mountn man
I suppose they could do a confiscation or raise the taxes to the point of being a de factor confiscation. It could still happen but I think it won't for several reasons:

1. It's not 1933 anymore. When FDR confiscated the gold it was part of his plan to devalue the dollar (from $20 for an ounce to 35 an ounce) with fiat money, there is no need to confiscate to devalue.
2. The other metals have never been confiscated before, so they have that going for them.
3. Only about 1 to 2% of Americans are into hard assets so they might not be "in the sights" of the government this time.
4. If the monetary system collapses, how are they going to pay the thugs to do the confiscating.
5. Massive noncomplainace and a highly developed black market would likely emerge.

36 posted on 04/07/2011 8:07:41 AM PDT by NeoCaveman (Hu's your daddy)
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To: Kaslin

We bought some silver eagles last month. I held out as long as I could. I am also very worried....and Angry!


37 posted on 04/07/2011 8:08:39 AM PDT by marstegreg
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To: marstegreg

I’m trying to decide if I should cash out all my investments in the stock market. What do I do if I do that?

There’s just waaaaaaaaaaay too much uncertainty. Except for the tsunami of debt - that’s very certain.


38 posted on 04/07/2011 10:16:52 AM PDT by iceskater (11/2/10 - the beginning of the beginning of restoration.)
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To: The Duke

“But, we’ll probably have started WWIII before then, and to the victors will go the spoils. “

Unless we win, then we will start rebuilding the world and do some more nation building.


39 posted on 04/07/2011 10:26:11 AM PDT by CJ Wolf (I like it that FR still spell checks "obama")
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To: mountn man
"But whats stopping the powers that be from pulling an FDR, confiscating Gold (and silver, platinum and maybe copper)?"

(Ahem) Nickels are legal currency.

Why You Need to Own Nickels, Right Now

Also, (gold) Krugerrands are also the legal currency of South Africa.

40 posted on 04/07/2011 10:47:25 AM PDT by blam
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To: iceskater

I am not a financial guru(I mean that in every possible way) but common sense tells me that even if stocks drop like they did before, they will bounce back quicker than the dollar. I have been reading some dire forcasts for May ( not sure exactly why) but if you are worried, cash out high (like now) and if the market takes a hit you can re-buy low. That is what I am doing. I am also buying some silver (just in case). If there are any financial gurus with better advice or just want to tell me why I am off base please let me know. I would much appreciate it!


41 posted on 04/07/2011 11:27:09 AM PDT by marstegreg
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To: Kaslin

Welcome to the Dark Ages.


42 posted on 04/07/2011 11:40:26 AM PDT by Republic of Texas (Socialism Always Fails)
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To: mountn man

“But whats stopping the powers that be from pulling an FDR, confiscating Gold (and silver, platinum and maybe copper) ?”

They can only steal that which they know about.


43 posted on 04/07/2011 12:00:43 PM PDT by TexasRepublic (Socialism is the gospel of envy and the religion of thieves)
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To: TexasRepublic
OK, forget "confiscation". Just like FDR, make gold ownership illegal. The gov buys all gold and silver back at set prices, after that date private ownership is outlawed and illegal for trade.

Maybe on the black market items are able to be traded or sold, but gold as a currency we be virtually useless. There would be no more (legal) gold traders, to sell gold bullion for cash to buy items.

Gold is valuable today, outside of jewelry, as a commodity that can openly be traded. People are hedging gold against greenbacks, because they can, and thats whats driving the price of gold and silver up. Take away the ability to use it as a hedge and its value drops.

44 posted on 04/07/2011 1:20:57 PM PDT by mountn man (The pleasure you get from life, is equal to the attitude you put into it.)
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To: mountn man

If gold ownership(and possibly other forms of tangible wealth) is outlawed, then I predict a huge black market. While I can’t predict the relative value of gold in such a world, I’m sure it will still be more coveted than worthless bundles of hyperinflated funny money. Just don’t leave your wheelbarrow unattended outside the state-run store while you buy that rancid loaf of bread with your pile of paper money.


45 posted on 04/07/2011 1:53:25 PM PDT by TexasRepublic (Socialism is the gospel of envy and the religion of thieves)
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To: driftdiver
Its because the rich aren’t paying their fair share.

I know, right.


Built with SUSE Studio

If you can't appreciate the pure beauty of the violin after hearing this, something's wrong with your ears.

46 posted on 04/07/2011 4:27:58 PM PDT by rdb3 (The mouth is the exhaust pipe of the heart.)
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To: TexasRepublic
Just don’t leave your wheelbarrow unattended outside the state-run store while you buy that rancid loaf of bread with your pile of paper money.

Someone will take the wheelbarrow and leave all the money.

(Actually happened in Weimar Germany)
(actually, it was a basket taken)

47 posted on 04/07/2011 5:37:27 PM PDT by mountn man (The pleasure you get from life, is equal to the attitude you put into it.)
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To: TexasRepublic

I’d be careful about over-romanticizing Gold. In many ways it’s actually the ultimate so-called “fiat” currency. It has no intrinsic value. You can’t eat it or even really make anything useful out of it. It’s only value is that it’s a pretty metal that is easy to shape and it doesn’t rust... so it’s great to make coins out of. Beyond jewelry and some industrial applications it isn’t really very useful for anything else.

But beyond that its only worth what somebody is willing to give you for it... because they ~believe~ that somebody else down the road will also trade something for it. That, in a nutshell, is what “fiat” currency means. It’s a medium of exchange based on belief that its value is transferable to someone else.

Now, don’t get me wrong... it works really ~well~ as a currency. But it doesn’t survive a “total” collapse any more than paper money or a box full of quarters. In a total collapse, trade tends to revert to barter. Something useful, traded for something useful. A side of beef for a crate of ammunition. A bottle of whiskey for some hours labor... whatever.


48 posted on 04/07/2011 6:05:45 PM PDT by Ramius (Personally, I give us... one chance in three. More tea?)
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To: driftdiver

I can’t be overdrawn! I still have checks!


49 posted on 04/07/2011 9:16:23 PM PDT by Cymbaline ("Allahu Akbar": Arabic for "Nothing To See Here" - Mark Steyn)
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To: Ramius

Gold has had value since the earliest recorded histories. But you’re right, you cannot eat gold.


50 posted on 04/08/2011 4:09:18 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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