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The Debt Ceiling Farce Is Ending... Or Is It?

Tyler Durden's picture


It may be time to rebrand Congress as the new CTU, although when it comes to who in D.C. should play agent Jack Bauer we are still unsure. The reason is that this morning we get two diametrically opposing fictions about the latest reality on the debt ceiling. On the one hand we read in the LA Times that, "Republican leaders in the House have begun to prepare their troops for politically painful votes to raise the nation's debt limit, offering warnings and concessions to move the hard-line majority toward a compromise that would avert a federal default. For weeks, GOP conservatives, particularly in the House, have issued demands about what they would require in exchange for their votes to increase the debt limit... Unwilling to risk the economic and political consequences of a federal default, which could come as early as Aug. 2, they have started the difficult process of standing down."

That, however is not what The Hill heard: "House Republican leaders have missed a 36-hour deadline President Obama set during a Thursday meeting for lawmakers to give him a plan to avert a national default. The deadline came and went Saturday morning without a response from House Speaker John Boehner (R-Ohio). Instead, Boehner and House Majority Leader Eric Cantor (R-Va.) plan to move the Cut, Cap and Balance Act on the floor next week, which would require passage of a balanced budget amendment to the Constitution before the debt limit is raised. A House GOP leadership aide said at noontime Saturday that Boehner and Cantor did not send Obama a revised proposal to raise the debt-limit, as the president requested." So which is it? And has M. Night Shyamalan been retained to write the surprise twist ending to this nail-biter? We doubt it. Unfortunately, we are still convinced the republicans, under the "wise" defection of Mitch McConnell will fold, Obama will get what he wants, and the republican tough stance will go up in a puff of smoke leading to an even great loss of credibility for the GOP. There is less than 168 hours in which we can be proven wrong. We hope we are, but we doubt it.

Version one of events from the LA Times, in which yet another movie, Star Wars, is invoked:

At a closed-door meeting Friday morning, GOP leaders turned to their most trusted budget expert, Rep. Paul D. Ryan of Wisconsin, to explain to rank-and-file members what many others have come to understand: A fiscal meltdown could occur if Congress fails to raise the debt ceiling.

House Speaker John A. Boehner of Ohio underscored the point to dispel the notion that failure to allow more borrowing is an option.

"He said if we pass Aug. 2, it would be like 'Star Wars,'" said Rep. Scott DesJarlais, a freshman from Tennessee. "I don't think the people who are railing against raising the debt ceiling fully understand that."

The warnings appeared to have softened the views of at least some House members who, until now, were inclined to dismiss statements by administration officials, business leaders and outside economists that the economic impact would be dire if the federal government were suddenly unable to pay its bills.

Freshman Rep. Steve Womack (R-Ark.) said the presentation about skyrocketing interest rates that could result from downgraded bond ratings was "sobering."

"It illustrates to us that doing nothing is unacceptable," he said. "I think the conference understands this is a defining moment for us. It's time to put the next election aside."

Granted the LA Times does realize this spin of events is missing one key thing: the fact that conservatives will scream bloody murder at being betrayed by their own party:

At the same time, Republican leaders orchestrated a series of public moves intended to soften the blow for conservatives. They agreed to give the House an opportunity to vote on two top conservative priorities: a so-called cut-cap-and-balance bill, which would order $111 billion in cuts in federal programs for 2012 and impose a cap on future spending, and a constitutional amendment that would require a balanced federal budget.

The Democratic leadership in the Senate is also expected to allow votes on one, and perhaps both, measures. Neither is expected to become law — the constitutional amendment would require a two-thirds vote in both chambers — but the chance to vote could appeal to the "tea party" conservatives in the House, who are most skeptical of any deal with the White House to raise the debt limit.

"We're in the fourth quarter here," Boehner said. "Let's get through that vote, and we'll make decisions about what will come after."

As for the "other side", here is The Hill:

At a meeting late Thursday afternoon, Obama gave congressional leaders 24 to 36 hours to meet with their colleagues to figure out a plan that could pass both chambers.

“It’s decision time,” Obama said.

Ignoring Obama’s directive, Republican leaders are coalescing around the Cut, Cap and Balance bill that is expected to pass the House but has virtually no chance in the Democrat-controlled Senate.

Senate Republican Leader Mitch McConnell (R-Ky.) is pushing Senate Majority Leader Harry Reid (D-Nev.) to schedule votes on the Cut, Cap and Balance bill and a balanced budget amendment in the upper chamber next week.

A Senate Democratic aide said it’s likely that at least one of those Republican priorities will receive floor time next week because it would clear the way for passage of a last-ditch contingency plan later this month.

The contingency plan, proposed by McConnell, has become more politically viable as negotiations between Obama and congressional leaders have broken down.

We stand by our prediction that there will be no budget cuts (and $1 trillion over the next decade amounts to less than $100 billion per year: this is less than 8% of the total amount of debt issued each year by Time Geithner: i.e., a farce, and a precondition to a downgrade by S&P, of course, until they too are shut down by the latest and greatest bribe out of wherever). There will also beno tax hikes, and the US Titanic will continue on its merry way to the iceberg without a change in course, even as the two-party scam in DC congratulates itself for a "grand compromise" well done.

Next up: total US debt/GDP at 120% in under a year, with a primary deficit at 10% of GDP, i.e. far, far worse than Italy.


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Sat, 07/16/2011 - 14:19 | 1462193 gorillaonyourback
gorillaonyourback's picture

LMAO   extend and pretend

Sat, 07/16/2011 - 14:42 | 1462245 eureka
eureka's picture

Are you saying TeaPartiers Won't Risk US EMpire By Denying To Raise DEBT CEILING...?

Sat, 07/16/2011 - 15:01 | 1462279 AnAnonymous
AnAnonymous's picture

Teabaggers are doing what they do the best: teabagging.

Sat, 07/16/2011 - 15:13 | 1462304 WestVillageIdiot
WestVillageIdiot's picture

You might not be a teabagger but you sure are a partisan cunt.  And I bet you have done your share of teabagging at the local frat house. 

Sat, 07/16/2011 - 15:22 | 1462335 AnAnonymous
AnAnonymous's picture

Speaking of frats, have people noticed how frats run the same initiation rituals as gangs?

Tells about the socialistic US mindset.

Sat, 07/16/2011 - 16:17 | 1462393 Bay of Pigs
Bay of Pigs's picture

And what Utopian Paradise do you hail from?

Sat, 07/16/2011 - 17:37 | 1462566 narapoiddyslexia
narapoiddyslexia's picture

How about a Million Gun March On Washington? Eh?

Always polite. Always legal. No one points a weapon except in self-defense.

Veteran's Day, 2011.

When we get there, we play it by ear.

And carry 21 day's provisions.

