Author Topic: The bankruptcy of the United States is now certain & imminent. (Read 3296 times)

Soul Crusher · « **on:** November 25, 2009, 10:40:10 AM »

The bankruptcy of the United States is now certain
The Daily Crux ^ | 11/24/09 | Porter Stansberry

Posted on Wednesday, November 25, 2009 1:35:48 PM by FromLori
________________________ ________________________ ________________________

It's one of those numbers that's so unbelievable you have to actually think about it for a while... Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt - whether subprime borrowers, GM, Fannie, or GE - the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss." What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt… at ever shorter durations… at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.
When governments go bankrupt it's called "a default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists - Alan Greenspan and Pablo Guidotti - published the secret formula in a 1999 academic paper. That's why the formula is called the Greenspan-Guidotti rule. The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default. The U.S. holds gold, oil, and foreign currency in reserve. The U.S. has 8,133.5 metric tonnes of gold (it is the world's largest holder). That's 16,267,000 pounds. At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months - an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So… where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP. Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or the Russian central bank, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None own even 1% of their total reserves in gold.

I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory, which we published last Friday. Coincidentally, the New York Times repeated our warnings - nearly word for word - in its paper today. (They didn't mention Greenspan-Guidotti, however... It's a real secret of international speculators.)

________________________ ________________________

Hey - lets bash Palin!

BodyProSite · « **Reply #1 on:** November 25, 2009, 12:05:31 PM »

Yep, if the libs bash Palin then can hurry and change the subject!!

Straw Man · « **Reply #2 on:** November 25, 2009, 12:06:54 PM »

Quote from: BodyProSite on November 25, 2009, 12:05:31 PM

Yep, if the libs bash Palin then can hurry and change the subject!!

why are you bringing up Palin on this thread?

no one else is

BodyProSite · « **Reply #3 on:** November 25, 2009, 12:10:52 PM »

It was brought up in the origional post , maybe you should read it all the way through.

Soul Crusher · « **Reply #4 on:** November 25, 2009, 12:11:55 PM »

This article is really scary IMHO.

Couple this with the NYT article about the debt payments looming and really crazy crap is coming soon.

Straw Man · « **Reply #5 on:** November 25, 2009, 12:20:01 PM »

Quote from: BodyProSite on November 25, 2009, 12:10:52 PM

It was brought up in the origional post , maybe you should read it all the way through.

I've already read all the through one of 333 posts today

how is this one any different than the 1000 other articles he's posted in the last 2 weeks

Soul Crusher · « **Reply #6 on:** November 25, 2009, 12:21:59 PM »

Quote from: Straw Man on November 25, 2009, 12:20:01 PM

I've already read all the through one of 333 posts today

how is this one any different than the 1000 other articles he's posted in the last 2 weeks

This is not an obama attack article straw. I posted the NYT article similar to this from two days ago.

This is serious stuff.

BodyProSite · « **Reply #7 on:** November 25, 2009, 12:22:42 PM »

It is very diff , but the same in one way, It is fact and it represents the royal fucking over of this country that obama is doing just as many of 333 posts do !! Why are libs so afraid of the truth and reality?

Straw Man · « **Reply #8 on:** November 25, 2009, 12:27:32 PM »

Quote from: 333386 on November 25, 2009, 12:21:59 PM

This is not an obama attack article straw. I posted the NYT article similar to this from two days ago.

This is serious stuff.

oh - so this one is serious and not just another one of your usual obama attack articles?

the problem is that you litter this board with so much crap that I never take anything you post seriously

try posting a LOT less and see what happens

BodyProSite · « **Reply #9 on:** November 25, 2009, 12:31:16 PM »

i dont realy give a shit what happens or if you or anyone likes it... lmao i mean seriously its a message board, you guys are the people that get mad , about things, i get on post whats on my mind and get off , actually you and all the other liberal retard commie supporters on here are realy quite amusing, so keep it up !! please

Straw Man · « **Reply #10 on:** November 25, 2009, 12:37:16 PM »

Quote from: BodyProSite on November 25, 2009, 12:31:16 PM

i dont realy give a shit what happens or if you or anyone likes it... lmao i mean seriously its a message board, you guys are the people that get mad , about things, i get on post whats on my mind and get off , actually you and all the other liberal retard commie supporters on here are realy quite amusing, so keep it up !! please

are you 333?

