Guest Post: Is America On A Burning Platform?

Submitted by Jim Quinn of The Burning Platform

Is America On A Burning Platform?

David Walker, the former Comptroller of the United States from 1998
until 2008, has been warning politicians, the media, and the American
public for over a decade that we are off course and headed for disaster.
In August 2007, before the financial system meltdown of 2008, Mr.
Walker declared:

The US government is on a “burning platform” of
unsustainable policies and practices with fiscal deficits, chronic
healthcare underfunding, immigration and overseas military commitments
threatening a crisis if action is not taken soon. There are striking
similarities between America’s current situation and the factors that
brought down Rome, including declining moral values and political
civility at home, an over-confident and over-extended military in
foreign lands and fiscal irresponsibility by the central government. The
fiscal imbalance meant the US was on a path toward an explosion of
debt. With the looming retirement of baby boomers, spiraling healthcare
costs, plummeting savings rates and increasing reliance on foreign
lenders, we face unprecedented fiscal risks. Current US policy on
education, energy, the environment, immigration and Iraq also was on an
unsustainable path. Our very prosperity is placing greater demands on
our physical infrastructure. Billions of dollars will be needed to
modernize everything from highways and airports to water and sewage
systems.

Three years have passed since Mr. Walker sounded the alarm and issued
his dire warning. The National Debt in August 2007 was $8.9 trillion.
Today it stands at $13.6 trillion, a 53% increase in just over 3 years.
It took 205 years as a country to accumulate $4.7 trillion of debt.
We’ve added $4.7 trillion in the last 38 months. It doesn’t appear that
anyone in government heeded Mr. Walker’s warnings.

The perpetually optimistic pundits that occupy the positions of
influence on CNBC and the other MSM networks try to paint a rosy picture
of the American state of affairs day after day. They urge citizens to
spend money they don’t have. They are sure that extending unemployment
benefits to 99 weeks will improve the unemployment situation. They
declare that Cash for Clunkers and the Home Buyer Tax Credit were
successful government programs. They are sure that invading countries in
the Middle East will make America safer. Nobel Prize winners in
economics declare that the government should undertake another $8 to $10
trillion of money printing because the first $5 trillion wasn’t enough.

The Federal Reserve is pulling out all the stops in attempting to
invigorate the American economy. The stock market is surging. Everything
is surging. The optimists are crowing that all is well. Deficits don’t
matter. We can borrow our way to prosperity. Cutting taxes will not add
$4 trillion to the National Debt if not paid for with spending cuts. All
is well. So, the question remains. Was David Walker wrong? Are we
actually on a perfectly sturdy solid platform? Or, are we on the
Deepwater Horizon as it burns and crumbles into the sea? Let’s examine
both storylines and decide which is true.

