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Charting America's Brief Trip In And Out Of Austerity... And Onward To Complete Disaster

Tyler Durden's picture


One of the "positive" side-effects of the Treasury's plundering of retirement accounts is that total US debt in June actually declined for the first time since January 2010, dropping by $1.6 billion from the May 31 closing print of $14.344 trillion. No doubt this was predicated by the US Treasury officially breaching the debt ceiling on May 16. Yet due to this, or for some other reason (and it is not a surge in net income tax receipts as these appear to have reached an inflection point earlier in the year and are now trendlining lower on a Y/Y basis), something else happened: the slope on the cumulative deficit line since the start of the depression in December 2007 (see below), is now the shallowest it has ever been. In other words, the US over the past few months, faced with the threat and now reality of a debt ceiling breach was actively cutting spending, while benefitting from a transitory spike in income tax revenues, although unfortunately now that the unemployment rate is back on the trendline to double digits, this will be the only true transitory thing about the US economy. Whether this actual, factual fiscal prudence was conscious is unclear, however the result is clear: faced with the threat of being unable to finance every single dollar in perpetuity, the US government's involuntary self-imposed austerity actually... Worked! And yes, the direct side effect is that Q2 GDP is now likely to come at 1.6%: the worst quarterly increase since... Q2 of 2010 (recall that 2010 Q2 GDP was revised from 2.4% to 1.6$ on August 27 last year... hours before Bernanke announced QE2 ). And there once again is the glaring correlation between the slowing of the economy and the decline in debt issuance, and the actual deficit "improvement." Now take this slower deficit growth, and assume it actually is reversed, i.e., America has a budget surplus. While great for the country in the Long-Run, it would mean that GDP, which is now purely reliant on how much debt Geithner can issue, it would mean a collapse in the GDP, in the S&P, and in Wall Street executives' bank accounts. At least in the absence of QE3, 4 and so forth...

Another way of looking at this "austerity" data is the divergence between cumulative debt and cumulative deficit since December 2007. Since the Depression ver 2, the US generated $3.982 trillion in deficits, while adding $5.194 trillion in new debt (from $9.15 trillion to $14.343 trillion). However, what is notable is that June saw the lowest difference between cumulative deficit and debt, with "just" 30.4% more debt being issued than deficit had to be funded.

Unfortunately this "austerity" will be short-lived for two reasons. First, once the debt ceiling is raised, the nearly $260 billion in plundered retirement trust funds will have to be promptly reinvested. This means that over the next 3-4 months the Treasury will issue a whopper of short-term debt, as it scrambles to catch up to the historical Bill average as a percentage of total debt (which as we observed recently, has plunged). Second, it means that with deficit expenditures no longer having a medium-term bottleneck, deficit spending will literally explode in the next several months, which, due to the catch 22 nature of deficits and their debt-based funding, means that Treasury issuance will jump even more than just the Bill trendline "catch up" implies.

Bottom line, enjoy this slowdown in the speed of the US Titanic while you can. After August 2, we are fully convined the Treasury's bond issuance dial will be turned to the rather unfortunate "ludicrous speed."

The sad truth is that while an American's technical default will certainly not be as bad as all claim (yes, financial markets are rather adaptive ecosystems, and following a day or two of massive pain mostly for the Status QuoTM, things will stabilize) this last chance to fix the evils that came about with promoting moral hazard to the de facto only investment thesis 101, will be promptly gone. Alas, every single time something, anything, threatens the status quo's existence, the biggest threats start flying. What we can be sure is that while it took just under three years between Mutual Assured Destruction episode 1 when Paulson waved a three page blank check termsheet to Congress demanding supreme fascist rights, and the current MAD episode 2, MAD part 3, in keeping with the ever decreasing half life of government intervention and "bail outs", will come far, far sooner. Then MAD part 4 will arrive just after and so forth. At that point, threats about the end of the world will actually be true. However, they will be true no matter what choice is ultimately taken.

And speaking of end of the world scearions, here is Citi's somewhat sober and very detailed look at what will happen should the US default now (all with pretty charts). What is left unsaid is that this same analysis will be infinitely uglier the next time it has to be done, with the opportunity cost of doing the right thing being far greater than even now, as the global financial system shifts even further from equilibrium under the disastrous guidance of global central planning.

From Citi:

Gradually now the questions are coming in. “What will happen if the U.S. government defaults on its debt after August 2?” It’s still nearly unthinkable. The exact date may not be as precise as advertised. Predictably, more of these questions come from distant shores. But the longer Congress lingers, the more frequently the question will be asked.

Some part of this question is in the realm of “what will you do after you commit suicide?” While conflicting in substance, rumblings from Washington in the past week suggested action could be imminent. Of course something seems likely to get done. But to take the question seriously, if the U.S. could spend only its revenues, spending would need to be slashed by about 40%, or over $100 billion per month. That’s about 8% of current GDP non-annualized. If all checks from the Treasury were cut in size but not eliminated, legal obligations such as Social Security Payments would have to be cut by roughly $25 billion per month, or $300 billion at an annualized rate1. This is money that is spent in the U.S. economy, as are the payments for military personnel salaries, federal contractor payments and pension contributions that sum to larger amounts.

We doubt that even the most extremist of policymakers believes that private economic activity will immediately fill the void left by so large a drop in these deficit-financed “income” streams. Their many constituents would let them know the personal impact whatever the perceived benefits (see figure 1). If the U.S. Treasury was determined to make U.S. interest payments on the notion that if it does not, the U.S. might be required to spend only its revenues for far longer, than other outlays would need to be cut nearly 50% rather than 40%.

A near immediate income decline of 8%-9% of GDP, and the uncertainty around policy, would weaken expectations priced in asset markets, reducing economic activity by an even larger amount before long. Such would be the likely case even if Treasury debt payments were maintained and “prioritized.”

In the event of a Treasury debt default, we would note that U.S. Treasuries are a key risk-free asset on bank balance sheets across the world and the single-largest form of loan collateral. The U.S. Treasury is the ultimate guarantor of bank deposits. The financial implications of an actual Treasury default, even briefly, could represent the largest financial shock in history, potentially creating a domino of defaults. As such, creating quantitative economic projections on a default scenario seems like a foolish errand.

Scared yet? Good. That is precisely Citi's goal.

Unfortunately in the same note, Citi also shares some other charts, all of which indicate that no matter what happens this week, or at 11:59:59pm on August 2, the long-term fate of the world's premier entitlement state is one which ends in disaster, and if history is any indication: war... Only this time everyone has the same just as destructive toys.

To wit:

The astounding growth rates for healthcare outlays both past and present – not matched by revenue streams – will unravel most any other structural changes in the budget given enough time (see figures 3-5 and “U.S. Budget: Why is a 9% Growth Rate for Healthcare Necessary?” April 25, 2011). As such, any long-term changes that matter will affect the health care budget.

Even the words “healthcare budget” seem at odds with the way Americans consumers and policymakers view healthcare - essentially “priceless.” It seems clear that a nation that spends double the developed country average on healthcare for sub-standard aggregate outcomes misallocates healthcare resources and almost certainly overspends in the process (see figures 6-7). As a practical matter for investors, one might want to question whether the long-term secular rise in the healthcare sector’s share of U.S. corporate profits will be allowed to continue unchallenged (see figure 8).

For short- to intermediate-term budgets, the latest three months of rising unemployment provide a reminder that it’s poor timing for macro tightening steps if there is any choice.

Having at least a “down payment” toward significant long-term structural budget underway could help with flexibility in running large budget deficits for the time being. In observable modern times, the U.S. has never improved its budget position during periods of rising unemployment or below-trend economic growth (see figure 9).