Sat, 07/16/2011 - 22:43 | 1463047 Things that go bump
Things that go bump's picture

Please see the Veterans' March on Washington for the script to that play.

Sun, 07/17/2011 - 00:00 | 1463147 gall batter
gall batter's picture

forget the provisions.  you'll be droned in a flash.  

Sun, 07/17/2011 - 11:31 | 1463558 grunion
grunion's picture

People who live in glass houses....

Sat, 07/16/2011 - 16:21 | 1462436 snowball777
snowball777's picture

What kind of ignorant dumbass thinks that the fratboys (Dubya, Boehner, Cantor...) are socialists?! Socialism for corporations perhaps.

Sat, 07/16/2011 - 18:59 | 1462756 Captain Planet
Captain Planet's picture

what other kind of socialism have we had?

oh right, the USSR. wait....

Sat, 07/16/2011 - 19:09 | 1462797 snowball777
snowball777's picture

The Otto von Bismarch kind. The Tito kind. The English kind (NIH). The Scandinavian kind.


Sun, 07/17/2011 - 00:22 | 1463171 i-dog
i-dog's picture

You really haven't a clue! Next you'll tell us that you aren't a socialist!! ROFL

Sun, 07/17/2011 - 08:13 | 1463356 snowball777
snowball777's picture

Sure I'm a socialist. I went to an elementary school on an airforce base paid for by taxpayers so I must be a least to pond-scum like you who think that everyone is a socialist.

Now go watch your Glenn Beck and collect your UE check like a good dog.

Sun, 07/17/2011 - 10:52 | 1463480 JW n FL
JW n FL's picture

have you noticed that he never takes a position? he has nothing he stands for and only adds one line of bullshit so that you end up wasting your time engaging him instead of educating or helping others?


He is a plant, paid or not.. he is here to disrupt the flow of sourced and sited information.


just a heads up brother.. do what you will with him.. just wash your hands when you are done playing with it. I wouldn't want you to get sick, catch something from handling it.

Sun, 07/17/2011 - 11:42 | 1463594 grunion
grunion's picture

It always saddens me when I read something like snowbal777 writes. It serves to remind me of the declining prevelance of civility in the US.

I suspect it contributes to the decline of our culture as well. At least the culture of being polite, aiding your neighbor, having a reasonably positive regard for your fellow man, productivity.

Today we have a culture of isolation, suspicion, blame and hate.

We're not gonna make it.

Sun, 07/17/2011 - 12:10 | 1463688 snowball777
snowball777's picture

My fellow man could meet me in the middle on that (or at least keep the false aspersions to himself, were he able).

In a sense, I'm a mirror...stick around; you'll see how I interact with people that are capable of civility like JW, ORI, Flak, and even some of the cons like NMewn and DochenRollingBearing.

Should I "take the high-road" when it comes to ignorant poo-flingers like i-dog and sun tzu? Perhaps, but it's a blog not an ice-cream social.

Sun, 07/17/2011 - 12:24 | 1463734 blunderdog
blunderdog's picture

Misconceptions about one's own behavior abound.  I'm sure you're doing your best.

Sun, 07/17/2011 - 16:15 | 1464370 JW n FL
JW n FL's picture

I have a life long afinity for Blue Russians.. that aside if you take issue with SnowBalls delivery I can only assume you must think me the devil himself! LULZ!!

Sat, 07/16/2011 - 16:36 | 1462459 toady
toady's picture

I didn't know they 'jumped' people into frats...

You must kill someone to get into a frat?

I think I'll remain unaffiliated...

Sat, 07/16/2011 - 16:42 | 1462466 Michael
Michael's picture

65 incumbent congress critters thrown out of DC and replaced in 2008.

93 incumbent congress critters thrown out of DC and replaced in 2010.

"It shows there is strength in numbers. Of those 93 newly elected House members, more than a third consider themselves a member of the tea party, eager to push both parties to cut spending.

"We've got some big issues to work on here in Washington, D.C., and the American people are not patient," said Representative-elect Allen West, R-Fla.

On Monday, the huge new freshman class took a crash course on how Congress works.

Thirty four of them have never held elected office before. Seven of them are doctors, seven are farmers and 32 of them own small businesses. Just nine of the 93 are Democrats.

"We're calling ourselves the mighty nine," said Representative-elect Karen Bass, D.-Calif."

How many bums to throw out in 2012? How many? 365 or more?

How many incumbents were tossed out in state legislatures last November? 535?

Sat, 07/16/2011 - 18:23 | 1462643 snowball777
snowball777's picture

Bang up job placing the 12 that proposed HR2411 in office.

What'll you do for your next trick, twinkies?

Sat, 07/16/2011 - 22:54 | 1463061 FEDbuster
FEDbuster's picture

Once the iceberg was hit, it didn't matter who was the captain and crew of the Titanic.  We hit the iceberg in 2008, now it's just a question of when the ship goes under.  Time to get your lifeboat ready. 

Beans, bullets, band-aids and bullion, start to think of a simple diversified survival strategy. is a good place to start or check out AnalyticalSurvival on youtube:


Sat, 07/16/2011 - 23:02 | 1463075 Michael
Michael's picture

It'll be a shame telling hundreds of thousands of military personnel their services are no longer required as Uncle Sam is bankrupt and he doesn't have the money to pay them anymore.

Sat, 07/16/2011 - 23:33 | 1463109 FEDbuster
FEDbuster's picture

Isn't it something that defense of the Country is one of the only things these idiots in D.C. are supposed to do for us, but they may even screw that up, too. 

The guy who does AnalyticalSurvival is ex-special forces with lots of medical knowledge.  He has produced some very good videos on all aspects of survival.   His preps and organization are something to aspire to.

Sat, 07/16/2011 - 23:55 | 1463141 AldousHuxley
AldousHuxley's picture

military = government job. subsidy for military industrial complex. Cut them off. Pentagon is full of paper pushers. If prostitution is world's oldest profession, then military jobs are world's oldest government jobs.


When your country is attacked, you don't need salary + government pension to bribe people into military.

Also uncle sam is bankrupted BECAUSE of military advantures.


Sun, 07/17/2011 - 11:07 | 1463502 JW n FL
JW n FL's picture

I do like almost everything you say.. but I have to say that..


Uncle Sam is Broke.. because..

Uncle Sam Taxed the shit out of the middle..

Uncle Sam gave Tax Breaks and Subsidies to his Corporate Lobby Dollar Wielding Friends..

Who moved 6 Million Manufacturing Jobs to China over the last 10 years..

and those Corporations were paid by the "We the People's" Tax dollars to undermine / gut America's Manufacturing and Tax Base.


We could have kept going to war.. except we gave away our tax base.. one better! We PAID Corporations to Undermine Our Tax Base and Our Manufacturing Base!