AMERICA ON A STURDY PLATFORM

• The National Debt of $13.6 trillion is manageable because interest rates remain at historic low levels.
• The addition of $1.6 trillion in debt per year is necessary because
  government must step in for the lack of spending in the private sector.
  This will jump start the economy. This is Keynesianism 101.
• The debt to GDP ratio of 93% is not dangerous. Japan has a debt to
  GDP ratio of 200% and they are doing fine. This proves we have plenty of
  room to grow our debt.
• The US dollar is the reserve currency for the entire world. We can
  systematically devalue the USD, which will reduce our foreign debt
  burden over time. The foreigners who leant us the money are on the hook
  and they have no way out.
• A depreciating dollar will help our manufacturing industry by making American exports cheaper in foreign markets.
• The $700 billion TARP plan saved the American financial system. The
  American taxpayer will end up making a profit in the long run from this
  program.
• Cash for Clunkers was an astounding success. It increased demand for autos dramatically.
• The Homebuyer Tax Credits resulted in a surge in home sales and stabilization of home prices.
• The $800 billion Stimulus plan saved America from a 2nd Great Depression. Without it, we would have lost millions of jobs.
• Consumer spending accounting for 70% of GDP is sustainable and
  desirable. If we can just get credit flowing again and encourage
  consumers that it is safe to use their credit cards to spend, the
  economy will come roaring back.
• This is not the time to save. Nobel Prize winners in economics urge
  Americans to spend because of the Paradox of Thrift. It may be smart for
  one person to save more than they spend, but if everyone does it a
  consumer society will collapse. We can save later is the recommendation.
• A QE2 of $8 to $10 trillion would surely increase the animal spirits
  of the dejected American people. The stock market would soar to 20,000
  and everyone would feel rich. Spending would surge. All would be well
  again.
• The Social Security Trust Fund is not broke. The money contributed
  by Americans over the decades is in a lockbox and the fund will be
  solvent for decades. A few tweaks and it will be solvent forever.
• Medicare has been one of the best government programs ever
  conceived. It has sustained our senior citizens and delivered high
  quality care to all at a reasonable cost.
• Baby Boomers are rational and realistic. The statistics that show
  they have not saved enough to sustain them in retirement is overblown.
  Social Security will suffice. If not, they’ll just work a little longer.
  No worries.
• Obamacare will reduce healthcare costs, improve service, cover more
  people, and reduce the profits of insurance companies and drug
  companies.
• We have the best educational system in the entire world. People from
  all over the world want to get into our best Universities. No Child
  Left Behind has been a huge success.
• We are safer today than we were on September 11, 2001. We won the
  Iraq War and freed the Iraqis from the clutches of a madman. We are
  fighting them over there so we don’t have to fight them over here. The
  terrorists are in disarray and retreat.
• The $1.1 trillion spent on the Middle East Wars, the trillions spent
  on the Dept of Homeland Security, and the expansion of government
  ability to protect its citizens through enhanced surveillance techniques
  and enhanced interrogation techniques on suspected terrorists has been
  beneficial to the safety and security of the American people.
• A Defense budget of $900 billion per year is essential to our national security. We are surrounded by potential enemies.
• It is a net positive for the US to allow illegal immigrants to stay
  in the country. Who else would we get to work in the fields picking
  lettuce and cutting our suburban lawns?
• Gasoline is only $2.70 a gallon. We are awash in supplies of oil.
  Peak oil is a myth perpetuated by environmental nuts. We have centuries
  worth of oil in the Bakken Shale. If we would just open up Alaska to
  drilling, our troubles would be gone. Drill, Baby, Drill.
• Our crumbling infrastructure is actually a fantastic opportunity. A
  2nd Stimulus program to upgrade our infrastructure would create millions
  of high paying jobs.  