I'm not giving him suggestions to help people like him

I'm giving him suggestions on how to get people to read the stuff he posts.

If he litters the board with crap then we just assume everything he posts is just more crap?

Soul Crusher · « **Reply #11 on:** November 25, 2009, 12:38:29 PM »

Quote from: Straw Man on November 25, 2009, 12:37:16 PM

are you 333?

I'm not giving him suggestions to help people like him

I'm giving him suggestions on how to get people to read the stuff he posts.

If he litters the board with crap then we just assume everything he posts is just more crap?

Straw - opinion pieces are one thing, but this article is posting about factual data with regard to our debt obligations in the immediate future.

Look at the price of gold just in the past month.

BodyProSite · « **Reply #12 on:** November 25, 2009, 12:40:53 PM »

straw doesnt want to look at facts when it proves the liberals wrong and doesnt speak good of the commie pres!!

Straw Man · « **Reply #13 on:** November 25, 2009, 12:53:49 PM »

Quote from: 333386 on November 25, 2009, 12:38:29 PM

Straw - opinion pieces are one thing, but this article is posting about factual data with regard to our debt obligations in the immediate future.

Look at the price of gold just in the past month.

all these posts and I still don't care to read it

already burned out on all the other crap you've posted

that's what you get when you just through up shit left and right

no one takes anything you say seriously anymore

Soul Crusher · « **Reply #14 on:** November 25, 2009, 12:56:37 PM »

Quote from: Straw Man on November 25, 2009, 12:53:49 PM

all these posts and I still don't care to read it

already burned out on all the other crap you've posted

that's what you get when you just through up shit left and right

no one takes anything you say seriously anymore

Like who? I got 5 pm's yesterday telling me they love m,y posts. I got drivel from nicky and mons.

Soul Crusher · « **Reply #15 on:** November 25, 2009, 01:04:11 PM »

RCP is crap? here are the articles for today. Deal with it, Obama is just failing and people are writing about it.
________________________ ________________________ _____

Real Clear Politics Wednesday

Terrorists Don't Deserve Rights of Americans - Peter Regan, New York Post - Neg. Obama

Who is Really on Trial in the KSM Case? - Adam Serwer, American Prospect - Neg Obama

Holder's Decision is Embarrassing & Offensive - Michael Gerson, Wash Post - Neg. Obama

Filibuster Follies - Katrina vanden Heuvel, The Nation - Neutral

Climategate: Alarmism Is Underpinned by Fraud - Ian Plimer, PJM - Anti - Dem

Obama's Unprecedented Regard for His Presidency - Carol Lee, Politico - Anti - Obama

Way Too Early to Judge Obama's 'Mistakes' - Joe Klein, Time - Pro-Obama

Obama Juggernaut Meets Resistance - Andrew Cline, American Spectator - Anti O

Race to the Top in Education - Harold Ford, Louis Gerstner & Eli Broad, WSJ - Did not read it

Huffington Post's Misogyny - Mary Katharine Ham, Weekly Standard - nonsense article