The Lobby Whores! were paid Lobby Dollars! to Provide Tax Breaks and Subsidies! to DESTROY! America's Manufacturing Base.. which as well undermined America's Tax Base!


50,000 Manufacturing Jobs a MONTH! were shipped Off Shore! for Tax Breaks and Subsidies that "We the People" paid for!


Government Paid Corporations "We the People's" Tax Dollars.. to DESTROY America's Manufacturing Sector and Tax Base that those jobs equated too.


what is 6 million people paying taxes worth.. not the top 1% who pay NOTHING! but the middle manufacturing jobs.. $50k to $100k average for the last decade?


25%? on $100k ='s $25k X's 6m ='s $1,500,000,000,000


That is nothing to sneeze at.


Now multiple that $1.5 Trillion times 10 years.. we are down $1.5 Trillion in Tax Revenue per year! for those Manufacturing Jobs..

and over ten years (its really 11 years now, so even more) it would be $15 Trillion..

So the same amount of money we paid to move off shore is what we as a Country owe..



Sun, 07/17/2011 - 11:11 | 1463507 JW n FL
JW n FL's picture

***** “Over the last ten years, China has mounted the biggest challenge to the U.S. manufacturing sector ever seen, threatening producers of steel, chemicals, glass, paper, drugs and any number of other items with prices they cannot match. Not coincidentally, the United States has lost an average of 50,000 manufacturing jobs every month during the same period.” *****


That is the 50,000 jobs a month.. equaling 6m jobs +++ becuae it has been 11 years now!!

Top U.S. Lobbying Banks Got Biggest Bailouts


1.    [PDF]

A Fistful of Dollars:Lobbying and the Financial Crisis; Financial ...

File Format: PDF/Adobe Acrobat - View as HTML
A Fistful of Dollars: Lobbying and the Financial Crisis by. Deniz Igan ...


that is the lobby dollars! what else do you need to see? to wake the fuck up? let me know! and I will make it dumb enough for you to understand!


Sun, 07/17/2011 - 17:16 | 1464563 FEDbuster
FEDbuster's picture

Sir James Goldsmith saw this coming 20 years ago when that fucktard Clinton was doing NAFTA and GATT.  The cunt in the interview who shilled for Clinton is now an economic advisor to Obama.  The globalists got everything they wanted 1% super rich, 9% middle class administrators and 90% lower middle class or poverty.  The US was sold out and dragged down to a Mexican like existence (including the possibility of bankruptcy and default).  The whole interview and debate is worth watching:


Sun, 07/17/2011 - 00:43 | 1463188 G-R-U-N-T
G-R-U-N-T's picture

"Teabaggers are doing what they do the best: teabagging."


Sun, 07/17/2011 - 12:54 | 1463810 G-R-U-N-T
G-R-U-N-T's picture

"I'm a "teabagger"...just not in the political sense."

Nor am I...Just stressing a hypocritical point.

Sun, 07/17/2011 - 08:30 | 1463363 Scroto Gaggins
Scroto Gaggins's picture

I'm a "teabagger"...just not in the political sense. 

Sat, 07/16/2011 - 16:05 | 1462405 chet
chet's picture

"There is less than 168 hours in which we can be proven wrong. We hope we are, but we doubt it."

So ZH wants default?  Time to clarify what exactly you're angling for, Tyler.

Since libertarians are generally politically illiterate, here is all the analysis you need about which side will eventually cave and who's fault that is.  From Republican Lindsey Graham:

"Our problem is we made a big deal about this for three months," said Graham of the debt limit debate.  "How many Republicans have been on TV saying, 'I'm not going to raise the debt limit'? You know, Mitch [McConnell] says, 'I'm not going to raise the debt limit unless we talk about Medicare.' And I've said I'm not going to raise the debt limit until we do something about spending and entitlements.'"

Graham says now Republicans should have tempered their language early on.


"We shouldn't have said that if we didn't mean it... We've got nobody to blame but ourselves," Graham told reporters.

Sat, 07/16/2011 - 16:33 | 1462453 macholatte
macholatte's picture

Lindsey Graham is a redshirt Progressive. Nice try.

Here are some real facts:

There has not been a terrorist attack in the United States since Jack Bauer first appeared on television.


Terrorists dread the day in October that Daylight Savings Time ends. Jack Bauer gets 25 hours in which to kill them.


Jack Bauer sleeps with a night light because the dark is afraid of Jack Bauer


Kryptonite is not really from Krypton. It is made from Jack Bauer's crap, that is why it can kill Superman.


The war in Iraq will end when Jack Bauer vacations there.


Jack Bauer doesn't just piss excellence, he also shits gold. Bauer can single handedly end the recession.


As a boy, Jack Bauer interrogated his parents on Easter until they revealed the location and contents of each hidden egg.


Jack Bauer doesn't drink honey, he chews bees.


Jack Bauer named his cat 'Chuck Norris.' Why? Because he's a pussy.


Sat, 07/16/2011 - 17:37 | 1462567 Uncle Remus
Uncle Remus's picture

Jack Bauer named his cat 'Chuck Norris.' Why? Because he's a pussy.



Sat, 07/16/2011 - 20:29 | 1462871 Votewithabullet
Votewithabullet's picture

not in "71" . world class knock yer fuckin teeth out bad ass. all that jack bauer shit was funny. dunk shane.

Sat, 07/16/2011 - 18:33 | 1462679 blunderdog
blunderdog's picture

Redshirt Progressive?

Jeez.  I thought he was just another gay sailor. 

Sat, 07/16/2011 - 20:31 | 1462874 Votewithabullet
Votewithabullet's picture they come any other way?

Sat, 07/16/2011 - 16:51 | 1462481 kito
kito's picture

Chet what is your point?

Sat, 07/16/2011 - 17:20 | 1462532 Bay of Pigs
Bay of Pigs's picture

His point is to show that he is a partisan douchebag.

Sat, 07/16/2011 - 19:30 | 1462816 LowProfile
LowProfile's picture


Sun, 07/17/2011 - 14:34 | 1464094 gmrpeabody
gmrpeabody's picture


Sat, 07/16/2011 - 17:25 | 1462543 Ricky Bobby
Ricky Bobby's picture

Those illiterate libertarians, so quaint, they still want to believe in the Bill of Rights. Oh how the world has moved on from those evil White men.

Sat, 07/16/2011 - 18:22 | 1462640 snowball777
snowball777's picture

Let's just say they tend to be more keen on some amendments than others and leave it at that.