AMERICA ON A BURNING PLATFORM

• The National Debt is $13.6 trillion today. Interest expense for
  fiscal 2010 totaled $414 billion. Based upon the current spending path
  and assuming that the Bush tax cuts are extended, the National Debt will
  exceed $20 trillion by 2015. A reasonable expectation of 5% interest
  rates would result in annual interest expense of $1 trillion. The entire
  budgeted outlays of the US government are $3.5 trillion today.
• Deficits exceeding $1 trillion per year are baked into the cake for
  the next decade. Non-Defense discretionary spending totals only $700
  billion. Defense spending totals $900 billion. The remaining $1.9
  trillion is on automatic pilot for Social Security, Medicare, Medicaid,
  and other entitlement programs. Politicians declaring they will freeze
  discretionary spending are treating you like fools. It will solve
  nothing.
• Debt as a percentage of GDP will exceed 125% of GDP by 2015. Rogoff & Reinhart in their book This Time is Different point out the dangers once debt surpasses 90% of GDP: The
  relationship between government debt and real GDP growth is weak for
  debt/GDP ratios below 90% of GDP. Above the threshold of 90%, median
  growth rates fall by 1%, and average growth falls considerably more. The chances of bad things happening to a country increase dramatically after the 90% level is surpassed.
• Japan began their 20 years of tears with a debt to GDP ratio of 52%
  and a National Savings rate of 15%. The Japanese people bought 90% of
  the debt that the government issued. Today, the debt to GDP ratio is
  200% and the National Savings rate is 2%. The US entered this crisis
  with a debt to GDP ratio of 80% and a National Savings rate of 1%. We
  depend on foreigners to buy more than 50% of our new debt. We do not
  control our own destiny.
• A depreciating US dollar is already creating inflation in many
  assets. Gold, silver, oil, and agricultural commodities are increasing
  in price faster than the stock market. The policy of the US government
  and Federal Reserve of devaluing the currency is being matched by
  similar efforts in countries across the globe. The result is a flood of
  liquidity creating bubbles which will pop. The American middle class
  will be squeezed harder as their wages stagnate, while their food,
  energy, and costs at Wal-Mart go higher.
• TARP, the purchase of $1.5 trillion of Mortgage Backed Securities by
  the Federal Reserve, 0% interest rates, and accounting rule changes by
  the FASB have done nothing but paper over the fact that the biggest
  financial institutions in the US are insolvent. The assets on their
  books are worth 50% less than they are reporting. They are zombie banks.
  Their losses on residential real estate, commercial real estate and
  consumer credit continue to grow. The only beneficiaries of keeping
  zombie banks alive are the bankers who are receiving billions in
  compensation while the middle class dies a slow painful death.
• Cash For Clunkers, Home Buyer Tax Credit and energy efficiency
  credits did nothing but shift demand forward and cost the American
  taxpayer $25 billion. The estimated cost to the tax payer per
  incremental home sold was $100,000. Auto sales and home sales plunged as
  soon as the credits ran out. Home prices are falling and used car
  prices have soared due to less supply, hurting the poor.
• The borrowing of $800 billion from the Chinese to dole out to unions
  and political hacks all over the country has been a complete disaster.
  Unemployment has gone up by over 4 million since the stimulus was
  passed. Government spending has crowded out private spending.
  The economy hasn’t recovered because it was never allowed to bottom. Why
  look for a job when the government pays you for two years to watch
  Oprah in a house where you haven’t made a mortgage payment in 18 months?
• Consumers’ spending money they don’t have, saving less than 5% of
  their disposable income, and putting away nothing for their retirement
  is unsustainable. The average credit card debt per household is about
  $15,700. In 1968, consumers’ total credit debt was $8 billion (in
  current dollars). Now the total exceeds $880 billion. Americans
  currently owe $917 billion on revolving credit lines and $80 billion of
  it is past due, according to the latest Federal Reserve statistics.
• A scaling back of consumer spending to a sustainable 64% of GDP
  would reduce consumer spending by $500 billion per year. This would
  allow Americans to save and invest in the country. This is considered
  crazy talk in the Keynesian economic circles.
• The anticipation of QE2 has already made the dollar drop 10% and
  gold, silver and oil jump 10%. Ben Bernanke and the Federal Reserve are
  conducting an experiment on the American people. What they are doing
  today has never been attempted in human history. It boils down to
  whether the authorities can cure a disease brought on by too much debt
  by doubling and tripling the dosage of debt. If this experiment fails,
  the dollar collapse and possible hyperinflation would lead to anarchy.
  Ben is confident it might work. Are you?
• Social Security and Medicare have an unfunded liability exceeding
  $100 trillion. There is no money in a lockbox. Congress opened the
  lockbox and spent the money. Baby boomers are turning 50 years old at a
  rate of 10,000 per day. There is no possibility that the promises made
  to Americans by politicians can be honored. No politician of either
  party will tell the truth to the American public. A massive reduction in
  benefits or a massive increase in taxes would be required to deliver on
  this promise.
• The 2,000 page Obamacare bill that no one in Congress read was sold
  to the American people as a cost saving, care enhancing package of
  goodies. The reality is that it will increase the national debt by
  hundreds of billions, ration care, drive more doctors into retirement,
  strangle small business with onerous regulations and enrich the
  insurance companies and drug companies. The unintended consequences will
  be devastating.
• Total military expenditures for the entire world are $1.9 trillion
  annually. The US accounts for $900 billion of this expenditure. This is 7
  times as much as the next largest spender – China.
• The wars of choice in the Middle East since 2001 have cost unborn
  generations of Americans $1.1 trillion so far, with a final cost likely
  reaching $3 trillion. Just like Donald Rumsfeld estimated.  Over 5,700
  Americans have lost their lives and another 39,000 have been wounded.
  The casualties in the countries that have been invaded number in the
  hundreds of thousands. Are we better off than we were on September 10,
  2001?
• Defense spending in 2000 was $359 billion or 3.6% of GDP. Today it
  is $900 billion or 6.1% of GDP. Every dime of these expenditures is
  borrowed. Are we safer today?
• The Department of Energy was created in 1979 in order to create an
  energy policy that would reduce our dependence on foreign oil. The
  United States, which makes up 4% of the world’s population, consumes 25%
  of the world’s oil on a daily basis. In 1970 we imported 24% of our
  oil. Today we import 70% of our oil.
• Over 50% of our oil imports come from countries whose populations
  hate the US. Mexico, which accounts for 9% of our current oil supply,
  will become a net importer by 2015.
• The US has not built a new nuclear power plant or oil refinery since 1980.
• The existing energy infrastructure is rusting away. 80% to 90% of
  the system must be rebuilt. The cost of rebuilding the infrastructure
  will be $50 – $100 trillion. We have no blueprints, few supplies and
  fewer trained engineers and construction workers.
• Peak oil is a fact. World liquid oil production peaked at 86 million
  barrels per day in 2006. It has not reached that level since, even when
  prices soared to $145 per barrel. Demand will move relentlessly upward
  as China and India and the rest of the developing world march forward.
• The US Military has concluded in a report put out a few months ago
  that by 2012, surplus oil production capacity could entirely disappear,
  and as early as 2015, the shortfall in output could reach nearly 10 MBD.
  A severe energy crunch is inevitable without a massive expansion of
  production and refining capacity. While it is difficult to predict
  precisely what economic, political, and strategic effects such a
  shortfall might produce, it surely would reduce the prospects for growth
  in both the developing and developed worlds.