Reread the last sentence from Citi as it delightfully captures the Catch 22 nature of the problem. In its overarching attempt to take sole control of the US economy, funded with ever cheaper debt, the US government has now become a central planning behemoth the likes of which the USSR could only hope to emulate even in its heyday. And the lifeblood on which this behemoth lives is one: exponentially more debt. Which is why, more than anything, nobody in DC can possibly demonstrate the political will, which also equates to immediate career suicide, to do the right thing - in this case just say no to more debt - as it would mean one thing and one thing only: putting the fate of their country over and above their own career prospects, as this will expose the biggest lie: the welfare state that is the United Socialist States Of America is more naked than any emperor in history.

And as is well known, no career politician has ever cared enough about their country enough to actually see their own future as merely secondary to that of the United States.


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Sat, 07/16/2011 - 20:15 | 1462854 NuckingFuts
NuckingFuts's picture

Eat your peas, bitchez

Sat, 07/16/2011 - 20:40 | 1462887 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

People do not deserve any wealth, only bankers deserve wealth.  Bankers rule!

Sat, 07/16/2011 - 20:54 | 1462911 NuckingFuts
NuckingFuts's picture

Bankers can have the Lima Beans, I hate that shit.  I want my fucking peas!

Sat, 07/16/2011 - 21:03 | 1462921 Anonymouse
Anonymouse's picture

Works for me.  I like peas and lima beans (tip:  cook them with ham and make a sort of gravy.  You're probably eating them too dry).


Too bad the budget is harder than your lima beans.  Still, it seems to me if spending went up by about $1.5T per year since 2008, why is it supposedly impossible to cut it back to 2008 levels.  I mean, they are speaking of "reducing" (that is, reducing projected increases) spending by not much more than that over 10 years.


Clearly, they are not trying too hard.  This is all kabuki.

Sat, 07/16/2011 - 21:13 | 1462936 snowball777
snowball777's picture

No, I'm not eating them 'too dry'...they just remind me of when I was a kid and we had to eat them for weeks on end because they were affordable. Never again. ;)

Sat, 07/16/2011 - 21:38 | 1462961 duo
duo's picture

Lima beans, from Lima, Ohio, or Lima, Peru?

Sat, 07/16/2011 - 23:07 | 1463081 DoChenRollingBearing
DoChenRollingBearing's picture

Peas and beans ARE tastier in Peru than here.

Sun, 07/17/2011 - 08:56 | 1463379 FEDbuster
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Soon some will long for the days when they had a choice between peas and beans.  Haitian mud pies may be all that those relying on government support for their existence will have to eat.  Our local food bank is currently "overwhelmed" by the number of families seeking assistance.

Sun, 07/17/2011 - 11:03 | 1463494 grey7beard
grey7beard's picture

>> Haitian mud pies may be all that those relying on government support for their existence will have to eat.

I don't think the military is going to be very happy eating Haitian mud pies.

Sun, 07/17/2011 - 18:02 | 1464691 knowless
knowless's picture

then they defect and go to where the money is (drug cartel style?)

Sat, 07/16/2011 - 22:07 | 1462994 BeansBulletsBandaids
BeansBulletsBandaids's picture

Everything's better w/ a little pork added to it - especially in DC.....

Sun, 07/17/2011 - 00:27 | 1463180 Oh regional Indian
Oh regional Indian's picture

Instant classic. 

And I say that as a vegetarian. ;-)


Sun, 07/17/2011 - 00:16 | 1463167 WakeUpPeeeeeople
WakeUpPeeeeeople's picture

mushy peas rock!!!!!!

Sun, 07/17/2011 - 08:12 | 1463355 GubbermintWorker
GubbermintWorker's picture

Boil em, mash em, put em in a stew!

Sun, 07/17/2011 - 00:00 | 1463146 Frankie Carbone
Frankie Carbone's picture

Bankers?Puh! Let them eat steak.

Sat, 07/16/2011 - 21:23 | 1462942 macholatte
macholatte's picture

Can somebody please explain this to me:

If the Fed "owns" $1T+ of "debt", why not just wipe that out? Just take an eraser to the books and be done with it. The Treasury would have been paying interest to itself anyway.

Who gets hurt?

Sat, 07/16/2011 - 21:56 | 1462982 Manthong
Manthong's picture

My guess is that those reserves have somehow been synthesized, securitized, collateralized, pledged, loaned, leased, insured, reinsured, swapped, conduited, shafted, chopped, chromed and toasted eight ways to Sunday and some other multi-mega-trillion dollar world of hurt is held hostage to the flow that paper represents.

I dunno, is that thinking off in left field?

Sun, 07/17/2011 - 00:29 | 1463181 Oh regional Indian
Oh regional Indian's picture

Actually it's much worse manthong and left field is a vast endless space chock full of "revelations"!


Sun, 07/17/2011 - 02:56 | 1463288 Goatboy
Goatboy's picture

I checked out of curiosity and spent 2 hours reading as hypnotised.


Sun, 07/17/2011 - 07:22 | 1463340 Oh regional Indian
Oh regional Indian's picture

GoatB, you have no idea how multi-contextually nice it was for me to read what yuo wrote. Thanks.


Sat, 07/16/2011 - 21:59 | 1462987 sitenine
sitenine's picture

Moral hazard.

Isn't humanity a bitch?

Sat, 07/16/2011 - 22:58 | 1463067 JW n FL
JW n FL's picture

RSA Animate - The Empathic Civilisation

Sun, 07/17/2011 - 09:32 | 1463409 dogbreath
dogbreath's picture



he doesn't include the psychos' amonst us who will want to run the show no matter what you call it.

Sun, 07/17/2011 - 09:39 | 1463418 JW n FL
JW n FL's picture

he exactly comments on those who are separated from their natural actions.

Sat, 07/16/2011 - 22:17 | 1463012 Raymond Reason
Raymond Reason's picture


Sat, 07/16/2011 - 23:00 | 1463071 JW n FL
JW n FL's picture

more gold! I agree.. dont forget silver.. it purifies dirty water.. clean water is a great thing to have, regardless of what else is going on! whats clean drinkable water worth?

Sat, 07/16/2011 - 23:51 | 1463139 tyler
tyler's picture

Ask some people from Africa, I'm pretty sure clean water is priceless.

Sat, 07/16/2011 - 23:00 | 1463072 AldousHuxley
AldousHuxley's picture

Basically that's a suicide for the Fed.


Sun, 07/17/2011 - 09:43 | 1463424 JW n FL
JW n FL's picture

How about a "Suicide by FED"?

We ALL are offing ourselves!

Sun, 07/17/2011 - 00:11 | 1463159 Anonymouse
Anonymouse's picture

Ignoring the who Ponzi issue for the moment, the USTs and other Fed assets support the dollar.  If the debts were canceled, there would be less supporting the dollar, and the implication is that it would be done again.  Monetize debt (not that the Fed would EVER do that) then cancel it --> more and more currency backed by fewer and fewer assets

Sun, 07/17/2011 - 00:23 | 1463176 Dr. No
Dr. No's picture

The fed is separate from the treasury. Whats in itfor the fed to forgive the debt??

Sun, 07/17/2011 - 01:51 | 1463230 cranky-old-geezer
cranky-old-geezer's picture

If the Fed "owns" $1T+ of "debt", why not just wipe that out?

Erasing debt (forgiving debt) is THE cardinal sin among bankers. 

Debt is how bankers make money.  You might say debt is the product bankers offer to the public.  

Erasing debt off their books (forgiving debt, writing debt off) is like GM giving cars away, or Coka-Cola giving Coke away, or some other company giving their products away. 