Sat, 07/16/2011 - 22:35 | 1463039 CompassionateFascist
CompassionateFascist's picture

Yeah...Repubes had both houses of Congress + PreZ, March '01 thru March '07. Where wuz all thus Fiscal Responsibility conservocrap than? They spent debt like drunken whores. Now, if Zero hangs tough, offers nada, and Repubes OK debt ceiling hike, that's it for the Repub Pty: splits along right/left lines. And good riddance to the StupidEvilGoyParty. next: get rid of the SmartEvilJewParty, and we're cookin'.  

Sat, 07/16/2011 - 21:36 | 1462960 Stares straight...
Stares straight ahead's picture

I live in SC and unfortunately, Graham is my She-senator.  We always try to do the opposite of what Graham says.  It is tradition.

Sat, 07/16/2011 - 15:08 | 1462293 lolmao500
lolmao500's picture

Geopolitical risk on?

Israel will probably attack Iran in September, a veteran CIA officer who spent 21 years in the Middle East, including in Lebanon and Syria, told a Los Angeles radio show on Tuesday.

Sat, 07/16/2011 - 15:12 | 1462298 cosmictrainwreck
cosmictrainwreck's picture

"they" said the same thing last year....just about this time, forcasting Aug-Sept, in fact.... US Navy was building up "presence" and blah blah blah

Sat, 07/16/2011 - 15:14 | 1462308 WestVillageIdiot
WestVillageIdiot's picture

I think this is about year number 6 where an Israeli attack on Iran is imminent.  Something tells me the market might see it as bullish. 

Sat, 07/16/2011 - 22:09 | 1462999 Crisismode
Crisismode's picture

The Israelis are pussys.

Sat, 07/16/2011 - 15:26 | 1462343 dick cheneys ghost
dick cheneys ghost's picture

Events in the Arab world this past spring, IMO, have changed everything....The War Department budget has not been cut for a reason........could it be Iran? 

Sat, 07/16/2011 - 15:46 | 1462382 toady
toady's picture

Bomb, bomb, bomb, bomb, bomb Iran

Bomb, bomb, bomb, bomb, bomb Iran

Bomb, bomb, bomb, bomb, bomb Iran

Oh bomb Iran...

Everybody SING!

Sat, 07/16/2011 - 17:32 | 1462555 Ponzi Unit
Ponzi Unit's picture


Sat, 07/16/2011 - 20:35 | 1462878 Votewithabullet
Votewithabullet's picture

4000 year old senator quoting songs from god damn 1958.

Sat, 07/16/2011 - 16:23 | 1462440 snowball777
snowball777's picture

Shit or get off the pot...this fucking meme comes up at a minimum of once per year and yet we've seen nothing from those blowhards beyond Stuxnet.

Wolf! Wolf! Wolf!


Sat, 07/16/2011 - 14:19 | 1462195 Mongo
Mongo's picture

Laugh now... Cry later

Sat, 07/16/2011 - 14:21 | 1462196 idea_hamster
idea_hamster's picture

And has M. Night Shyamalan been retained to write the surprise twist ending to this nail-biter?

Perhaps --eventually, we will realize that no matter what happens in the next few weeks, the dollar, the Fed, the US credit rating, and our hopes for a recovery have been dead all along.

Sat, 07/16/2011 - 14:27 | 1462215 darkstar7646
darkstar7646's picture

This is what people don't get -- we WILL be downgraded, and there's no sense avoiding it any longer.

Sat, 07/16/2011 - 14:53 | 1462264 SWRichmond
SWRichmond's picture

And the ratings agencies, arguably part of the financial terrorist complex that runs the U.S., will blame the downgrade on hesitation to raise the debt limit.  "We must have more debt!"

Sat, 07/16/2011 - 15:16 | 1462311 WestVillageIdiot
WestVillageIdiot's picture

The fact that anybody anywhere still feels the U.S. government is AAA is ridiculous.  "But we've never defaulted."  How can inflation not be seen as default?  Nixon defaulted massively in 1971. 

Sat, 07/16/2011 - 16:34 | 1462456 duncecap rack
duncecap rack's picture

FDR defaulted in 1933 when he decided that bonds that were explicitly stated to be redeemable for gold would not be. Nixon closed the gold window when there was a run on it. Two cases where the US has given haircuts to those promised gold who were then forced to accept paper or nothing. The fiction that the US has never defaulted on it's obligations keeps getting repeated though.

Sat, 07/16/2011 - 21:49 | 1462974 Stares straight...
Stares straight ahead's picture


Sat, 07/16/2011 - 22:11 | 1463003 Crisismode
Crisismode's picture

The United States of America will give a haircut to every person making less than $1Million/year.


Sat, 07/16/2011 - 14:30 | 1462222 Quintus
Quintus's picture

I see dead Bankers.  Walking around like regular people. They don't see each other. They only see what they want to see. They don't know they're dead.... 

Sat, 07/16/2011 - 15:05 | 1462284 Oh regional Indian
Oh regional Indian's picture

Nuclear Zombie Bankers.
Uncertain, like heisenberg...
Werner that is.
Not Herzog. Though he too needs to be read.

Sat, 07/16/2011 - 14:21 | 1462197 Flakmeister
Flakmeister's picture

Me thinks Monday may be volatile in the PM markets... Stay sharp out there.

Sat, 07/16/2011 - 14:50 | 1462258 aces and eights
aces and eights's picture

Same here. I did find it interesting that this week's Christian Science Monitor cover story is on gold:


Sat, 07/16/2011 - 15:18 | 1462317 WestVillageIdiot
WestVillageIdiot's picture

As much as we think gold is becoming a bigger story I still no of nobody in my circle that has started buying in the past 3 years.  "It's too expensive", should be embroidered on pillow cases.

Sat, 07/16/2011 - 16:10 | 1462415 baby_BLYTHE
baby_BLYTHE's picture

Full Faith and Credit will appear on Hank Paulson, Tim Geither, Alan Greenspan and Ben Bernanke's tombstones.

Sat, 07/16/2011 - 16:21 | 1462437 Vic Vinegar
Vic Vinegar's picture

Are you going to spraypaint that on them?

Sat, 07/16/2011 - 20:40 | 1462888 NewThor
NewThor's picture

They will be buried in the ocean like Osama Bin Laden.


Sat, 07/16/2011 - 14:24 | 1462199 red2893
red2893's picture

complete hocus pocus in my opinion.  If one can decide this within 5 minutes, they should run the world.



Sat, 07/16/2011 - 15:18 | 1462319 cossack55
cossack55's picture

When do you want me to start?

Sat, 07/16/2011 - 14:24 | 1462200 km4
km4's picture

RT @RonPaul Our "Conviction" Ad will air in NV starting Monday. In case you haven't seen it, you can see it here:

Sat, 07/16/2011 - 15:38 | 1462366 rodocostarica
rodocostarica's picture

nice ad. Keep up the good work RP.