RCP Blog: Obama's Self Inflicted Expectation Gap - Anti O

RCP Morning Edition

Afghan Strategy Will Contain Many Messages - David Sanger, NY Times

Obama Stuck in Muck in Afghanistan - James Meek, New York Daily News

Counting the Blessings of American Medicine - John Olsen, Seattle Times

The Case for Deficit Spending - John Judis, The New Republic

Climate 'Science': Skeptics Are Vindicated - David Warren, Ottawa Citizen

The Gathering Geithner Storm - Thomas Cooley, Forbes

Wall St. Makes Turkeys Out of Taxpayers - Dana Milbank, Washington Post

Obama Faces Challenge with Independents - Jennifer De Pinto, CBS News

Barack & Sarah's Reversal of Fortune - Michael Goodwin, New York Post

How Economy Affects Midterm Elections - Sean Trende, RealClearPolitics

Health Care Mandate is Consitutional - Ruth Marcus, Washington Post

We Pay Them to Lie to Us - John Stossel, RealClearPolitics

Chavez on the Warpath - Luiza Savage, Macleans

Finding the Right Fix for 'Too Big to Fail' - Mortimer Zuckerman, WSJ

How Do You Solve a Problem Like Newsweek? - Noemie Emery, Examiner

Greg Craig: Thanks for the Memories - Maureen Dowd, New York Times

Obama: The First 'Pacific President'? - George Will, Newsweek

PN: The Non-Decider Decides | More on RCP: Twitter | Videos | Polls

RCP Blog: Sestak's Palin Bankshot | USAT/Gallup: Obama at 50

Editorials
Afghanistan Needs Strategy And Will - Investor's Business Daily

Medvedev vs. Putin? Mystery Returns to the Kremlin - CS Monitor

Hugo Chavez Loves Vermin of All Kinds - New York Daily News

Stimulus Snow Job - Chicago Tribune

Global Energy Resource Center

India to Boost Solar Power Funding

Rising Oil Price Risks Derailing Recovery
Cuba Mandates Extreme Energy Cuts

Political News & Analysis
Obama Issues Proclamation of Thanksgiving - Politico
Senate to Take Up Debt & Tax Legislation Before Health Care - Bloomberg
White House Weighs New Panel to Tackle Deficit - Wall Street Journal
After a Humbling Spiral, Kerry Returns to Form - New York Times

Transcripts & Speeches
Guests: Sens. McConnell, Bennet, Brown & Shaheen - State of the Union
Guests: Sens. Durbin, Feinstein, Lieberman & Hutchison - Meet the Press
Sens. Nelson & Coburn, Reps. Wasserman-Schultz, Blackburn - This Week
Guests: Senators Stabenow, Specter, Alexander & Bond - Fox News Sunday
Guests: Senators Schumer & Kyl - Face the Nation

Best of the Blogs
Will Obama Embrace His Inner Commander-in-Chief? - P. Feaver, SG
Reid & Broder Feud - Brian Beutler, TPM
The Growing Climate Scandal - Bruce McQuain, Q&O
Giving Thanks for Capitalism - Mark Perry, Carpe Diem
The KSM Trial and Republican Attacks - Lincoln Mitchell, Huffington Post
Real Clear World
India: Obama's Forgotten Friends - Tunku Varadarajan, Daily Beast
India Can Help in Afghanistan - Marshall Bouton & Alyssa Ayres, Forbes
Israel, Iran and a Nuclear Spring - Benny Morris, The Guardian
Perfect Afghan Democracy Not U.S. Goal - Richard Holbrooke, Der Spiegel
Russia Can't Replicate China's Success - Vladimir Ryzhkov, Moscow Times
Real Clear Markets
Deficits Are Killing Us - George Melloan, Wall Street Journal
Deficit Spending Is a Cure For Our Troubles - William Greider, The Nation
Why the Dollar Will Remain Weak for Some Time - Albert Bozzo, CNBC
Don't Get Carried Away by Housing Numbers - Joshua Zumbrun, Forbes
It's Beginning to Look A Lot Like a 'W' - Irwin Kellner, MarketWatch
Real Clear Sports
Vince Looked Like Veteran QB - Cedric Golden, Austin American-Statesman
Loss Is Kick to Gut for Texans - Richard Justice, Houston Chronicle
Will Twins Keep Their MVP? - Joe Christensen, Minneapolis Star Tribune
Mauer Deserved a Unanimous Vote - Tom Verducci, Sports Illustrated
Top 10 Least Thankful People in Sports - RealClearSports

Straw Man · « **Reply #16 on:** November 25, 2009, 01:10:54 PM »