Its like you working for free, giving your labor away.   Would you do that?

Granted, it doesn't cost bankers anything to produce their product.  Money they lend out is created out of thin air. Bankers have no cost basis in their product.  Interest they earn on debt is pure profit.

Yes bankers have overhead expenses.  But there's no cost-of-sales. Gross profit on debt is 100%.

If the Fed forgave the 1 trillion or so debt owed by the US Treasury, it wouldn't solve the real problem.  The US government would continue borrowing and spending like a drunken sailor. 

If the Fed forgave the 1 trillion or so debt owed by the US Treasury, it would set a dangerous precedent.  The US government would expect the Fed to continue forgiving debt.

If the Fed forgave the 1 trillion or so debt owed by the US Treasury, it would set a clear hyperinflationary trend.  There's no way that money created out of thin air and loaned to the government could ever be clawed back and taken out of the money supply.

If the Fed forgave the 1 trillion or so debt owed by the US Treasury, it would create fear and panic among other holders of US Treasury debt.  They would fear the US government might simply choose to not pay back the debt they hold

...which would cause the value of US Treasury debt to collapse overnight

...which would make banks around the world holding large amounts of US Treasury debt  insolvent overnight

...which would precipitate a crash of the banking system worldwide

...which would precipitate a crash of the financial system worldwide.

It would also cause the US dollar to crash and lose its world reserve currency status overnight

...which would cause the US government to collapse overnight

...which would cause the Fed to collapse overnight.

So no, The Fed isn't going to write off one dollar of US Treasury debt.  No fucking way.

Actually the US dollar collapsing, and the US government collapsing, and the Fed collapsing, would be the REAL solution to America's problems.  All of them. 

Just wanted to mention that.

Sun, 07/17/2011 - 02:50 | 1463285 mophead
mophead's picture

There are a lot of reasons why the debt can't be forgiven. The real reason is IMO is a currency collapse. All debts are being forgiven, btw... through inflation.

Sun, 07/17/2011 - 10:30 | 1463457 j0nx
j0nx's picture

Sheeeit. Is your paycheck getting bigger? Mine sure as shit isn't and hasn't for 3+ years. We are NOT experiencing inflation right now and won't be for the indefinite future. We are experiencing biflation on our way to hyper-biflation. The things you need (gas, food, ammo, PM, other commodities) are going wayyy up in price and the things you own or don't really need are going down in value. Your paycheck is dropping or is remaining flat if you are lucky. Kinda hard to have your debt burden become easier when your paycheck is stagnant and your expenses are going up 20% a year....

Nope, we get the WORST possible outcome imo mostly due to globalization. Globalization makes it impossible for the effects of inflation to filter down into your paycheck when some little guy in China or India will do your job for 1/3 the wage or less.

Sun, 07/17/2011 - 11:39 | 1463583 Dr Zaius
Dr Zaius's picture

I remember when we used to say some guy in China or India will do your job for 1/10 your wage or less. I guess we are getting to parity faster than we think.

Sun, 07/17/2011 - 08:50 | 1463375 cossack55
cossack55's picture

Please forgive repeats but this is still germane at 0:57.

Sun, 07/17/2011 - 09:03 | 1463387 FEDbuster
FEDbuster's picture

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
- Napoleon Bonaparte, 1815

Same old shit, different century.

Sun, 07/17/2011 - 09:47 | 1463427 JW n FL
JW n FL's picture


A History of Money and Banking in the United States (Part 1, 2/4) by Murray N. Rothbard

Sun, 07/17/2011 - 11:43 | 1463595 moronsreign
moronsreign's picture

Sounds like just what we need. Push the reset button,endure the consequence for some undetermined period and start over. Beats a shooting revolution or war which we will get as things are going now.

Sun, 07/17/2011 - 12:49 | 1463804 mr. mirbach
mr. mirbach's picture

What would occur if CONgress revoked the FED's Charter? Could we "erase" the debt then?


Sun, 07/17/2011 - 02:33 | 1463274 piceridu
piceridu's picture

It's about Balance Sheets! Every dollar that comes into the system comes in as an asset to the Banks and a Liability to the's just that simple. The Private Capital Holders need their continuous pound of flesh from the people...ROC cancelling debt is out of the question.

Sun, 07/17/2011 - 02:35 | 1463275 piceridu
piceridu's picture


Sun, 07/17/2011 - 03:58 | 1463309 straightershooter
straightershooter's picture

Say, your mom (the Fed) borrows a million from you to loan it to your faineant elder brother (the Treasury). So far, so good. Your mom owns an asset ( from your elder brother) and owes a liability to you. Still with me?

Now, you are proposing that since it all happens in the family, why not wipe it all out?

Nobody get hurts, right?

Sun, 07/17/2011 - 03:59 | 1463310 straightershooter
straightershooter's picture

Say, your mom (the Fed) borrows a million from you to loan it to your faineant elder brother (the Treasury). So far, so good. Your mom owns an asset ( from your elder brother) and owes a liability to you. Still with me?

Now, you are proposing that since it all happens in the family, why not wipe it all out? N

Nobody get hurts, right?

Sat, 07/16/2011 - 20:20 | 1462857 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Austerity in America is not going supersize on those fries and only have the basic cable package.

Sat, 07/16/2011 - 20:22 | 1462860 NuckingFuts
NuckingFuts's picture

+1, or having a phone that only makes phone calls.  OH THE HUMANITY!!!!

Sun, 07/17/2011 - 00:49 | 1463192 Oh regional Indian
Oh regional Indian's picture

+2 for you and Funkymonkey above.


Sun, 07/17/2011 - 01:45 | 1463235 AldousHuxley
AldousHuxley's picture

+1, either American idol or America's got talent, but not both.

Sun, 07/17/2011 - 11:14 | 1463515 grey7beard
grey7beard's picture

>> Austerity in America

Sounds good, but unfortunaly the folks in the center of the austerity target are the least well off.  There are plenty of seniors just barely getting by.  Don't forget, those are also the folks who have been the most hurt by the zero interes rate policies of the Fed.  If they were to target the gluttonous consumption segment of America, I'd not protest, but celebrate a needed adjustment to attitude. 

Sat, 07/16/2011 - 20:24 | 1462858 SwingForce
SwingForce's picture

"Which is why, more than anything, nobody in DC can possibly demonstrate the political will, which also equates to immediate career suicide, to do the right thing - in this case just say no to more debt - as it would mean one thing and one thing only: putting the fate of their country over and above their own career prospects.

And as is well known, no career politician has ever cared enough about their country enough to actually see their own future as merely secondary to that of the United States."


Truer words were never written, thank the very patriotic Zero-Hedge to print them. Thank you.


Sat, 07/16/2011 - 20:24 | 1462864 NuckingFuts
NuckingFuts's picture

+1K for ZH.  Many thanks.....see you on the otherside of this......I hope.

Sat, 07/16/2011 - 22:12 | 1463005 The Architect
The Architect's picture


Sat, 07/16/2011 - 20:48 | 1462868 hedgeless_horseman
hedgeless_horseman's picture

Chart this...

Short growth.

Long sustainable, defensible, income.

Produce more with fewer and lesser resources.



Sat, 07/16/2011 - 20:34 | 1462877 DeadFred
DeadFred's picture

So if/when the ceiling is extended and treasury starts to sell new debt to replace the funds they pilfered- what happens to the bond stock and currency markets? Will the purchases be phased in slowly enough for be orderly or are we going to see some foreseeable spikes?