Thanks for posting it.


Sat, 07/16/2011 - 15:43 | 1462374 km4
km4's picture

you bet !

Sat, 07/16/2011 - 14:24 | 1462201 red2893
red2893's picture

this can't be true!  hahah

Sat, 07/16/2011 - 14:24 | 1462203 Bill Hicks
Bill Hicks's picture

This whole farce has been a case of sound and fury, signifying nothing.  Even better, we get to go through the whole thing all over again beginning in October when the FY-2012 budget battle gets underway.  Good times. 

Sat, 07/16/2011 - 16:04 | 1462402 Bay of Pigs
Bay of Pigs's picture

Not hearing much about the Rand Paul led filibluster lately. Did Mitch clip his wings?

The whole thing is pitiful and disgusting. Liars on both sides shooting their mouths off and solving absolutely nothing.

Sat, 07/16/2011 - 16:06 | 1462406 docj
docj's picture

Could be because it's not "solvable", really.

The blast has already happened, it's just that the shock wave hasn't hit us yet.

Sat, 07/16/2011 - 14:24 | 1462204 Abitdodgie
Abitdodgie's picture

who gives a fuck , really

Sat, 07/16/2011 - 14:32 | 1462226 idea_hamster
idea_hamster's picture

You should -- currency collapse is no joke, and a reserve currency crisis would be an issue much more broadly.

We all hear about the urban protests in Argentina in 2002, but not as much about what happened outside the cities:

Sat, 07/16/2011 - 14:45 | 1462250 sun tzu
sun tzu's picture

The currency will eventually collapse anyway. How much longer can we afford to run $1.5 trillion annual deficits? Our debt will be 200% of GDP by 2025. 

Sat, 07/16/2011 - 20:45 | 1462898 ParaZite
ParaZite's picture

I am going to laugh my ass off when Obama comes on the Tube August 3rd, and reads the teleprompter and exclaims... the Debt limit is now 1,000 goggloplex, deal with it... and the price of gold hits 200,000 an ounce and Silver hits 5,000 an ounce. Then he'll look in the teleprompter and smile, and say... I won't have to deal with raising the debt limit next term, I almost guarantee it!


Sat, 07/16/2011 - 15:07 | 1462285 Lednbrass
Lednbrass's picture

Interesting articles, but if we hit this point in the US the populations outside the cities are considerably more heavily armed and organized.  I dont see gang bangers who think a
Glock is a real weapon and cant shoot without hitting the wrong person a few blocks away  doing very well at all against people that have been shooting since elementary school and have a wide range of weapons.  People more and more know something bad is coming and are preparing accordingly. Most are ready I think, at least down in the south anyhow.

My nearest town has a population of under 3K and supports three gun shops, the 4 town county has six gun and who knows how many hunting clubs. Militias can be formed overnight (the cores and are already out there in reality). Probably 80 or 90% of male and at least 50% of females in my kids high school own their own rifle and know what to do with it. Good luck to the urbanites in that scenario, a few chokepoints on key roads and they will be slaughtered by people too far away for them to even see.

Weapon skill matters and the urbanites very rarely have it, the spray and pray gang chimps will go down hard and fast.  Tell people here they can shoot city folks and gang types coming into their area with no bag limit and it will be short and ugly.

Sat, 07/16/2011 - 15:21 | 1462331 cossack55
cossack55's picture

How much do you think the tax stamps for urban game will be?

Sat, 07/16/2011 - 17:34 | 1462557 Urban Redneck
Urban Redneck's picture

The economy sucks, they should cut the hunters a break.

In Virginia, it only takes the addition of one word to the regulations to make everything nice, legal, and politically correct: "urbanite". 

Nuisance Species
The following animals: urbanite, house mouse, Norway rat, black rat, coyote, groundhog, nutria, feral hog, European starling, English sparrow, mute swans, and pigeon (rock dove) are designated as nuisance species and may be taken at any time (except on Sunday) by use of a firearm or other weapon and on some public lands during certain time periods, see National Forest-Game Department Regulations.


It's not as if all the hunters go out of their way to exterminate nuisance species, they tend to take them only when they directly threaten life or property.  The twice on Sunday misprint isn’t that much of an issue since most people are in church and the Virginia AG wrote a blanket permission slip to clarify the law a while back.  Unlike the previous examples of social breakdown where houses of worship tended to turn into slaughter houses, the churches in Virginia do have a substantial ability to return fire.  Even before the AG’s legal opinion was published- it wasn’t like Hoppe’s #9 didn’t smell like the most popular after shave in the congregation.

Sat, 07/16/2011 - 15:25 | 1462340 pelican
pelican's picture

Wolverines! Milita vs Federal Specture Gunships? Seriously.

Sat, 07/16/2011 - 15:39 | 1462367 cossack55
cossack55's picture

You need to do some more reading on guerilla operations.

Sat, 07/16/2011 - 17:44 | 1462583 Uncle Remus
Uncle Remus's picture


Sat, 07/16/2011 - 15:45 | 1462375 Hapte
Hapte's picture

Lol, PTA mom's, good one. "Urbanites" (read nigs) are fucked!

Edit, glocks aren't "real" weapons? Bet I could kill you with a shank.

Sat, 07/16/2011 - 16:19 | 1462429 toady
toady's picture

You won't get close enough for either.

Sat, 07/16/2011 - 18:12 | 1462631 Hapte
Hapte's picture

Debatable. Sorry, but the gun dosn't make the man.

Sat, 07/16/2011 - 16:12 | 1462418 Tinfoil Hat
Tinfoil Hat's picture

True enough Led, I want to throttle people when I ask if they want to come to the gun range and they say "why would I ever need to know how to shoot a gun?".  I don't insist everyone has a stack of bullets under their pillow, but atleast know how to load and point one.

Sat, 07/16/2011 - 22:31 | 1463033 Peter_Griffin
Peter_Griffin's picture

It's not that hard; load clip, turn gun sideways, fire.  I've watched enough movies and played enough call of duty where I don't need no stinking practice.  If all else fails, I'll rent a room at the holiday inn express.

Sat, 07/16/2011 - 22:54 | 1463059 CompassionateFascist
CompassionateFascist's picture

My sentiments exactly. When the blacks' and mestizos' EBT cards no longer work, and they come swarming out of the cities looking for loot and rapine....there'll be plenty of targets to "practice" on. One bullet, one ethnoid. And we won't have to worry about the urban white CosmicLibs and the Chosen: blacks/mestizos won't come out to play until they've had them for breakfast.

Sat, 07/16/2011 - 16:21 | 1462435 decon
decon's picture

It's like that where I live also.

The main function of a pistol is to fight your way to the nearest rifle!