THE SHIP OF STATE

David Walker was in a ship well ahead of the US Titanic crossing the
Atlantic. He saw the dangerous icebergs floating in the ocean. He sent a
message to the Captains (Bush, Obama) and Executive Officers
(Greenspan, Bernanke, Paulson, Geithner) of the US Titianic that there
was danger ahead. They should have reduced speed and doubled the
lookouts. Instead they listened to the Managing Director of the cruise
line (Wall Street) and increased speed. The US Titanic was unsinkable.
When the inevitable collision with the iceberg occurred, those in
command chose to disbelieve the possibility that the mighty ship could
sink. The nearest ship was four hours away. If the US Titanic had
stopped immediately after striking the iceberg, it would have remained
afloat until the rescue ship arrived. Instead, the masters of the
ship chose to keep going as the compartments below the surface continued
to fill with water. Reputation and hubris drove them to take these
actions.

Those in command knew that there was only room on the lifeboats for
1,100 people. There were 2,200 people onboard. It is interesting to note
that 60% of the First Class (the ruling elite) passengers survived the
sinking, while less than 25% of the Third Class (working middle class)
and crew survived.

David Walker has presented a case for inter-generational sacrifice.
Are today’s generations willing to keep robbing future generations of
Americans by being fiscally irresponsible today? Every borrowed dollar
spent today is a tax on future generations. Are we selfish enough to
leave our children and grandchildren with an un-payable burden so that
we can live well today? Don’t the Wall Street bankers and Washington
politicians have children and grandchildren? It is immoral and
despicable that American leaders and its citizens aren’t willing or able
to make the tough choices needed to save the ship of state. Every great
empire withered away due to the accumulation of bad decisions. Ask
yourself whether this country has made the right choices in the last 30
years. Are we making the right choices today? If you are honest, the
answer is NO. We’ve hit the iceberg. The ending is unavoidable.

Sing us a song of the century
That’s louder than bombs and eternity
The era of static and contraband
That’s leading us into the promised land
Tell us a story that’s by candlelight
Waging a war and losing the fight

They’re playing the song of the century
of panic and promise and prosperity
Tell me a story into that goodnight

Sing us a song for me …

                            Green Day – Song of the Century

Comments

[Hulk]

Agreed, live like kings in many ways but paying a high price for it.Poor mental and physical health. But when all else fails, we will always have underground sprinklers to rely on...