Sat, 07/16/2011 - 22:24 | 1463027 Raymond Reason
Raymond Reason's picture

If the Fed isn't stepping in and buying from the PDs, could be a liquidity trap. 

Sat, 07/16/2011 - 20:35 | 1462879 unum mountaineer
unum mountaineer's picture

that dalai lama meeting didnt go over too well.

Sat, 07/16/2011 - 21:19 | 1462940 francis_sawyer
francis_sawyer's picture

i hope they at least had the courtesty to let him out the front door this time...

BTW... The Lama... BIG HITTER!

Gunga Galunga


Sat, 07/16/2011 - 23:05 | 1463080 dondonsurvelo
dondonsurvelo's picture

Note Obama didn't wear a tie to the meeting.  Didn't want the Chinese to think it was and official meeting, just a casual get together amoungst old friends.

Sat, 07/16/2011 - 20:35 | 1462882 Reptil
Reptil's picture

Just like in Greece, this "Austerity" doesn't solve anything.

No one said it did, but I just wanted to say it doesn't, so I did. ;-)

Sat, 07/16/2011 - 20:37 | 1462884 Eireann go Brach
Eireann go Brach's picture

But once you throw in those 56 inch gold rims that were ordered for Air Force One that should put the debt back at negative. I got's to get me some of those rims yo, Snoop Dog said my Air Force One would be rollin!

Sun, 07/17/2011 - 02:02 | 1463244 HungrySeagull
HungrySeagull's picture

Air Force One could not lift itself.

Now a B2 Stealth Bomber, if made of pure gold 100%; would be very much cheaper than the way it is built.

Sun, 07/17/2011 - 09:10 | 1463391 FEDbuster
FEDbuster's picture

Like an AK finished in "Ghetto camo":

Sun, 07/17/2011 - 09:52 | 1463434 JW n FL
Sat, 07/16/2011 - 20:45 | 1462890 oldmanagain
oldmanagain's picture

Can not figure out how not paying your bills is good for the country.

Travel, medical care, commerce, weather news, food inspection, etc.

For nothing.  Not paying the bills, interest, etc does nothing but increase costs.  Interest rates.

And above all tax revenue will collapse.  Deficit will grow very rapidly, at very high rate.

Nice to be short. But markets most likely will be closed down.

No internet.

Sat, 07/16/2011 - 22:49 | 1463057 Prometheus418
Prometheus418's picture

Just for your consideration:  The cell networks are not going to go down.  The military will keep them operational, and it's entirely possible that the internet will survive in a truncated way on those connections.  A smart phone might be a very useful thing to have when TSHTF.  Some access is better than none, after all.

Sun, 07/17/2011 - 00:05 | 1463154 sun tzu
sun tzu's picture

The only real bills that have to be paid is the interest on the debt. There is more than enough tax revenue to do that.

contrary to what 0bama said, the sky will not fall.

Sun, 07/17/2011 - 02:02 | 1463245 cranky-old-geezer
cranky-old-geezer's picture

But there's not enough tax revenue to pay interest and pay off maturing debt and keep the government operating.

Failure in any one of those three areas would precipitate a collapse of the US government. 


Sun, 07/17/2011 - 02:20 | 1463261 StychoKiller
StychoKiller's picture

You type that like it's a bad thing! :>D

Sun, 07/17/2011 - 09:58 | 1463437 JW n FL
JW n FL's picture

Forced Austerity will bring about (at some point, maybe the the first second) a Hungry, Well Armed Crowd.. the size of which the World has never seen before.


and it is all the Monkey's who consider themselves ready for such an event, when they run out of food and start stalking the neighbors! watch out! the in fighting thats what will hurt the population count..


and who does this serve? well I guess China will be the stable super power and America will be dead.. reserve currency pissed away.. manufacturing has already been sold off and will continue to move with civil unrest..


Yep! this is all good for all people!


why we cant just hang the treasonous fucks and bring the jobs back home is beyond me?

Sun, 07/17/2011 - 10:38 | 1463466 j0nx
j0nx's picture

"The only real bills that have to be paid is the interest on the debt. There is more than enough tax revenue to do that. Contrary to what 0bama said, the sky will not fall."

Tell that to the ghetto rats and section 8 shitbirds that won't be getting their SNAP cards and vouchers next month. Or the old folks that won't be receiving their SS check. Sure there is enough revenue to pay the interest but a fat lot of good that will do when the FSA starts getting squirrely. Coming from someone who lives in a hood taken over by section 8 losers and illegal aliens, this is of great concern to me.

Sun, 07/17/2011 - 08:24 | 1463361 snowball777
snowball777's picture

Ask one of the people squatting in their foreclosure and driving a shiny new leased Lexus about it.

Sun, 07/17/2011 - 13:20 | 1463898 Kali
Kali's picture

lol.  Reminds me of yesterday.  I was walking my dog by a local farmer's market.  A young girl, carrying a bouquet of overpriced flowers she bought at one of the market booths, tried to panhandle me for a dollar.  WTF?  She could afford to buy the flowers, but was panhandling for? 

Sun, 07/17/2011 - 13:40 | 1463951 snowball777
snowball777's picture

My fav is the kids in Berkeley with the expensive tattoo and nose-ring combo begging for BART fare. I pretend to unzip my fly and raise my eyebrows.

Sat, 07/16/2011 - 20:43 | 1462893 wsmith
wsmith's picture

You guys underestimate the power of the U.S. government.

They can keep the ball in the air for a long long time.

We're all hoping for the crash so we can build something better.

But no crash is coming.  This is the new normal.

Food stamps for everybody and wage deflation!

Welcome to the global plantation.

Sat, 07/16/2011 - 21:07 | 1462925 NuckingFuts
NuckingFuts's picture

I hate to agree with your comment but I think you might be right.  I'ld give it 50/50 they can keep shit together.  Luckily I grow my own food and am self now.

Sat, 07/16/2011 - 21:46 | 1462970 Cabreado
Cabreado's picture

"But no crash is coming.  This is the new normal."

That would require a peaceful relinquishment of Expectations by the masses, and an Honest leadership on the way down... A stretch, perhaps... Also defying history, and defying human nature.


Sat, 07/16/2011 - 22:32 | 1463036 NuckingFuts
NuckingFuts's picture

I am afraid you are correct Sir.  I'm still holdin' even odds since........why TF not.  Either way I'm ready, lets just get on with it.

Sat, 07/16/2011 - 22:31 | 1463035 Raymond Reason
Raymond Reason's picture

They might keep it going longer than we expect.  But it's a mathmatical impossibility to sustain the status quo indefinately.  Hope it ends in localized economies, and not a police state. 

Sun, 07/17/2011 - 00:59 | 1463203 Oh regional Indian
Oh regional Indian's picture

Well said Raymond.

Sun, 07/17/2011 - 10:47 | 1463471 j0nx
j0nx's picture

It won't. It will end in tears and most likely civil war/dictatorship if it does happen. Liberal vs conservative is looking more likely by the day, at least from where I stand. Neither side can stand each other and neither side is willing to compromise any more. I see it every day in my daily life. Each side believes vehemently that the other is responsible for the destruction of the country. I have never seen a greater polarization.

Sun, 07/17/2011 - 13:50 | 1463972 grey7beard
grey7beard's picture

>> Liberal vs conservative is looking more likely by the day, at least from where I stand.

So how are the liberals and conservatives going to pick their targets?  I'm regularly branded a liberal because I don't buy into all the right wing propaganda.  In spite of this, I've never had anyone be able to even give the slightest description of what a liberal is, or what about my positions makes me a liberal.  Apparenlty all these folks know is if you aren't the rightest of the right wing nutjobs, you are a liberal.  If the dipshits can't even describe what a liberal is, how are they going to pick them out to kill them?

