Skip to comments.Schiff: America is Already Bankrupt
Posted on 05/30/2012 9:54:39 AM PDT by Hojczyk
The man who forecast the end of the housing bubble in his book Crash Proof says the housing implosion wasn't his primary concern. "I was worried about what was going to happen when the government tried to reflate the bubble." The ensuing meltdown is going to result from the cure, not the original disease.
Schiff says the Congressional Budget Office (CBO) got it exactly backwards when they issued warnings that the U.S. would slip into recession if we reached the debt ceiling early in 2013. America literally can't cut spending fast enough; a recession now beats a depression later.
"Right now the government can spend as much as it wants because it can borrow." But there's a limit. Once U.S. interest rates are forced higher by concerned lenders, the party is going to be over for the U.S. Of course, there's no actual deadline for when those rate spikes happen. Currency and debt are relative, and the U.S. remains a relatively safe bet.
"The worst that can probably happen in the short run, if you're trying to keep the bubble going, would be some kind of resolution in Europe. If Europe actually gets its house in order, then we're really in trouble."
As Schiff views it, America's in much worse shape than Europe. What's saving us is that the problems over there are providing enough of a distractionor are at least making the U.S. look good enough by comparisonthat the Fed can keep rates near nil.
According to Schiff, the hangover from our money party will be hellish.
(Excerpt) Read more at finance.yahoo.com ...
Mob rule is now the law of the land.
Is there some sort of MSM rule where first names cannot be used? If they are trying to reveal the “who” of the story they have failed right out of the box. Should have been in the first line.
...as if we didn’t already KNOW we were on the downward path to bankruptcy.
Not true. The deficit for FY 2013 will be $901 Billion and $668 Billion for FY 2014. This is a significant improvement over the $1,327 Billion for FY 2012. The next important step is to grow the economy and get the unemployment rate to around 5% or 6%.
” The next important step is to grow the economy and get the unemployment rate to around 5% or 6%.”
Are you insane? Obama has regulated us into hell!
How would YOU grow the economy?
LOL. That’s the projected deficit. It could be higher. And is it based on the Bush tax cuts being extended or cut? On the enactment of Obamacare? On payroll tax holiday being lifted? There are lots of assumptions to reach those figures.
First off, with US debt-to-GDP above 100%, a $668 billion deficit is unstustainable. The chart has it finally leveling off at $500 billion. Still unsustainable. When debt is greater than GDP, you have to drastically cut spending or you enter a downward spiral. No one is proposing true spending cuts.
Second, you say "the deficit for FY 2013 will be." Will it? I don't have a crystal ball myself, but based on Boehner's actions so far, my guess is he folds like a cheap suit. Romney, if he wins, displaned no tendency in Massachusetts to govern any differently than Obama has so far.
The USA is like that family in 2008 riding a wave of fake prosperity based on credit cards and helocs.
“This is a significant improvement over the $1,327 Billion for FY 2012. The next important step is to grow the economy and get the unemployment rate to around 5% or 6%.”
LOL!!!!what turnip truck did you just fall off of?!!Or are you posting from Obama’s press office this afternoon newbie?!!!
“First off, with US debt-to-GDP above 100%”
67% of the national debt is held by Americans. The national debt (gross federal debt) is $15.8 Trillion. $11 Trillion is public debt and $4.8 Trillion is intragovernmental (money the government owes to itself). $5.9 Trillion of the public debt is held by Americans and $5.1 Trillion is held by foreign countries. The dollar is the reserve currency of the world. We have the ability to print as many dollars as we want.
If the Saudis and the ChiComs cannot continue to sell to the US and Europe, their own people will rise up and start beheading the leadership within weeks.
They have every incentive to continue shipping to us and to keep taking our money and pretending that its worth something.
That has all been a head game since we went off the gold standard anyhow. It’s like the old Peanuts strip. “Why are the mountain climbers all tied together? So that when one falls, they ALL fall”.
I've heard that the word "recession" is merely a euphemism for "depression". If that is the case then the validity of this entire article is suspect.
Why does that remind me of "famous last words"?
“The dollar is the reserve currency of the world. We have the ability to print as many dollars as we want.”
You’ve put your finger on one of the reasons having the reserve currency is important. At the same time, you’ve hinted at why that status might not last.
I see we’re on the same wave length.
I’ve got this bridge for sale. Cash up front and I’ll give you 20% off asking price.
“We have the ability to print as many dollars as we want.”
You posit that “ability” as it it is a good thing.
Wanton disregard for that capability, along with truly lunatic levels of spending, are the principal mechanisms for the historically unprecedented fiscal hole in which we find ourselves.
It’s more of a language change over time. In the early part of the 1900s they used the word “depression” for a downturn. At some point, they changed to “recession” and at that time, yes, it was just a euphemism.
These days, recession is more or less defined, and depression is not so much, but generally used to refer to a really substantial, prolonged downturn (such as the one, IMO, history will show we are in right now).
It is in the first line, the poster just didn’t excerpt it.
Of course you know that the Fed and treasury are right now plaing ponzi scheme printing games with our currency to the tune of about 60-70% of our new debt.
Of course you know that the govt gave the chicoms direct access to our treasury sales instead of going thru the regular channels, not to mention the go ahead to buy US banks. I"m not 100% sure of the ramifications of the former, but I'm sure it has Ponzi written all over it.
Of course you know that the numbers you posted are all a gross fiction and largely irrelevant (in terms of who holds the debt) in the first place. If we default, whether we are the reserve currency or Americans hold 100% of the stated debt, there will be adverse effects for us.
Of course you know our debt to GDP is well above euro failure PIIGS socialist nations. You know, the ones that are failing miserably right now
Of course you know we aren't going to be having any magical recoveries with Obama and Cass Sunstein regulating us into super business friendly Kaulifornia.