[Minion]

Actually the Catholic (universal) church is prophesied in other places.  The harlot that sits on many waters, the mark of the beast (council of Nicene in 375AD which outlawed the Sabbath and original Holy days), not to mention the furor that arose in 999AD, fanned by the Catholics, that the world was ending (which it didn't).

"And if anyone comes in My name claiming to be the Christ, do not believe it"

"By their works you shall know them, by the fruit that they bear".  Who has brought peace and nonviolence on earth?  Was it the Catholics with their "holy wars", crusades, suppression of science and the original Law of God?  Hint: they changed things around to their own liking.  Satan always counterfeits what is of God.  "And I shall send a strong delusion upon them, seeing they shall not perceive, and hearing they shall not understand".

The logical case can be made for / against the Roman church, who changed the Hebrew calendar and days of rest.  The bible interprets itself if you have eyes to see.  "Knock, and it shall be opened".

[His Dudeness]

When we ask where, if anywhere, is to be found the same Church which the New Testament tells us Christ founded, we have to reformulate the question to ask: What Church, if any, descends in an unbroken line from the apostles of Jesus Christ (and also, not incidentally, possesses the other essential notes of the true Church of which the creed speaks)?

Further, to introduce a point we have not dwelt upon at all up to now, What Church, if any, is headed by a single recognized designated leader, just as the apostles of Jesus plainly functioned, on the evidence of the New Testament, under the headship of Peter?

To ask these questions is to answer them: Any entity or body claiming to be the Church of Christ would have to be able to demonstrate its apostolicity by demonstrating an organic link with the original apostles on whom Christ manifestly established his Church. Nothing less than this could qualify as the "apostolic" Church which Jesus founded.

As much for our instruction as for the assurance he intended to give to the apostles to whom he was actually speaking, Jesus said, "He who hears you, hears me" (Luke 10:16). Do we take these words seriously today? Do we listen to the teachings of the successors of the apostles of Jesus, the bishops, in union with and under the successor of the apostle Peter, the pope, as if these teachings were the words of Christ himself?

If we do, we are properly members of the Church which Jesus Christ founded on the apostles and which has come down to us from them. If we do not, how can we pretend that we take anything seriously that Christ said and taught?

He said nothing more solemnly and categorically than these words, in which he declared that the apostles and their successors would speak for him in the serious business of gathering in and sanctifying his people and leading them toward the salvation he offers. Jesus intended that the fullness of his grace should come to his people in a Church that, from the beginning, was what the creed still calls it today: One, Holy, Catholic, and Apostolic.

[Uncle Remus]

Stop it! You're killing me here.

BAAAAAAAAAAAAAHahahahahahahahaahahahahahahahahaa.

[Cheesy Bastard]

It also declined as it devalued it's currency.  Less and less silver in the denarius. 

[sagerxx]

+107.8682

[deez nutz]

Declining moral values had nothing to do with the Fall of Rome. 

Caligula?

[NotTheMama]

Douchebag, read the comment.  Caligula was Emperor at the height of the Roman empire in the first century AD.  Rome Fell more than four hundred years after Caligula died.

[deez nutz]

Good things take time....... 

Nixon and the gold standard, Ronnie's strong dollar policies, Billy and: NAFTA, China, Graham Leach Bliley.

[snowball777]

All good cons do.

[Babalooee]

Hey Douche',
Careful with your credibility asserting Caligula's reign represented the "height" of the Roman empire.

[Atomizer]

Oh my goodness. Apparently you still don't get it. The Cartels are going Global now. Your just an educated peasant who is mixed up with history based on the assigned CFR education publications

Despotism -1946

http://video.google.com/videoplay?docid=-461990723502527420#

[merehuman]

cute way with words Atomizer.

[Confused]

Did moral values really need a creed? Or is it possible that some of these things are just innate? 

[Uncle Remus]

Exactamundo

[His Dudeness]

"I call BS on this correlation.  Declining moral values had nothing to do with the Fall of Rome.  As far as each generation of any society is concerned morality is always declining and today is never like the good old days."

Each person has to discover the importance of morality and how opting for immorality can effect not only you, but your family and society. Each generation faces different struggles, today we can benefit from lessons learned in past struggles.