One of my favorite wingnut characters talks about how he's going to be able to pick off liberals from a thousand yards with his gear.  He doesn't really know what a liberal is, but he can pick them off at 1,000.  I guess Rush and Beck are going to be his spotters.

You might get white verse black/brown, or rich/poor, or city/country, or north/south, but you aren't going to get liberal/conservative.  If the shtf, it will be neighbors protecting neighbors, reguardless of the political affliation.



Mon, 07/18/2011 - 09:01 | 1465915 j0nx
j0nx's picture

My neighbors are all illegal aliens and section 8 thugs thanks to liberal Virginia sanctuary and welfare policies. I might know very little but I do know that I will not be hunkering down with those fucking dipshits when TSHTF. Most likely I will have to shoot my way out of the hood as I am one of maybe 6 or 7 white people in a housing development with 96 homes in it. And I am not exagerrating. You gotta love it when you take a few days off to run errands and cruise through the hood to see house after house of able-bodied men and women hanging out on the front porch at 12pm as 20 kids run around in the street. I'm glad my taxes are going towards something worthwhile...

Sat, 07/16/2011 - 20:44 | 1462894 savagegoose
savagegoose's picture


Sat, 07/16/2011 - 21:05 | 1462924 Anonymouse
Anonymouse's picture

True, except they didn't reduce spending.  They just underfunded pensions.  And with government accounting, it doesn't show up.  Accounting that would send corporate officers to prison is business as usual for the government

Sat, 07/16/2011 - 20:45 | 1462897 Shineola
Shineola's picture

Oh, our leaders are just heading us toward Virtual Austerity, then.  Hell, I feel better already. 



Whew..... for a minute there I thought this was going to be tough.

Sat, 07/16/2011 - 20:45 | 1462900 gwar5
gwar5's picture

Good Point. Things have changed a little for the better since the election of 2010.

Quibble: This was not self-imposed austerity, per se. This was imposed by the Tea Party and middle America dragging the socialist democrat party kicking and screaming all the way to the polls in November 2010.

"Marxism never sleeps, so neither shall I" -- Soviet gulag inmate.

Sat, 07/16/2011 - 21:16 | 1462938 NuckingFuts
NuckingFuts's picture

They (in the gulag) would tattoo a pic of Marx or Lenin or Stalin over their heart in the hope that the firing squad would not shoot them.  I got a tat shop with Obama and Boner ink cheap!

Sat, 07/16/2011 - 21:30 | 1462951 francis_sawyer
francis_sawyer's picture

Speaking of 'BONERS'...

So a guy on vacation in the islands goes into the urinal in the bar and prepares himself to take a leak... Along side him sidles up this rastafarian...

They both proceed to whip it out to do their business and the white dude casually glances down and sees "WDY" tattooed on the rastas dick... He's PISSED because he also has WDY tattooed on his own dick (which he put there at the request of his girlfriend WENDY (who cajoled him into coming down on this vacation in the first place)...

So he says to the rasta... Does that tattoo of yours mean what I think it means?... Does it stand for "Wendy"?

rasta looks at him, laughs, & says... " No mon... Wanna see? It short for "Welcome to Jamacia Mon Have a Nice Day"...  


Sat, 07/16/2011 - 22:38 | 1463042 NuckingFuts
NuckingFuts's picture

LOL......I told that one in college 20 years ago.  Now it's welcome to "my state" have a nice day.

Sat, 07/16/2011 - 20:50 | 1462908 bugs_
bugs_'s picture

Largest Financial Shock in History

U-S-A! U-S-A! U-S-A!

Sat, 07/16/2011 - 20:56 | 1462913 LookingWithAmazement
LookingWithAmazement's picture

Anyone knows if the Comex Crash is about to arrive? Tyler? Any data on the physical silver delivery?

Sat, 07/16/2011 - 21:39 | 1462963 foofoojin
foofoojin's picture

It's like a dutch auction at this point.  there alot of big players ready to take the whole thing but there all hopeing the price goes down. right now you need  a billion. if blyth keeps dumping silver then the total cost of buy out goes down. if silver goes down, the total cost of buyout goes down also.

Basically the Comex is in a power death spiral.  first one to grab the throat wins.

Sat, 07/16/2011 - 21:58 | 1462985 LookingWithAmazement
LookingWithAmazement's picture

The first to grab the whole thing would make silver skyrocket. Isn't grabbing more attractive than ever?

Sat, 07/16/2011 - 23:01 | 1463074 Manthong
Manthong's picture

Where's Nelson Bunker Hunt when you really need him?

Price wouldn't be an issue with him.

But in this Casino, I think a Hunt, Buffet or Soros would be considered a card counter and even with a 100% margin, they wouldn't let them play.

Sun, 07/17/2011 - 02:05 | 1463248 HungrySeagull
HungrySeagull's picture

Yes, but do you have the room to take delivery?


Suppose he did grab the silver ring. Everyone else will double, triple or whatever overnight and sell for profit taking in the morning. It would be weeks until the pharinas (Spelling?) discover that there is nothing but skeleton remaining.

Sat, 07/16/2011 - 20:59 | 1462916 Village Idiot
Village Idiot's picture

"After August 2, we are fully convined the Treasury's bond issuance dial will be turned to the rather unfortunate "ludicrous speed."


"It goes to 11..." 

Sat, 07/16/2011 - 23:03 | 1463078 JW n FL
JW n FL's picture

does that mean my 7 speed BM is not going to be worth more than... LULZ on goes to 11! or 7 or??

Sat, 07/16/2011 - 23:04 | 1463079 JW n FL
JW n FL's picture

I dont own a BM, strictly for the ha ha..

Sat, 07/16/2011 - 21:01 | 1462919 LookingWithAmazement
LookingWithAmazement's picture

But what if there comes a run into the T-bonds? Panic in the eurozone, China cooling down, US economy flattening ... gamblers looking for a safe haven can turn the bonds into gold. Would be a major setback for many doomprophets. Could it be?

Sat, 07/16/2011 - 21:07 | 1462927 Anonymouse
Anonymouse's picture

Been waiting for that sort of thing to boost the US$ (short-term).  Getting my butt handed to me so far.

Sat, 07/16/2011 - 21:45 | 1462968 Boston
Boston's picture

Since May 2010 (flash crash, Greece I, etc.), we really haven't had a true Risk Off panic period that lasts at least a months or two.  

When, not if, this happens, the USD will soar, if only temporarily.

Sat, 07/16/2011 - 23:27 | 1463113 DeadFred
DeadFred's picture

My scenario has a debt level increase followed by a takedown of stocks to make demand for the new debt being issued, dollar soars, not quite enough demand so the dollar drops back down to about present levels. I love making scenarios, sometimes they are even close.

Sun, 07/17/2011 - 08:05 | 1463350 Are you kidding
Are you kidding's picture

That's my thinking too...they need to sell a LOT of bonds to make up for the accounting tricks they used during this debt freeze...and there are already problems with getting bidders.  They'll tank stocks to get their bonds to sell.  Or start QE3 immediately.

Sat, 07/16/2011 - 23:36 | 1463127 Anonymouse
Anonymouse's picture

Hoping for that, though it makes me feel a bit guilty wishing bad on someone

Sun, 07/17/2011 - 01:03 | 1463207 Oh regional Indian
Oh regional Indian's picture

I think a short, hyperdeflationary dive is baked in, with such little cash in middle or lower class hands (less than ever), cherry picking days for those with cash.

Once all the good shit is sniffed up, the hockey stick will resume it's relentless, upward cimb.