Sat, 07/16/2011 - 16:30 | 1462448 snowball777
snowball777's picture

You'd be surprised how many of those 'bangers end up fighting for Uncle Sam and can use an M1A as well as the next marine.


Sat, 07/16/2011 - 16:33 | 1462452 Urban Redneck
Urban Redneck's picture

While urban hunters would likely become the hunted and never see death coming- it would be thoroughly ironic vindication to see a couple of competitive CAS shooters armed only with single action Ubertis engage a clown mobile full of competitive gangbangers armed with the high capacity Glocks that the ATF tries to terrify everyone of.  If they don't throw the internet kill switch- someone could post a video to demonstrate that history does repeat itself, and the current generation doesn't really know any better than those from centuries past.

Sat, 07/16/2011 - 17:10 | 1462514 karzai_luver
karzai_luver's picture

Somalia bitchezz, you got gunship??? Didn't think so.

These "urbans" have experience vs swat teams, you? Didn't think so.

I will take the "urbans" , lots more and they been shooting at live targets.

All you goofs that hit a target will get bum rushed before you know what happens.

plus you care about your family, that's a big weakness.

You will be fucked.


Sat, 07/16/2011 - 20:00 | 1462641 Hapte
Hapte's picture

Thank you. Combat is mental (we know how hard these folks are). Good thing these (non-urban?) blowhards fight all our wars, or else there might be a good number of "urban" ex-military "gangbangers" on the street. Nope, no disenfranchised black/latino veterens here...

Sat, 07/16/2011 - 23:02 | 1463076 CompassionateFascist
CompassionateFascist's picture

What "family"? There's millions of single rogue white males out her in Flyover, just aching to settle accounts with the urban Chosen and their ethnoid stormtroopers.

Sun, 07/17/2011 - 05:27 | 1463322 Urban Redneck
Urban Redneck's picture

In April 1775, some urban thugs in Boston had a similar opinion of their superiority over the troglodytes in the surrounding hills.  Their gang color was red.  They had they had the latest equipment, training, and discipline of any military force at the time.  They were the experienced henchmen of the most powerful global mercantilist empire of the day.  They got their asses handed to them by a bunch of redneck Taxachusetts Libtards armed only with hunting rifles, aided by Revere's, Prescott's, and Dawes' rather Luddite precursor to the contemporary twitter flash mobs.


There is a key core distinction between the urban and rural existence.  In an urban environment one forsakes freedom in exchange for convenience.  In a rural environment one pays for the increased freedom through increased responsibility, more required skills, and more work/effort required to achieve the same output.


There are also some more perplexing distinctions between communities when looking at recent examples to disaster response.  Hurricane Katrina had a severe impact on the Gulf Coast in both Louisiana and Mississippi.  The distribution of casualties generally followed the distribution of population.  But the breakdown of social cohesion was far more pronounced in (urban) New Orleans.  The 2010 Tennessee floods were another example.  There are actually countless examples of rising floodwaters in flyover country where communities some together on short notice to prepare and respond to encroaching threats and social cohesion is strengthened, instead of breaking down.  Compare this to the whining social responses heard in New York City when there is a significant snowfall, or the power goes out for a few hours, as it did in 2003.  If the technological crutches which enable urban existence break down for more than 48 or 72 hours, urban societies begin to rapidly decay.


As for military training and doctrine, the ratio of experience to population is probably higher in the rural environments.  However, the benefit is marginal.  Even with a large footprint and extensive logistical support, the US military is has far more capability for urban pacification than rural pacification.  The hinterlands in both Iraq and Afghanistan are routinely left to locals so that the western forces can focus and concentrate their limited resources on the cities.  In the US, cities are literally dependent upon vulnerable infrastructure lifelines for delivery of food and energy (oil and gas pipelines, railroads, aqueducts, and high power transmission lines).  These lines are very long and very easily cut.  If the urban populations seek to strike out against their rural countrymen, history suggests these lines will be cut.  This would on the one hand, soften the urban adversary through hunger and internal conflict, and on the other force the State to deploy its forces for urban pacification- further softening the urban adversary and impairing effective mobilization to the rural surrounds.


Civil strife and civil wars are ugly and costly for all sides.  However, cities have the weakness of being inherently UNSUSTAINABLE without continuous sustainment from the surrounds.  Sun Tzu, Machiavelli, and Marighella should be required reading.  This outcome of this conflict preordained and hence an entirely unnecessary waste of human life.


If everyone is thinking alike, then somebody isn't thinking.

Prepare for the unknown by studying how others in the past have coped with the unforeseeable and the unpredictable.

George S. Patton


Sun, 07/17/2011 - 12:11 | 1463658 Founders Keeper
Founders Keeper's picture

Thank you for your post, Urban Redneck.


If you (not you Urban Redneck) are one of the urban population trekking out of the city into the countryside in the event of societal collapse, do not threaten or strike out against your rural countrymen.

Instead, offer your help, your skills, your knowledge, your man-power. Bring with you---if you can---food, batteries, lighters, radios, ammo, gas/diesel, coffee, soap, TP, medicine (esp children's medicine), etc.

Yeah, bring a gun, but don't forget a blanket and good pair of work gloves.

(Let's hope things don't get that bad.)


Sun, 07/17/2011 - 12:38 | 1463764 Hapte
Hapte's picture

Good post Urban Redneck. I don't think for a second that there will be roving gangs of blacks in the woods gunning for my daughter. Modern cities will die, people will evolve, work together or die.

Sat, 07/16/2011 - 17:29 | 1462548 grey7beard
grey7beard's picture

I bailed out to the country about a year and a half ago.  There is a big difference between the folks in the city where I left and the folks where I live now.  When I talk of severe social disruptions, my city friends are a little dumbfounded that I'm concerned.  Nobody for the most part seems to be concerned.  My new country cousins are the complete opposite and expecting some severe problems.  Most of the country folk are gunned up and laying in supplies.  My city friends, no sense of forboding.  Considering I hardly came from a safe, affluent, white suburb, it's kind of surprising.  IMO, where I moved from was so dangerious, leaving the house without a gun was risky.

Sun, 07/17/2011 - 02:45 | 1463278 Founders Keeper
Founders Keeper's picture

[Most of the country folk are gunned up and laying in supplies.]---grey7beard

I don't know why I cannot help smiling when I read this quote from your Post.



Shooting at the local outdoor range these days has changed dramatically from 10+ years ago. Today, everyone has a black gun. Even the old timers.

Ten+ years ago it was all about wood figuring, checkering, engraving, and game-specific high-power calibers. 30-06 used to be the mid-range caliber.

Today, it's unusual to hear a report louder than 223Rem---with one unusual exception, the 50 cal rifle. And ten years ago you never saw AKs except as a novelty.