"If you're going to use traditional Christian morality as the yardstick, Rome fell when it was at its most Christian and at its highest level of morality."

Rome fell because it could not continue to rule as it had and Christianity was upsetting that ruling power by challenging this earthly Lordship, even by being willing to die to maintain their beliefs. Christianity and morality being the bad seed in Rome's fall is a straw man.

[Uncle Remus]

Christianity and morality being the bad seed in Rome's fall is a straw man.

You might want to think on that a bit longer.

[tip e. canoe]

Christianity was Rome's version of "change you can believe in"

funny how that turned out ain't it?

[SloSquez]

You know Robo, my mortgage holder recently sent me an urgent message via "registered mail" - which I thought was odd.  "I need to refinance."  The rates are so low I must refinance now or I'm a fool.  At the time (1 month ago), I thought it another sales call.  Now I am wondering if they knew it was "up in the air" and they were wanting me to refinance to something more legally solid.

[Bear]

+100% ... Refiforall ... Next move refi all American mortgages and FASB will change the balance sheet rules to mark-to-whatever

[RobotTrader]

Who knows??

All I can say is that Rasputin has correctly called each and every move by the Fed, PigMen, PIMCO, and the Washington Plutocrats since the March 2009 lows.

I agree with him.

I expect a quick, decisive, immediate "action plan" within days.

No way we are going to head into the elections with BAC, WFC, JPM, etc. plunging to new 52-week lows, making business lending even more difficult to obtain.

The fact that the Cartel has ABSOLUTELY FAILED in being able to bomb gold the last few days is another clue.

If they have to trash the dollar to make sure "deflation doesn't happen here".....

That will be the game plan.

Unless gold crashes by $50 in the next few days and the banks lead the SPY into a flash crash, I'd say the THE FIX IS IN.

[Uncle Remus]

Ben, seriously, I am sick of that crap eating grin.

[Mr Lennon Hendrix]

How often do you think these two meet outside bathrooms?

[merehuman]

Nice tile, did you wash your hands?

[fallst]

Ben, You are so fuckin' suave.

Here's to Ben!

[merehuman]

Damn those two guys have that sex look, so pleased with their erections. Deflation must really hurt.

[tmosley]

How did you escape from the other Robotrader?

Never thought I'd see the day that you would start making insightful posts.  Perhaps it really is the end of days, rather than simply the end of an era.

[Village Idiot]

Robo - Thank you for choosing to show another side. Regards.

[Hulk]

The next few months are going to be interesting. I like RAS,understand what he is saying, but think he has thrown in the towel at precisely the wrong moment.

[Village Idiot]

@ Hulk

The farming/ranching foray is temporarily on hold, says the other half. Thanks for the resource material - I'll be back. thanks again.

[Hulk]

The other half can be hard to convince, especially if they have lived in the city their entire life. There are farms were you can go stay for a week and see what it is like. Just choose that farm and those farmers carefully! It can be a great or horrible experience depending on the farmers....

[Village Idiot]

That's a great idea, actually - give her the abridged version.  First impression will be everything.  Any resource material on where to find such a farm?  I know the dude ranch route - not farming.  Thanks.

[Babalooee]

and the tielessness. To morals, the constitution....

[Sudden Debt]

So right Robo, that's also why I bought BAC call last friday at the bottom.

BAC is at 5 X PE!!

Bookvalue is 19,5$

AND NO WAY, THE GOV CAN AFFORD ANOTHER BANK MELTDOWN!

And call are dirtcheap :)

I've bought the 15$ calls 2012 for 110$ per contract.

NO WAY, I CAN LOOSE WITH THAT!

[Heroic Couplet]

Which is worse for America right now:  the jobs sent offshore to China. You can look at Bloomberg Business Week a couple of weeks ago. The cover story was Fox Conn, in China, the manufacturing site that was the location of the Apple worker suicides. Or is the private bank cartel AKA the Federal Reserve worse for America? or are they one and the same?

[Kina]

The addition of $1.6 trillion in debt per year is necessary because government must step in for the lack of spending in the private sector. This will jump start the economy. This is Keynesianism 101.