The deflation seems about to begin.


Sat, 07/16/2011 - 23:09 | 1463083 oldman
oldman's picture

If the world markets were empty of the american banks and media---all of this would be just another day

reading these comments one is struck by the mass hysteria over the inevitable

Sun, 07/17/2011 - 00:21 | 1463174 LookingWithAmazement
LookingWithAmazement's picture

You mean: inevitable US default? Or collapsing dollar?

Sun, 07/17/2011 - 01:29 | 1463225 oldman
oldman's picture


Whatever comes is inevitable; that's what I like about being here.

Actually, though, I came back to see if there was anything to do about it and now that I am among us again, it is like I never left; we seem to still be stuck in the fifties, though I cannot name the century(it has to be one of the last four, right?).

I suppose, however to answer your question directly, it is inevitable that a populace without any sense of solidarity has to eventually come to this pass; everyman for himself means that most will fail, this has been inevitable throughout human history. Default nor dollar are the issue; fukushima is more important than either of these as is degradation of the mutual habitat we share with the other species.

It is inevitable that at some point we will have to choose survival over destruction, if it is not already too late-------------

OK, too preachy---still locked in my conditioning----mind too rigid----

Your question is one that causes me to think about serious things rather than the theater we crave.

Thanks, Looking---------this helped a lot                  om

Sun, 07/17/2011 - 02:16 | 1463254 cranky-old-geezer
cranky-old-geezer's picture

No, the US government won't default, yes, QE in some form will continue, and yes there will be hyperinflation, and yes the US dollar will collapse.

I have historical fact on my side.  Ano no, it won't be different this time.

Sun, 07/17/2011 - 10:53 | 1463483 j0nx
j0nx's picture

Uh huh, good luck getting those American paychecks to increase with Chinese and Indian labor waiting in the wings to work for pennies on the dollar...

Sat, 07/16/2011 - 21:15 | 1462932 tom a taxpayer
tom a taxpayer's picture

Austerity??? When you see no long lines at the $10 to+$20 car wash (wax and pamper my 3,000 pound iron bitch or big plastic-clad gigolo), that will be austerity.

Sat, 07/16/2011 - 21:12 | 1462933 mynhair
mynhair's picture

What is a technical default?  Not paying takers?
Inquiring minds want to know how your Lib minds work....

please not cut SS checks to show what a farce SS is.

Sat, 07/16/2011 - 21:54 | 1462981 snowball777
snowball777's picture

Violating the covenants in the contract (debtor shall 'X', debtor shall not 'Y'...).

As for 'Lib minds': considerably better than yours, apparently.

Sun, 07/17/2011 - 09:44 | 1463423 Calmyourself
Calmyourself's picture

Envy leaks from your pores like a putrescent stink.  Like most Libs your angry for exactly what you do not articulate but you hope your pols can mollify your angst, never happen, they derive too much power from your pain.

Sun, 07/17/2011 - 09:55 | 1463436 snowball777
snowball777's picture


Sat, 07/16/2011 - 21:15 | 1462935 steve from virginia
steve from virginia's picture


Absent the $20 billion or so gifted by the Treasury to the US economy every single day, it is going to be hard to service the public AND private debt of $55 trillion. US govt deficit is about equal to the debt service on the total debt (from St. Louis Fed).

The debt service/rollover machine is a kind of 'just in time' delivery system, the need for liquidity post- shutdown will become instantly acute.

By the 4th of August, the Libor will be near the Shibor and money/repo markets under massive strain. Right about then is when leveraged positions in all asset classes will be facing margin calls, with an accelerating rate of involuntary deleveraging in markets that are 'cornered' or 'squeezed' particularly commodities.

Even if the debt ceiling is raised on the 3d, the 'rachet' effect of each day's missing $20 billion will not be made up for a long time as the different funding mechanisms 'lose their places'.

By week two the 'mother of all liquidity squeezes' will be underway as the Treasury -- faced with having to direct funds toward positions emptied during the runup of the default -- will be left with its own liquidity shortfall. Even when the Fed provides, the means to get Mr Liquidity where it can do the most good will be dependent on 'above ground' factors such as whether Treasury staff can be made to work 30 hours per day.

The only thing that will 'save' the US is the massive eurodollar float overseas. How many weeks will it take to repatriate dollars and at what sort of a discount? Rates on intermedate debt securities of all kinds will probably double and double again.

Then ... the derivatives' losses will start to show up on big bank balance sheets. If 10% of total public/private debt is delevered 'creatively' the game is over. There will be a run out of all kinds of assets.

Best thing right now would be for Dow to drop 500 pts. on Monday.

Sat, 07/16/2011 - 21:26 | 1462946 snowball777
snowball777's picture

You seem like a person who could appreciate an FRBNY attempt at humor:

Important take-aways:

- Get your money out NOW....they will suspend withdrawls

- The haircuts will be steep

From ABCP to overnight'll seize like a 442 with no oil.


Sat, 07/16/2011 - 21:14 | 1462937 francis_sawyer
francis_sawyer's picture

We were actually "IN" austerity (based on article title)???

When did I blink & miss that?

Sat, 07/16/2011 - 21:25 | 1462944 NuckingFuts
NuckingFuts's picture

Obivously you are not eating your peas!  If you don't eat your peas you can't have any pudding.  How can you have your pudding if you don't eat your peas?

Sat, 07/16/2011 - 21:28 | 1462950 snowball777
snowball777's picture

You can have a lolly pop 
a candy bar a jelly bean.
I'll buy you a rainbow 
to hang above your door.
It's pudding time.
Laughter is a sweet
You can't put a price on.
When laughter's all gone
Daddy won't buy you more.
It's pudding time.
It's pudding time children.
Money money money
To buy you things.
Daddy's gonna buy you a 
diamond ring.

Humpty Dumpty sat on a wall
Humpty Dumpty had a great fall
All the kings horses and all the kings men
Couldn't put Humpty together again.

San Francisco bay the
Striped bass are dying.
But you're gonna get 
That brand new bike
Oh joy
It's pudding time
It's pudding time children.

Sat, 07/16/2011 - 22:56 | 1463064 kito
kito's picture

This is the end 
Beautiful friend 
This is the end 
My only friend, the end 

Of our elaborate plans, the end 
Of everything that stands, the end 
No safety or surprise, the end 
I'll never look into your eyes...again 

Can you picture what will be 
So limitless and free 
Desperately in need...of some...stranger's hand 
In a...desperate land 

Lost in a Roman...wilderness of pain 
And all the children are insane 
All the children are insane 
Waiting for the summer rain, yeah 

There's danger on the edge of town 
Ride the King's highway, baby 
Weird scenes inside the gold mine 
Ride the highway west, baby 

Ride the snake, ride the snake 
To the lake, the ancient lake, baby 
The snake is long, seven miles 
Ride the snake...he's old, and his skin is cold 

The west is the best 
The west is the best 
Get here, and we'll do the rest 

The blue bus is callin' us 
The blue bus is callin' us 
Driver, where you taken' us 

The killer awoke before dawn, he put his boots on 
He took a face from the ancient gallery 
And he walked on down the hall 
He went into the room where his sister lived, and...then he 
Paid a visit to his brother, and then he 
He walked on down the hall, and 
And he came to a door...and he looked inside 
Father, yes son, I want to kill you 
Mother...I want to...fuck you 

C'mon baby, take a chance with us 
C'mon baby, take a chance with us 
C'mon baby, take a chance with us 
And meet me at the back of the blue bus 
Doin' a blue rock 
On a blue bus 
Doin' a blue rock 
C'mon, yeah 

Kill, kill, kill, kill, kill, kill 

This is the end 
Beautiful friend 
This is the end 
My only friend, the end 

It hurts to set you free 
But you'll never follow me 
The end of laughter and soft lies 
The end of nights we tried to die 

This is the end

Sun, 07/17/2011 - 03:09 | 1463290 baby_BLYTHE
baby_BLYTHE's picture

I already know I will get junked, but honestly, this is where it is at:

Sun, 07/17/2011 - 08:33 | 1463362 snowball777
snowball777's picture

Hair bands make me laugh. Enjoy your "Summer Slaughter"...