Of course you know that rejecting pipelines, making your energy bills "necessarily skyrocket", regulating the white collar jobs into outsourcing heaven, denying the existence of a border so that blue collar jobs become an insourcing heaven for illegals (not to mention the sabateurs and agents provocateur coming over) makes those projected deficits fiction as well.
So naturally, *pfffffft* of course we can just print money. And of course you're either grossly uninformed or a dirty damn stinking troll.
There is the old joke "It's a recession when you're neighbor loses his job, it's a depression when you lose yours," but that is just a joke.
Real unemployment numbers (not fake ones from the BLS) are probably a good indication of economic conditions.
I'd say 5% unemployment is a booming economy, between 5% and 10% is a recession, and anything over 10% is a depression.
It's going to be arbitrary, but I believe it is useful to distinguish between a recession and a depression.
“How would YOU grow the economy?”
Simple... WWIII.. it’s what they’ve been planning for the last 20 years.
“How would YOU grow the economy?”
I would do it sort of like Germany did right before and during WWII. Invade lands for their natural resources and labor force.
Top of my list would be ANWR, the coal fields Clinton put off limits, protected forest lands, the EPA building and any other Federal department limiting development (like whoever is stopping Tombstone, AZ from using mechanical devices in the forest to fix their water pipes).
I would drop all of the environmental rules back to some previous levels for, say 10 years. (Benzene limit from 1 part/billion to 5 parts/billion or whatever, coal emissions, get rid of all the crap created for global warming, etc.)
On the labor side, reduce the welfare doles to give some of the folks a kick in the butt. But I imagine most of the labor would come on their own once business started growing again. There are LOTS of unemployed that would like to be working right now.
“Of course you know that the Fed and treasury are right now plaing ponzi scheme printing games with our currency to the tune of about 60-70% of our new debt.”
Inflation is at a 40 year low
Average annual inflation rate by decade:
1970-1979 = 7.06%
1980-1989 = 5.51%
1990-1999 = 3.00%
2000-2009 = 2.56%
2010-2019 = 1.70% (projected)
Facts are stubborn things
“Of course you know our debt to GDP is well above euro failure PIIGS socialist nations. You know, the ones that are failing miserably right now”
Our public debt is 71% of GDP. France is 85%. The UK is 87%. Germany is 94%. Portugal is 103%. Italy is 118%. Ireland is 157%. Greece is 178%.
Weimar Germany had the ability to print as much money as they wanted too. How many countries will accept a hyperinflated dollar as the world reserve currency?
“Inflation is at a 40 year low.”
It depends on what you purchase. Food and energy have been take out of the CPI. Personally I’m not buying consumer electronics or housing every week, things that are declining in price. My house is paid for so my disposable income goes primarily to food, energy, services (health care, haircuts, plumbers), and taxes all of which are increasing in cost much faster than the CPI. I find it hard to believe I can look forward to 1.7% increases in food, energy, property taxes, income taxes, and health care costs for the next decade.
” It depends on what you purchase. Food and energy have been take out of the CPI”
Yeah....that is like removing the heart from the patient : )
Well golly gee beav, lets be intellectually curious.
If we dont have to put treasuries on the open market and we print money (ala chinese direct access, fed ponzi buying, QE I and II and endless other manipulations) then there wouldn't really be any upward pressures on the rates and no screaming eagle sh!z, inflation looks like 1.7%. Obamanomics are a magical wonderland. Not that 1.7% is anything like an ACTUAL inflation rate huh slick. Dont look now, them looks like they above Jimmah Carter's famed rates.
Do you really wanna point me to usadebtclock after citing 15 Trillion in debt?
You're disingenuous at best, a leftist liar at worst and you're making the same stupid arguments made by an idiot leftist in my office. The same one that tried telling me Canadian health care has less wait times than the American one. Yep, yer a troll.
I am slighty offended that you would call me a leftist. My grandfather, his sister and 2 of my great uncles were deported to forced labor camps in Siberia by Stalin. I know the crimes of leftism/socialism/marxism. I never said anything about Canadain heathcare. I just posted some statistics on the inflation rate with a source that is http://inflationdata.com/inflation/inflation_rate/currentinflation.asp
What is wrong with the usdebtclock.com?
Nothing it wrong with usdebtclock.org, but it's incredibly disingenuous to cite 15 trillion dollars of US debt when the same site indicates 119 trillion (Not to mention approx 727 TRILLION in derivatives) in unfunded liabilities (liabilities = debt). Debt is debt is debt, whether we're huffing it onto seperate books with hopium or not. Who it's owed to matters naught.
I'm from just down the road from Tombstone in Sorry Vista, Az. Lemme tell you what makes it even more egregious is "forest" is a joke. It's a desert wasteland of rock and scrub.
Oh - I should have thought of that. And perhaps I am wrong - but I thought it was the “Forest” service.
I almost got kicked off a job for pulling my truck off the dirt road in the desert, onto the “regular” dirt with a few sage brush scattered about. Instead they gave us all a half-hour lecture on how the sage brush were in “environmentaly sensitive” zones where we COULD not park, and care was to be taken so as not to disturb the sage brush. I thought they were worried about some rare reptile or something - but it was the sage brush they were worried about! Miles and miles of sage brush!
This was the same place where it took a year and a half to get a permit (after environmental audits, etc.) to be able to bang on the ground with a sledgehammer to do a geology type experiment.
Here’s a pro RAT source , CNBC that says inflation is at 10% or so... Your data is fatally flawed because the methodology has been changed to create the illusion of low inflation.
Thanks for this thread. You will have many more opportunities to post similar threads during this Obama/Obamalite Campaign Season.
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