Quote from: 333386 on November 25, 2009, 01:04:11 PM

RCP is crap? here are the articles for today. Deal with it, Obama is just failing and people are writing about it.
________________________ ________________________ _____

Real Clear Politics Wednesday

Terrorists Don't Deserve Rights of Americans - Peter Regan, New York Post - Neg. Obama

Who is Really on Trial in the KSM Case? - Adam Serwer, American Prospect - Neg Obama

Holder's Decision is Embarrassing & Offensive - Michael Gerson, Wash Post - Neg. Obama

Filibuster Follies - Katrina vanden Heuvel, The Nation - Neutral

Climategate: Alarmism Is Underpinned by Fraud - Ian Plimer, PJM - Anti - Dem

Obama's Unprecedented Regard for His Presidency - Carol Lee, Politico - Anti - Obama

Way Too Early to Judge Obama's 'Mistakes' - Joe Klein, Time - Pro-Obama

Obama Juggernaut Meets Resistance - Andrew Cline, American Spectator - Anti O

Race to the Top in Education - Harold Ford, Louis Gerstner & Eli Broad, WSJ - Did not read it

Huffington Post's Misogyny - Mary Katharine Ham, Weekly Standard - nonsense article

RCP Blog: Obama's Self Inflicted Expectation Gap - Anti O

RCP Morning Edition

Afghan Strategy Will Contain Many Messages - David Sanger, NY Times

Obama Stuck in Muck in Afghanistan - James Meek, New York Daily News

Counting the Blessings of American Medicine - John Olsen, Seattle Times

The Case for Deficit Spending - John Judis, The New Republic

Climate 'Science': Skeptics Are Vindicated - David Warren, Ottawa Citizen

The Gathering Geithner Storm - Thomas Cooley, Forbes

Wall St. Makes Turkeys Out of Taxpayers - Dana Milbank, Washington Post

Obama Faces Challenge with Independents - Jennifer De Pinto, CBS News

Barack & Sarah's Reversal of Fortune - Michael Goodwin, New York Post

How Economy Affects Midterm Elections - Sean Trende, RealClearPolitics

Health Care Mandate is Consitutional - Ruth Marcus, Washington Post

We Pay Them to Lie to Us - John Stossel, RealClearPolitics

Chavez on the Warpath - Luiza Savage, Macleans

Finding the Right Fix for 'Too Big to Fail' - Mortimer Zuckerman, WSJ

How Do You Solve a Problem Like Newsweek? - Noemie Emery, Examiner

Greg Craig: Thanks for the Memories - Maureen Dowd, New York Times

Obama: The First 'Pacific President'? - George Will, Newsweek

PN: The Non-Decider Decides | More on RCP: Twitter | Videos | Polls

RCP Blog: Sestak's Palin Bankshot | USAT/Gallup: Obama at 50

Editorials
Afghanistan Needs Strategy And Will - Investor's Business Daily

Medvedev vs. Putin? Mystery Returns to the Kremlin - CS Monitor

Hugo Chavez Loves Vermin of All Kinds - New York Daily News

Stimulus Snow Job - Chicago Tribune

Global Energy Resource Center

India to Boost Solar Power Funding

Rising Oil Price Risks Derailing Recovery
Cuba Mandates Extreme Energy Cuts

Political News & Analysis
Obama Issues Proclamation of Thanksgiving - Politico
Senate to Take Up Debt & Tax Legislation Before Health Care - Bloomberg
White House Weighs New Panel to Tackle Deficit - Wall Street Journal
After a Humbling Spiral, Kerry Returns to Form - New York Times

Transcripts & Speeches
Guests: Sens. McConnell, Bennet, Brown & Shaheen - State of the Union
Guests: Sens. Durbin, Feinstein, Lieberman & Hutchison - Meet the Press
Sens. Nelson & Coburn, Reps. Wasserman-Schultz, Blackburn - This Week
Guests: Senators Stabenow, Specter, Alexander & Bond - Fox News Sunday
Guests: Senators Schumer & Kyl - Face the Nation