Ten+ years ago, you rarely heard a full automatic weapon on the range. Now, there's always one person at the range in full auto. 

Ten+ years ago all the target stands were out at the 50, 100, and 200 yard markers. Today, no one hikes out to the 200 yard post. Vast majority of the targets set at 25yds or less---by handgun AND rifle shooters.

Today, semi-auto is king.

Don't misunderstand me. I'm not criticizing the changes. I like the "black" guns, rails, attachments, bipods, red dot sights, and semi-autos as much as the next guy/gal. Just an observation. Ten years was not that long ago.


Sun, 07/17/2011 - 03:16 | 1463293 grey7beard
grey7beard's picture

I have to confess, my range is now in the back yard by the old garbage dump.  I tend to go with stainless and revolvers are my hand gun of choice.  My brother, OTOH, is all teched out with automatics and lasers and tactical training courses. 

Sat, 07/16/2011 - 15:09 | 1462294 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Good info.  The interesting thing is that what happened in Argentina happened during a time of relative economic strength worldwide as a backstop.  What happens when there is no backstop!? 


Tuco Benedicto Pacifico Juan Maria Ramirez

Sat, 07/16/2011 - 15:17 | 1462312 cosmictrainwreck
cosmictrainwreck's picture

see Lednbrass above

Sun, 07/17/2011 - 00:01 | 1463149 steve from virginia
steve from virginia's picture


Debt will collapse along w/ assets not currency.

Margin calls will be made for cash dollars or 'in kind', not anything else: gold for gold, IBM shares for IBM shares, etc.

Repo markets will be hit hard since good collateral is hard to find now, imagine after it's downgraded?

Don't think problems will start @ once but after a week or so, but will gather force and lifting the ceiling and adding more Treasury supply and Fed easing/discount window/swaps won't do anything ...

that's when people will really start getting frightened, when easing doesn't work.

That 'lender of last resort' card can only be used so often before it 'wears out'.

Sat, 07/16/2011 - 14:40 | 1462243 oldman
oldman's picture


Sat, 07/16/2011 - 14:43 | 1462247 iDealMeat
iDealMeat's picture

+1, So fuckin what...


Sat, 07/16/2011 - 14:25 | 1462205 red2893
red2893's picture


Sat, 07/16/2011 - 14:26 | 1462207 lolmao500
lolmao500's picture

There is less than 168 hours in which we can be proven wrong.

Wouldn't that be 153.5 hres before July 23 0000hres?

Sat, 07/16/2011 - 14:27 | 1462208 AmazingLarry
AmazingLarry's picture

Jack: "We're running out of time, Chloe! In need the numbers now!" 


Chloe: "Jack?! Jack?!! Jack, are you there!?!"


Sat, 07/16/2011 - 18:25 | 1462650 snowball777
snowball777's picture

I really wanted to see them do an episode where Jack tortured the wrong info out of some brown guy leading to megadeaths. 

Sat, 07/16/2011 - 14:27 | 1462212 PulauHantu29
PulauHantu29's picture


In politics, things generally don't happen because they "help the nation" or "make too much sense." If we lived in that kind of world, and the 19th century gold standard had so much going for it, then why do we was it abandoned in favor of the present system?

It was abandoned for political reasons. Factors leading to the demise of the gold standard were the desire of governments to spend in excess of politically tolerable levels of taxation, the need to finance World War I and other wars, and the wishes of the banking for a lender of last resort to bail out over-leveraged banks when they had insufficient reserves to cover their losses.

Political reasons have a logic of their own quite different from the kind of logic that Forbes is using in which good things happen for good reasons. In politics, interest groups organize to gain influence over the government and implement policies for their own benefit, at the expense of the rest of society.>>

Sat, 07/16/2011 - 15:07 | 1462291 AnAnonymous
AnAnonymous's picture

Factors leading to the demise of the gold standard were the desire of governments to spend in excess of politically tolerable levels of taxation, the need to finance World War I and other wars, and the wishes of the banking for a lender of last resort to bail out over-leveraged banks when they had insufficient reserves to cover their losses.


Lew Rockwell, the guy behind Paul's letter and who was unable, like the US citizen he is, to tell he was the one behind the letter, letting his good pal Ron Paul ridiculizing himself by declaring that when bossing  a team of four people, he was unable to know who wrote what.


No, the gold standard was not surrendered for those reasons. It was given up when suddenly, it was recalled to everyone that oil was not a non finite resource, as it was dealt with before. And something had to be done with this disastrous bit of a fact. It had all to do with oil.

Sat, 07/16/2011 - 15:23 | 1462336 Nathan Muir
Nathan Muir's picture

Oil is probably the single most important variable in our modern economy, so naturally the structure in how it and other commodities are priced is critical to any monetary system.  That said, I think leverage was the obvious reason we abandoned the gold standard.  For 40 years now we've leveraged the dollar to the moon, growing debt faster than GDP, manipulating interest rates, PM prices and so on.  These activities are possible due to the fiat currency. The problem now of course is the game is finally up, the compounding interest and laws of math are becoming unambiguously clear and the supporters of the dollar desperately grasp for any and all excuses.  Borrowing a dollar to make 50 cents has never worked before and it doesn't work now.

Sat, 07/16/2011 - 15:25 | 1462339 cossack55
cossack55's picture

I beg to differ. I believe Tricky closed the gold window because everyone else in the world who was not amerikan was buying all the gold the US had for $35/oz.  702 million ozs in 1949, 272 million ozs in 1971.  US politicians have the innate ability to be both corrupt and stupid at the same time. Nothing has changed in that regard since 71'.

Sat, 07/16/2011 - 15:31 | 1462353 WestVillageIdiot
WestVillageIdiot's picture

It is funny how sensible all of these comments regarding gold, oil and government are.  I love reading them to form a better idea about how the world really works.  I would say my understanding of this mess has improved by leaps and bounds in the past 5 years.  I think I can explain a lot of these things very sensibly to the people around me.  But you should see the looks of complete disbelief and misunderstanding I get when I try to discuss these issues with the Average Joe and Ordinary Jane. 

We are in a small minority that actually want to know this stuff.  Most just want to know "what's in it for me?"

Sat, 07/16/2011 - 15:41 | 1462372 cossack55
cossack55's picture

"Whats in it for me" would be an improvement. I usually get "I don't want to know" before they flee.

Sat, 07/16/2011 - 15:34 | 1462360 delacroix
delacroix's picture

politics, sounds a lot like cancer

Sat, 07/16/2011 - 14:28 | 1462213 scratch_and_sniff
scratch_and_sniff's picture

I thought this one was funny from Bloomberg;

"A year after President Barack Obama signed into law the most extensive financial regulations since the Great Depression, Wall Street so far is putting its political money elsewhere.

