Now with the Fed interest rate at 0.25%, I once again ask is the U.S. of A insolvent ?
My answer ......You damn it is !
My answer ......You damn it is !
Is the U.S. Insolvent
- Thread starter Albertabound
- Start date
Yes ... the U.S. is insolvent
Now that the entire world knows that the Federal Reserve Note (the dollar bill) is toilet paper and even though in law is “legal tender” (i.e. by law the toilet paper must be accepted as full payment of any debt, failing which the debt is deemed paid), the Shadow Money-Lenders cannot afford the risk of an armed open rebellion and the fiat money system to be overthrown. It is therefore necessary in these circumstances to enforce the use of the US dollar toilet paper by military rule and brutality.
Now that the entire world knows that the Federal Reserve Note (the dollar bill) is toilet paper and even though in law is “legal tender” (i.e. by law the toilet paper must be accepted as full payment of any debt, failing which the debt is deemed paid), the Shadow Money-Lenders cannot afford the risk of an armed open rebellion and the fiat money system to be overthrown. It is therefore necessary in these circumstances to enforce the use of the US dollar toilet paper by military rule and brutality.
Another reason why U.S. of A is insolvent....
In an article titled “A Monetary System for the New Millennium,” Canadian money reform advocate Roger Langrick explains his concept in contemporary terms. He begins by illustrating the mathematical impossibility inherent in a system of bank-created money lent at interest:
“Instead of taxes, government would be empowered to create money for its own expenses up to the balance of the debt shortfall. Thus, if the banking industry created $100 in a year, the government would create $10 which it would use for its own expenses. Abraham Lincoln used this successfully when he created $500 million of ‘greenbacks’ to fight the Civil War.”
In an article titled “A Monetary System for the New Millennium,” Canadian money reform advocate Roger Langrick explains his concept in contemporary terms. He begins by illustrating the mathematical impossibility inherent in a system of bank-created money lent at interest:
“magine the first bank which prints and lends out $100. For its efforts it asks for the borrower to return $110 in one year; that is it asks for 10% interest. Unwittingly, or maybe wittingly, the bank has created a mathematically impossible situation. The only way in which the borrower can return 110 of the bank’s notes is if the bank prints, and lends, $10 more at 10% interest . . . . The result of creating 100 and demanding 110 in return, is that the collective borrowers of a nation are forever chasing a phantom which can never be caught; the mythical $10 that were never created. The debt in fact is unrepayable. Each time $100 is created for the nation, the nation’s overall indebtedness to the system is increased by $110. The only solution at present is increased borrowing to cover the principal plus the interest of what has been borrowed.”
The better solution, says Langrick, is to allow the government to issue enough new debt-free dollars to cover the interest charges not created by the banks as loans:
“Instead of taxes, government would be empowered to create money for its own expenses up to the balance of the debt shortfall. Thus, if the banking industry created $100 in a year, the government would create $10 which it would use for its own expenses. Abraham Lincoln used this successfully when he created $500 million of ‘greenbacks’ to fight the Civil War.”
Insolvency means being unable to pay your debts.
The US is able to pay their debts.
As of last year, debt to GDP was nowhere near an all-time high, which was just after WWII.
How debt could sink the US economy - MoneyWeek
This is going a lot higher, but it is nowhere near the levels seen in the past.
US debt is also nowhere near the levels of other countries.
Public Sector, Taxation and Market Regulation:Statistics Portal
If the US was truly insolvent, interest rates would be much higher, not lower. 10-year bonds were yielding 2.12% a few days ago. That means that investors are buying US government debt because the lower the yield goes, the higher the price goes. If you knew that someone was going bankrupt, would you buy their debt? Of course not. Or at least not if its paying you a mere 2% over the next decade.
The US is able to pay their debts.
As of last year, debt to GDP was nowhere near an all-time high, which was just after WWII.
How debt could sink the US economy - MoneyWeek
This is going a lot higher, but it is nowhere near the levels seen in the past.
US debt is also nowhere near the levels of other countries.
Public Sector, Taxation and Market Regulation:Statistics Portal
If the US was truly insolvent, interest rates would be much higher, not lower. 10-year bonds were yielding 2.12% a few days ago. That means that investors are buying US government debt because the lower the yield goes, the higher the price goes. If you knew that someone was going bankrupt, would you buy their debt? Of course not. Or at least not if its paying you a mere 2% over the next decade.
I have a few charts of my own.
(1) United Kingdom: August-07— August-08.
Source: OECD Standardised unemployment rates (Main Economic Indicators)
do you see any other country with such a large increase in unemployment.....in just one year....I might add.
Selected Standardised Unemployment Rates
October 2007 – October 2008 (1)
Source: OECD Standardised unemployment rates (Main Economic Indicators)
do you see any other country with such a large increase in unemployment.....in just one year....I might add.
Numbers are a bitch, eh?
I'm thinking about shorting Treasuries. It is a bubble. I just don't know if I should do so at yields of 2.5% or 1.5%.
From your article, of which I agree
I don't expect much of an economic recovery this year but stocks should rebound into the Spring. Then we'll see from there.
I have a few charts of my own.
Selected Standardised Unemployment Rates
October 2007 – October 2008 (1)
(1) United Kingdom: August-07— August-08.
Source: OECD Standardised unemployment rates (Main Economic Indicators)
do you see any other country with such a large increase in unemployment.....in just one year....I might add.
That's because the problem started in America. Those countries will catch up. Its just a matter of time.
Unemployment in the US could go as high as 10%.
In regards to that ...you don't think your GDP will be reduced, along with it ?
Just who do you think will produce the domestic product.