Sun, 07/17/2011 - 09:41 | 1463420 dogbreath
dogbreath's picture

I'm not going to junk you but as i have told you before,  that stuff is noise.

Sat, 07/16/2011 - 21:26 | 1462945 wsmith
wsmith's picture

Let me tell you motherfuckers something.

I'm a complete CNBC addict.  I live in Asia, so I don't get Squawk Box till 7 p.m. at night.

I enjoy watching Becky, Joe, and the little fag Englishman.  I forget his name.

I like the hot Chinese girl who hosts fast money.

I often get drunk and call Steve Lisman a cunt.

Is it a healthy life?  Probably not.

But it sure is enjoyable.

There's no CNBC today.  So instead I'm watching FOX News.

What a drag.

Anyway, so long for now.

And fuck Steve Lisman.  The man's a cunt!

Sat, 07/16/2011 - 21:35 | 1462958 francis_sawyer
francis_sawyer's picture

While everyone is visiting your link... here's one for your viewing pleasure...


Sun, 07/17/2011 - 11:13 | 1463511 Roger O. Thornhill
Roger O. Thornhill's picture

Thank you for that link - that video put it all in perspective for me!


My favorite quote for the new millenium:

"You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!"

-Colonel George Taylor

Sun, 07/17/2011 - 00:55 | 1463199 Animal Cracker
Animal Cracker's picture

I shouldn't have enjoyed this post.

But I did.  


Sat, 07/16/2011 - 21:28 | 1462949 russwinter
russwinter's picture

Fiscal Suicide, Point of no Return

Sat, 07/16/2011 - 21:36 | 1462959 JW n FL
JW n FL's picture








And ALL the grownups know that the first year of anyone Presidency is still the last administrations Budget.











But wait! That’s not true! We have been running continuing debt resolutions! For how many hundreds of days?

So, really the democrats took over, in full! With a majority in the House and Senate! On? And still could not get one budget off?

Barack H. Obama

George W. Bush


It is fucking complicated?? Why do they make it so hard to figure out who is doing what? Who’s on first?


Because they want people confused! Gridlock! Is Good! Politics Rule the Consumer Sheep with Smoke Screens! ALL THE WHILE THEY POCKET BILLIONS IN LOBBY DOLLARS! $5 Billion PLUS! on the Healthcare Initiative ALONE!


Bush started with..






And ended with..







Numbers are fun!

Sun, 07/17/2011 - 00:04 | 1463152 TexasAggie
TexasAggie's picture

Your numbers are nice; however, your analysis is somewhat erroneous. Yes, the President proposes but Congress actually passes the final budget (Congress disposes). In 2001, when President Bush took office, the House and Senate were Republican, although 9/11 was almost at the end of the FY01 fiscal year, and the budget deficeit went from 5,706,174, 969,873 to your figure for 1/31/2002 of 5,937,228,743,476 (A difference of $231B and this included the start of the WOT and attack in Afghanistan.  In Nov 2006, the Democrats won control of the House and Senate and actually expanded the gains in 2008 to where the Senate was filibuster proof for almost 6 months.  Since the democrats rewrote President Bush's 2008 budget to reflect their priorities, and in Feb 2009, BHO also signed his Stimulus into law, so at least almost $1T should be attributed to BHO.

So Bush's actual deficiet should be approx 9,188,640,287,930.

Therefore, BHO's has increased the deficiet by almost 4.5T in 2.5 yrs vs Pres Bush'e 3.4T over 8 yrs.

Sun, 07/17/2011 - 10:05 | 1463441 JW n FL
JW n FL's picture

it figures some fucking queer from texass would show up to suck on the dick of lil bush..


like i said above, mr. swing on lil bush's dick.. it is all a smoke screen of confusion.. what is reported by the corporate owned cable news verse who really did what.


try reading the whole 4 sentences next time before defending your boy friends honor! how does bush ass taste? is it yummy in your tummy?

Sat, 07/16/2011 - 21:42 | 1462965 essence
essence's picture

When will the 'crash'/'reset' happen?
That's the question on everyones mind. Regardless of when, we can be assured of how the U.S.   .gov will address it.

Jackboots on the throat of its citizens and ALL who get in the way.
The 'way' being anything that stands between continuity of power & control for those having it.

As Rahm so pithy stated ... "never waste a crisis".
The reset will be the excuse for the U.S. police state to assert itself in force.

Implications being:

1) PM holders ... expect the gloves to come off as .gov makes war on you

2) S.S. & Medicare/Medicaid beneficiaries  ... expect cuts to the bone.

3) All .... expect 1984 like conditions as martial law gets implemented.

4) Foreign powers ... this could be the needed excuse to take you out.

5) Investors, expect a rewrite or waiver of whatever law/regulation necessary to protect the status quo. That's a big one. The gov will do ANYTHING to stay in power.
If it necessitates redefining black as white  then so be it.
Safe investments are likey to be ones that serve the oligarchy. Note that I don't condone this nor am I an advocate of embracing it ... but ignore it at your peril.

The U.S. government has run amuck, like some Frankenstein let loose from the lab.
An unholy trinity between the Banksters/Military Industrial Complex/Politicians.

Corporate bought goverment, a private cartel owned Central Bank with the power to conjure 'money' and a unaccountable war industry are leading the charge over the cliff.

Our situation is similar as to when frontline forest fighters dig a pit and bury them themselves as an out-of-control wind driven fire races over them. Yes it will likely burn itself out before long, unfortunately it will ravage those exposed in its path.

The U.S. government shows NO sign of heading off fiscal armageddon.
Protect yourselves.



Sat, 07/16/2011 - 21:57 | 1462984 JW n FL
JW n FL's picture

But think of ALL the tree's that will be saved when they stop printing ALL that PAPER!!


Forced Austerity is Good for the Environment!

Sun, 07/17/2011 - 09:31 | 1463410 FEDbuster
FEDbuster's picture

Think of all the "wealth and debt" wiped out when the electrical grid shuts down! "Lights Out" or "One Second After" both books are good reads.

Sun, 07/17/2011 - 10:12 | 1463445 JW n FL
JW n FL's picture

I saw on the news this morning.. or meet the nation maybe.. that 59% of Americans are for the debt ceiling not to be raised..


I guess they did NOT! ask the question these way(s)!


Are you for not raising the debt ceiling and the government not having the money to send you, your social security check?

Are you for not raising the debt ceiling and the government not having the money to send you, your en-employment check?

Are you for not raising the debt ceiling and the government not having the money to put money into your food stamp account? (Thank God for JP Morgan)

Are you for not raising the debt ceiling and the government not having the money to send you, your _____________ insert whatever Government assistance here.


59% of Americans receive Government Assistance. That is a LOT of Armed Hungry Pissed Off People!


and what about the old people who need oxygen or insulin? or something like that? the people who worked 60 hour work weeks for 30 - 40 fucking years? in the salt mines... steel mill's? it is just fuck those people who built the country? or maybe I am older and all those people are dead and its just the hippy stoner crowd who let these fucks rob the country blind while smoking their weed all day long playing the bongos?

