Bank Of International Settlements Sees US Debt/GDP At Over 400% By 2040

It's one thing to hear fringe bloggers raving breathlessly against the collision course that the US economy is on. It is something else to see the Bank of International Settlements call for the baseline projection for US debt/GDP to hit over 400% by 2040. And this excludes the bankrupt GSEs, bankrupt Social Security, and the soon to be bankrupt Medicare. In a must read report, the BIS (of the central bankers' central bank) provides the much needed segue to the work of Reinhart and Rogoff, and in not so many words confirms that the entire developed world is now bankrupt on a discounted basis. With Debt/GDP ratios for virtually everyone expected to jump to over 400% in the bank's baseline scenario, it is no surprise why the Dow may well hit 1 quadrillion on nothing but Weimar and Zimbabwean ponzification, before it crashes instantaneously to zero. We exaggerate about the quadrillion, we do not exaggerate about the sovereign default. The current and previous administrations have doomed this country, just as all other administrations of the developed world have done the same, in order to bail out the banking system, in the greatest fatally flawed private-public risk transfer experiment ever attempted. Those who will walk out of it with virtually infinite wealth are about 0.1% of the US population (the same people who tell you now that all is well, and that their bonuses are fully justified). Those who won't, and will end up doing bad things to the aforementioned cohort, is everyone else. And the "everyone else" is getting angrier by the day, as they realize just how massive the wealth transfer scam truly is... if only they could tear themselves away from the iCrap, watching Tiger Woods' nonsensical Nike ads, or glower in schadenfreude as Simon Cowell rips another wanna be singer from head to toe.

LTCM General Counsel On Debt Denial: "There Is Little Time To Avoid Catastrophe And Almost No Exit", Suggests Gold Price Of $5,500

Recently we posted a terrific interview of Kathryn Welling with LTCM's former General Counsel, James Rickards. The lawyer turned economist, who is now a director of Omnis, posts the following stunner on the implications of the endless sovereign debt glut and the Keynsen abortion that every developed economy has undertaken. As the man who survived (and, well, created) the original market "systemic" event, Rickards should certainly be heard by all those who believe the government can sustain the latest, and by all measures, last iteration of the global reflation Ponzi. Not surprisingly, Rickards is the latest to jump on the fiat alternative bandwagon, seeing gold at $5,500 as a fair price for the precious metal.

Meet Greece's New Saviour

Many have asked why all the consternation about the IMF bailing out Greece. After all, as Bob Pisani claims, it is headed by some woman called Dominique Strauss-Kahn? That name sure doesn't sound like it came from Alabama. So what is the big deal?

IMF Bailout For Greece To Come At SDR Rate Plus 300 bps Plus 50 bps Service Charge, Greece Says "Thank You US Taxpayers"

The IMF, realizing it had a catastrophe on its hands, has caved in and according to Reuters will provide US taxpayer money to Greece at vastly below market rates of the SDR rate plus 300 bps plus a 50 bps service charge. With the SDR rate at 0.26%, this comes out to a ridiculous 376 bps, or massively below where Greece could possibly borrow at market. And guess who takes the first loss risk on a pro rata basis? That's right US taxpayers - you. At least when Greece bankrupts eventually, which it will, and the debt is equitized, the US, well more like Lloyd Blankfein, will become owner of the Cyclades at zero cost. Win win for everyone except 99.5% of America.

Fitch Downgrades Greece To BBB-

Total. Soap. Opera. Rumors of a Moody's Upgrade to AAAAA+++ vastly exaggerated

Fitch Ratings-London-09 April 2010: Fitch Ratings has today downgraded Greece's Long-term foreign and local currency Issuer Default Ratings to 'BBB-' from 'BBB+'. The Outlook is Negative. The agency has simultaneously affirmed Greece's Country Ceiling at 'AAA' and the Short-term foreign currency IDR at 'F2'.

Gold Surges Even As Overnight Futures Ramp Job Seeks To Confuse SkyNet Into Xanaxed Sense Of Calm

Gold is accelerating its move in the upchannel as it seeks to recapture early December record highs of $1,226 quite soon. When a Greek bailout is announced over the weekend, we fully expect a massive spike in Gold as the EMU experiment is pronounced dead and buried. In the meantime, with Liberty 33 unwilling to risk a, gasp, downprint...ever... the overnight ramp job could not be any less obvious.