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and just between you and me. I don't see stocks coming anywhere near rebounding in the spring. But that we will leave until spring.
further decline
OECD Quarterly National Accounts - Third Quarter 2008
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Print
OECD area GDP down 0.1% in the third quarter of 2008
Download the entire news release (pdf)
20/11/2008 - Gross domestic product (GDP) in the OECD area declined by 0.1% in the third quarter of 2008, the first fall in seven years, according to preliminary estimates.
In the United States GDP fell by 0.1% in the third quarter of 2008, the first contraction since the third quarter of 2001. Japan's GDP declined by 0.1%, following a 0.9% fall in the previous quarter. GDP in the euro area was down by 0.2%, the same rate of decline as in the previous quarter. etc.
OECD Quarterly National Accounts - Third Quarter 2008
Send
Print
OECD area GDP down 0.1% in the third quarter of 2008
Download the entire news release (pdf)
20/11/2008 - Gross domestic product (GDP) in the OECD area declined by 0.1% in the third quarter of 2008, the first fall in seven years, according to preliminary estimates.
In the United States GDP fell by 0.1% in the third quarter of 2008, the first contraction since the third quarter of 2001. Japan's GDP declined by 0.1%, following a 0.9% fall in the previous quarter. GDP in the euro area was down by 0.2%, the same rate of decline as in the previous quarter. etc.
Remember these are November numbers.....it has got a lot worse in December.
Statement by Chad Stone, Chief Economist, on the November Employment Report
STATEMENT BY CHAD STONE, CHIEF ECONOMIST,
ON THE NOVEMBER EMPLOYMENT REPORT
Today’s devastating jobs report confirms that the economy is in a serious recession. Good policy in the months ahead is vital to limit the damage, but even so this recession is likely to be the longest, and possibly one of the deepest, since World War II.
Today’s report also makes it more likely that unemployment will reach 9 percent by the end of 2009, as Goldman Sachs has predicted. The Center on Budget and Policy Priorities estimates this could swell the number of Americans living in poverty by up to 10 million and the number of Americans in deep poverty, with incomes below half the poverty line, by up to 6 million, as explained below.
This week the National Bureau of Economic Research determined that a recession began in December 2007. In the ensuing 11 months, employers have shed jobs each month and the losses have accelerated sharply in recent months. Overall labor market trends are grim.
- Private and government payrolls combined have shrunk for 11 straight months, and net job losses so far this year total 1.9 million. (Private sector payrolls, which began shrinking in December 2007, have seen a cumulative loss of 2.1 million jobs over the past 12 months.)
- Almost two-thirds of the payroll job losses have occurred in the last three months: 533,000 in November, 320,000 in October, and 403,000 in September.
- The official unemployment rate, which was 5 percent at the start of the recession last December, reached 6.7 percent in November, and other indicators show even greater labor market weakness.
- The percentage of the population with a job (61.4 percent) has fallen to its lowest level since 1993.
- The Labor Department’s most comprehensive alternative unemployment rate measure — which includes people who want to work but are discouraged from looking and people working part time because they can’t find full-time jobs — stood at 12.5 percent in November, up 3.7 percentage points so far this year and the highest level on record in data that go back to 1994.
The current recession is 11 months long and counting. If this were the average post-World War II recession, it would have lasted 10 months and ended in October (see Figure 1). If it were like the most recent two recessions it would have ended in August. Instead recent economic conditions point to a continuing contraction in economic activity, which, if it continues past April 2009 as economic forecasters increasingly think it will, would produce a recession longer than any in the postwar record.
- More than one-fifth (21.4 percent) of the 10.3 million unemployed have not been able to find a job despite looking for 27 weeks or more.
Past recessions have been accompanied by protracted spells of joblessness for unemployed workers and increases in poverty and hardship for low-income Americans. The Center has examined the relationship between rising unemployment and growing poverty in each of the last three recessions. If the same relationship holds in this recession and unemployment reaches 9 percent, the number of people in poverty will rise by 7.5-10.3 million, and the number living below half the poverty line will rise by 4.5-6.3 million. The increase just in the number of children living below half the poverty line will be 1.5-2 million.
As the Congress and President-elect Obama prepare an economic recovery package, it is important to remember that support for unemployed workers and those with limited means not only helps those hit hardest in a recession but is among the most effective and fast-acting ways to help arrest an economic contraction and turn the economy around.
Statement by Chad Stone, Chief Economist, on the November Employment Report
Now go to stockcharts.com $TNX - SharpCharts from StockCharts.com and you will see that the 10year bond has been in steady decline. If you know how a chart reacts you will know that it is making higher lows and lower highs.....now from here we have a 50/50 chance that it will go up or it will go down. Up means inflation and I am pretty sure at this stage of the game inflation is out of the question.....so what's the alternative ?
And if it does go up....we will be looking at hyperinflation...and that.. trust me...no one wants.
Yes, of course. GDP will be down about 5% in the fourth quarter and probably a couple of percent each of the first two quarters of this year. Then we'll see from there.
The inherent problem is that most of golds value is based on its use as a jewel. Its not really money either, its speculatory, and you don't NEED gold.
While it has a tangible scarcity, it still doesn't have an inherint value. In may ways its still Fiat, while you can technically eat gold, its use in food, medicine, industy and electronics does not justify its cost to other materials.
Surely there's enough money somewhere to be able to pay someone to run the mint for another hour or so every day for a year- that would take care of things wouldn't it?
I still do not know where the financial system in the US is heading but there was an announcement on MSNBC today that major retailers like Saks Fifth Avenue, J.C. Penney, Chico's, Williams-Sonoma and others are now indicating they may be in seriously troubled waters. The tightening of the belt may help but only time will tell. The credit issues are still plaguing the auto dealers and also some of the big ticket retail merchandisers.