Sun, 07/17/2011 - 10:18 | 1463447 JW n FL
JW n FL's picture

Ignorance is Bliss!

Stupidity is Heaven!!


Only after Wall Street has collected TRILLIONS of Dollars (that they have done nothing but give themselves bonuses with). NOW is the time for “We the People” to implement Forced Austerity on themselves! LULZ!! Don’t raise the debt ceiling!! Its what’s good for America!

Sun, 07/17/2011 - 10:22 | 1463449 JW n FL
JW n FL's picture

one way or another..


"We the Sheepeople" will be Fucked! Over!!


Becuase the Populace is sooooooo fucking stuuuuuuupidddddd, it looks like they will be fucking themselves over! only after Wall Street got paid Trillions @ .25% interest.. instead of the TARP 8% - 10%? it lasted for 1/2 a second before they flipped the debt into the FED Window for nothing and paid America Back! LULZ!

Sun, 07/17/2011 - 00:24 | 1463177 InvalidID
InvalidID's picture

Short of living in a hole while we wait for the fire to burn itself out, how would you propose people protect themselves?

Sun, 07/17/2011 - 02:06 | 1463249 BigDuke6
BigDuke6's picture

Another insightful post essence.

At least you have the rock of the constitution to be used to create some emotion and fight?!?  We'll see.

i think it will happen slow - that way people look back like we do now and say.... haven't things just got totally shit in the last 15 years.

Sun, 07/17/2011 - 09:38 | 1463417 DaveyJones
DaveyJones's picture

a fightful emotion now lets hope for the emotional fight

Sun, 07/17/2011 - 09:46 | 1463426 subqtaneous
subqtaneous's picture

the essence of the obvious.

Sun, 07/17/2011 - 10:47 | 1463470 i-dog
i-dog's picture

Excellent post. I've been meaning to address this for a while, too. Those who think it will come down slow and easy, while they continue to watch the next few seasons of 'Danzig mit die Starz' and 'Americans Idle', are in for a huge shock!!

I actually think you have painted a rosier picture than I would!

  • There will be no Mad Max (they have been planning and war-gaming this for decades; they are very well prepared and already have a massive internal security complex being rolled out). The Stasi would be jealous!
  • The Revolution will not be televised (the MSM will be too busy airing anti-terrorist propaganda, government directives and feel-good stories of the happy children being fed in Camp FEMA).
  • They do not care who starves, or dies of bio-engineered viruses (they have been warning over and over and over again that they want to reduce the population).

1. Local and state police have already been co-opted by the Feds and are being armed and trained for repressing dissidents. They'll probably shuffle them around the control zones so that each county will be controlled by out-of-county cops (plus mercenaries, national guards and Iraq-Afghan-Libya-Syria vets in sweeper teams ... with a hummer and a drone to deal with the better-armed hold-outs). Illegal immigrants will provide many extra hands, and no local sensitivities, at low cost (some food vouchers should do it!), to supplement the pros.

2. DHS will pull no punches when it comes time to lock down all travel and movement. Curfews, TSA gropes and firearm confiscation will be their first order of business. As they did to disarm Australia, guns will be exchangeable for vouchers (for food or fiat IOUs) during a short 'amnesty' period. The guns'n'beans Rambos who are armed to the teeth and holed up with their families will be under a great deal of pressure from wives, kids, parents and neighbours to "give it up and don't cause trouble...think of the children!!"

3. Supermarket shelves country-wide will be emptied in just a matter of the first few days.

4. Banks will be closed and the ATM network will be down. Safe deposit boxes will be off-limits. A government-issued swipe card will be the only authorised means of payment for authorised purchases at authorised locations. The card will be topped up only if you are fully compliant with all the new regulations.

5. PMs will be banned and/or confiscated. Barter will be banned. (The czars can pass any regulations they like...98% of the population will automatically comply with them and discourage the other 2% from not complying).

6. Obomber will declare a state of emergency and institute the Council of Ten Governors to take over from the 50 State governments. State lines will disappear into just 10 control zones. They'll work with FEMA to organise free holidays at the many Camp FEMAs that have already been set up in the 10 planned national control zones -- for work to be assigned in exchange for food and paying down bank debt. That's for the lucky ones who are fit enough to work!!

7. 'Security' cameras at every intersection of every city and town will be monitored by tens of thousands of contract spies for the first signs of trouble/resistance.

8. Every airport and border crossing will have, by then, x-ray scanners and a team of junk jugglers to ensure that no valuables leave the country. US citizens may also be prevented altogether from leaving (à la Eastern Europe of the 1970's).

9. The NSA dossiers on everyone (via Facebook, Twitter, Google, ISP logs, and a dozen other sources of your thoughts and level of preparedness) will simplify tracking down "trouble makers" and "terrorists". Idiots carrying smart phones will be located in seconds. Even having only viewed a site like ZH or Infowars will mark you down as a "suspected terrorist", so don't worry about what you say here -- I certainly don't.

This time is not going to be anything like the Great Depression -- when there were millions of small farmers, a self-sufficient and adaptive population with strong community awareness, many organised charities, a government that was working to create solutions, and limited technology (or need) for governemt control or tracking of individuals or groups.

Now, just a few big agra firms (with loyalties to TPTB) control most of the food supply; just a few major chains (with loyalties to TPTB) supply the diets of hundreds of millions of bloated, prescription drug-fucked, entitlement zombies; the water supplies are already spiked with fluoride...god knows what else they will add; and, with no gas available at the pumps, most Murkins will have no ability to waddle anywhere anyway.

We really do need to actively stop them before it's too late!

End the Feds!! (Federal Reserve &
End the European 'Experiment'!! (EU & EUR)
De-fund the IMF!!

Sun, 07/17/2011 - 13:48 | 1463966 snowball777
snowball777's picture

So...they're incompetent clowns who can't plan an economy better than a CEO, but can plan that far ahead while keeping it a secret? "Tens of thousands of contract spies"...paid with?!


Y'all have seriously lost your damn minds...or is that just the MK Ultra and HAARP talking?


Sun, 07/17/2011 - 14:53 | 1464125 i-dog
i-dog's picture

You really are as dumb as a doorpost if you seriously think they have been trying to fix or improve the economy! Even your central planning buddies couldn't "accidentally" drive this economy so completely into the ditch through "incompetence".'s no secret what has been planned, either. They hide it all in plain sight, you Marxist troll.

Sat, 07/16/2011 - 21:47 | 1462971 RobotTrader
RobotTrader's picture

I just don't see any debt ceiling or funding problems as long as everyone and their brother are still scared of stocks and instead continue to flee into Treasuries driving yields down to absurdly low levels.

Sat, 07/16/2011 - 22:02 | 1462988 JW n FL
JW n FL's picture

No.. No.

ALL those Trillions sitting on the sidelines on WALL STREET! are much safer sitting doing nothing but being printed away by the Ben-O-Cide!!


The Trillions sitting on the sidelines have lost 20% of the purchasing power from January 1st of this year alone.. should we factor in that they have were sitting last year as well? and thusly have taken a 50% valuation hit from printing in the last 2 years.. NAAAAAAAA! lets just mention the 20% from this January.. that alone is bad enough news!


Who says the Smart Money is NOT on Wall Street?

Sun, 07/17/2011 - 02:12 | 1463247 Vic Vinegar
Vic Vinegar's picture


What do you do at the end of the day!  Tyler gives you a lot of information!

Sun, 07/17/2011 - 10:26 | 1463452 JW n FL
JW n FL's picture


Do NOT follow this link or you will be banned from the site!