Employees of Goldman Sachs Group gave Republican presidential candidate Mitt Romney $238,250 in the last three months, more than workers at any other company, according to a computer-assisted analysis of Federal Election Commission data. Obama took in $10,113.

Four years ago, employees of New York-based Goldman gave $994,795 to Obama and $234,275 to Romney, according to the Center for Responsive Politics, a Washington-based research group. For both candidates, it was more than any other company’s employees.

In addition, Romney took in $2.1 million from donors reporting a New York state address, where the financial industry is headquartered, FEC data shows. Obama raised $1.3 million during the same period. For the 2008 election, Obama raised $50.5 million in the state; Romney raised $2.8 million, according to the center"

Who is ever going to take the bankers on with these kinds of swings? -its not Mitt Romney anyway. Obama should go for the jugular now.

Sat, 07/16/2011 - 14:47 | 1462252 sun tzu
sun tzu's picture

I'd like to see Obama shut down Wall Street. It'll be the only good thing he's done so far. Hang the bastards who put him into power. 

Sat, 07/16/2011 - 15:26 | 1462345 cossack55
cossack55's picture

I'm still waiting for him to end the wars as he promised.

Sat, 07/16/2011 - 15:32 | 1462357 WestVillageIdiot
WestVillageIdiot's picture

"Mister President, tear down this Wall Street."
-  WestVillageIdiot 2011

Sat, 07/16/2011 - 14:51 | 1462260 XenoFrog
XenoFrog's picture

If he goes for the jugular, it'll be the collective necks of the American people.

Sun, 07/17/2011 - 21:58 | 1465202 notRobot
notRobot's picture

That may be Obummer's strongest political move: Hear him saying, "Damn right I'm going to default. We pay banks and bondholders instead of retireees, vets, the unemployed, and the people who need it the most?  Over my dead body." He'd be re-elected for sure (and assasninated with probability = ?)...

Sat, 07/16/2011 - 14:27 | 1462214 gorillaonyourback
gorillaonyourback's picture

bond vigilantes are on their way here,,,,,,, keep printing and the dollar collapses stop printing economy collapses.   only way out of this is too stop paying mortgages, rents and all debts. ownership of all real estate should ONLY be for people who live or have a business in the said real estate.   All loans should be non-collateralized and only equity in nature.

Sat, 07/16/2011 - 14:29 | 1462218 darkstar7646
darkstar7646's picture

Stop printing and you have open rioting in every city in America.

You lose either way.

Sat, 07/16/2011 - 14:43 | 1462248 oldman
oldman's picture

I don't think so.

I think we win.

Sat, 07/16/2011 - 14:46 | 1462251 bigwavedave
bigwavedave's picture

that would keep Anderson Cooper busy for months. 

Sat, 07/16/2011 - 14:56 | 1462269 oldman
oldman's picture

Hey Big

Who's Anderson Cooper?

Sat, 07/16/2011 - 15:31 | 1462355 kito
kito's picture

With our low low low interest rates maybe the vigilantes are really hired guns for bernanke. Maybe he set them loose on europe to distract the world from the white elephant in the room.

Sat, 07/16/2011 - 16:14 | 1462422 baby_BLYTHE
baby_BLYTHE's picture

Benocide is the bond market

Sat, 07/16/2011 - 14:32 | 1462228 Long-John-Silver
Long-John-Silver's picture

This instalment of Kabuki Theater brought to you by TPTB.

Visit our bread and circus bar in the lobby.


Sat, 07/16/2011 - 17:42 | 1462577 Urban Redneck
Urban Redneck's picture

Forget the circus, where's my bread?  All I see are worthless post-dated IOUs signed by some guy named Tim.  I don't think WalMart will accept those in exchange for the new flat screen I want.

Sun, 07/17/2011 - 02:36 | 1463277 Tijuana Donkey Show
Tijuana Donkey Show's picture

Butakke theater..........

Sat, 07/16/2011 - 14:32 | 1462229 John_Coltrane
John_Coltrane's picture

"skyrocketing interest rates that could result from downgraded bond ratings was "sobering."

Here's a riddle for this economic moron representative:  how can having no more supply of anything, even debt in the form of treasuries, lead to a decrease in its price and hence increase its yield?  With no more supply, when treasuries are rolled they will get less interest than before.  A more logical conclusion would be that the longer you refuse to issue more debt, (i.e. kept the present ceiling in place) the more valuable existing debt becomes and thus interest rates converge to zero on a sufficient time scale. 

Perhaps, he'd understand it better if you asked him to predict the price direction of gold or oil if we shut all existing supply from mines and oil fields.  Up or down?  I think up-think Libya for a recent example!  And he could then answer this brain teaser with:  when you expand the money supply by issuing more debt does the value of existing money increase or decease?

Sat, 07/16/2011 - 14:59 | 1462275 Quintus
Quintus's picture

It depends on how likely you think it is that interest payments on existing debt will continue to be made when the underlying economy is suffering the impact of not having the $1.5 trillion of government borrowed money pumped into it every year.

My guess would be that if the US had to stick with the existing debt ceiling and further borrowing was proscribed, there would be riots in the streets and a full scale national emergency within about 2 weeks.  It would be all downhill from there.

Sat, 07/16/2011 - 15:18 | 1462318 JLee2027
JLee2027's picture

Unavoidable, isn't it? If not now, then next time.

Sat, 07/16/2011 - 14:33 | 1462231 Atomizer
Atomizer's picture

Your being set up for a more sinister government. Hitler was mere child's play in forming a new society. More historical facts to follow.

Sat, 07/16/2011 - 14:38 | 1462241 Long-John-Silver
Long-John-Silver's picture

People who thought I was crazy promoting secession a few years ago now ask how to join The League of the South.

Sat, 07/16/2011 - 15:12 | 1462301 sun tzu
sun tzu's picture

The country will most likely break up into 7-8 parts. 

1. New England - ME, NH, VT, MA, RI, CT

2. Mid-Atlantic - NY, NJ, DE, MD

3. South - LA, MS, AL, GA, FL, NC, SC, TN, AR, VA, KY, TX, OK

4. Midwest - WI, MN, ND, SD, KS, NE, MO, IA

5. Rockies - CO, WY, MT, UT, ID, NV, AK, AZ, NM

6. West Coast OR, WA, CA, HI

7. Rust Belt - PA, OH, IN, IL, MI, WV


Some states might split in two. Eastern PA might go with the Mid-Atlantic while Western PA goes with the Rust Belt. Northern VA might also to with the Mid Atlantic while Southern VA goes with the South. No more bickering over social and economic policies. 

Sat, 07/16/2011 - 15:22 | 1462333 cosmictrainwreck
cosmictrainwreck's picture

personally, I plan to run for President of West Coast

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