Best of the Blogs
Will Obama Embrace His Inner Commander-in-Chief? - P. Feaver, SG
Reid & Broder Feud - Brian Beutler, TPM
The Growing Climate Scandal - Bruce McQuain, Q&O
Giving Thanks for Capitalism - Mark Perry, Carpe Diem
The KSM Trial and Republican Attacks - Lincoln Mitchell, Huffington Post
Real Clear World
India: Obama's Forgotten Friends - Tunku Varadarajan, Daily Beast
India Can Help in Afghanistan - Marshall Bouton & Alyssa Ayres, Forbes
Israel, Iran and a Nuclear Spring - Benny Morris, The Guardian
Perfect Afghan Democracy Not U.S. Goal - Richard Holbrooke, Der Spiegel
Russia Can't Replicate China's Success - Vladimir Ryzhkov, Moscow Times
Real Clear Markets
Deficits Are Killing Us - George Melloan, Wall Street Journal
Deficit Spending Is a Cure For Our Troubles - William Greider, The Nation
Why the Dollar Will Remain Weak for Some Time - Albert Bozzo, CNBC
Don't Get Carried Away by Housing Numbers - Joshua Zumbrun, Forbes
It's Beginning to Look A Lot Like a 'W' - Irwin Kellner, MarketWatch
Real Clear Sports
Vince Looked Like Veteran QB - Cedric Golden, Austin American-Statesman
Loss Is Kick to Gut for Texans - Richard Justice, Houston Chronicle
Will Twins Keep Their MVP? - Joe Christensen, Minneapolis Star Tribune
Mauer Deserved a Unanimous Vote - Tom Verducci, Sports Illustrated
Top 10 Least Thankful People in Sports - RealClearSports

lol

meltdown

Soul Crusher · « **Reply #17 on:** November 25, 2009, 01:15:15 PM »

No. I am telling you what I read first thing in the AM.

BodyProSite · « **Reply #18 on:** November 25, 2009, 01:16:33 PM »

straw , you may not take my posts serious , lol who cares!!! you are the litter of society and people like you are responsible for the down fall of america, other than you 4 or 5 ass buddies on here no body in the real world takes you seriously

Straw Man · « **Reply #19 on:** November 25, 2009, 01:18:10 PM »

Quote from: BodyProSite on November 25, 2009, 01:16:33 PM

straw , you may not take my posts serious , lol who cares!!! you are the litter of society and people like you are responsible for the down fall of america, other than you 4 or 5 ass buddies on here no body in the real world takes you seriously

I don't get it - are you 333?

I do pretty well in the real world but I'm not shallow or insecure like some people here and have no need to brag

Soul Crusher · « **Reply #20 on:** November 25, 2009, 01:19:20 PM »

Quote from: Straw Man on November 25, 2009, 01:18:10 PM

I don't get it - are you 333?

I do pretty well in the real world but I'm not shallow or insecure like some people here and have no need to brag

Straw - trust me, I have no affiliation with anyone other than myself.

BodyProSite · « **Reply #21 on:** November 25, 2009, 01:20:04 PM »

nope i am not 333 probably dont even live in the same state

240 is Back · « **Reply #22 on:** November 25, 2009, 01:21:38 PM »

a state of denial?

j/k.... 33's use of the celente stuff is impressive. I suspect if 911 happened on obama's watch, 33 would be playing loose change 10 times a day.

Straw Man · « **Reply #23 on:** November 25, 2009, 01:21:47 PM »

Quote from: 333386 on November 25, 2009, 01:19:20 PM

Straw - trust me, I have no affiliation with anyone other than myself.

this guy sounds like he's appointed himself your spokesman

Soul Crusher · « **Reply #24 on:** November 25, 2009, 01:22:31 PM »

Quote from: 240 is Back on November 25, 2009, 01:21:38 PM

a state of denial?

j/k.... 33's use of the celente stuff is impressive. I suspect if 911 happened on obama's watch, 33 would be playing loose change 10 times a day.

Celente is predicting another massive attack, so lets see what happens.