This only works before the fully effects of recession hits and before the sheep become frightened. And there is a functioning global economy.

It worked for Australia because they hit early and hard while Aussies were still thinking 'what recession?' and so confidence was never lost. That got Australia through who could then tag onto China's stimulus spending and demand for resources. And China's boosting of Asia, another major Australian market.

Stimulus in the US was already too late, the crash was too frightening and dramatic. Nobody was gonna spend after that. And Europe and Japan in the same boat. There was not much prospect of a rebounding global recovery for the US to tag on to.

I think this stimulus stuff can work, but only before the event, early in the curve, and only if the problem isn't too deep.

[no cnbc cretin]

This is not a left, right or independent thing. Fact, what's taking place in the US, is not sustaianable. Plus, we're in a Depression, no recovery, only smoke and mirrors. The US is in a very long contraction, the outcome - it won't be good for most, since most don't have a clue what's going on. Rome is buring, and I'm so sick and tired of those who think things can keep going on, like they always have. So wrong, navie!

[metastar]

Break out the marshmallows and do as the Romans do! Party on like there's no tomorrow!

[Incubus]

This stuff has been said over and over again, yet they're taking their sweet time with this goddamn collapse.

The sooner we get it over with, the sooner we can start recovering.

"Maybe self-improvement isn't the answer, maybe self-destruction is the answer."

"Disaster is a natural part of my evolution, toward tragedy and dissolution."

"The liberator who destroys my property, is fighting to save my spirit. The teacher who clears all possessions from my path will set me free."

whosaidit ?! 

At least we'll improve as a society, instead of existing a vapid consumerists with nothing to define us or our lives.  This is it, motherfuckers.

[Goldilocks]

whosaidit ?! ... Fight Club - Tyler Durden said it ...

Fight Club - Tyler Durden quotes:

It's only after we've lost everything that we're free to do anything.

I say never be complete, I say stop being perfect, I say let... lets evolve, let the chips fall where they may.

Self Improvement is Masturbation.

The things you own end up owning you.

Time to stand up for what you believe in.

IN TYLER WE TRUST

[Troublehoff]

Money is the seed of money, and the first guinea is sometimes more difficult to acquire than the second million. 
Jean Jacques Rousseau 

[metastar]

Every once in a while I look at the MSM and see the arguments that America Is On A Sturdy Platform. I begin to forget about the dire situation our nation faces. I start to question all the gloom and doom "nonsense".

Then I snap out of it and think "Holy Sh*t!" what am I going to do? It becomes too much to think about, like one's own inevitable death. I start to go about my business like it is any other day, but then it is not just any other day, is it? What to do? What to do?

Prepare!

[merehuman]

in the same boat. What to do? Warn your countrymen , explain if they will listen. Many dont want to know but the more prepared your community is , the better of you are. Stash all the food you can  and get seeds to have a garden even if its planter boxes. Food may become very scarce, same as fuel. I got rid of my truck and aim to get a mule.  Took out the driveway as it had best sun and am having a second garden. Made sure my immediate neighbors have caught on and been supplying vegis to them for free. Next year i will trade and my neighbors will protect me if needed. 

i have cut all ties to the government, bank, business, no insurance of any kind . I am a phantom now, a ghost in the machine but active and relatively happy considering i know how deep the crapper is thanks to Zerohedge.

[Cheesy Bastard]

+1.  Dark out!

[Milestones]

Well, just as a personal aside, If the rule of law in this fiasco of the mortgages is swept under the rug with no confiscation of stolen money and no jailing, this country will not make it thru 2011 nor will Europe. Without adherance to some precepts of law, of right and wrong a civilization cannot be sustained. We will regress culturally to where Islam is today and Christianity was a thousand years ago. It is truly over; and the ultimate absurdity is in these "elites" thinking that they will be the world leaders. They have not just fucked the American people, but the Europeans as well as much of the rest of the world. Where in the hell on this planet do they think they can run and hide--spend the wealth-on Mars??

The Jews tracked down their killers w/o GSM, instant photo's, the internet and three Billion more people. Where do you dumb fucks think you are going to run to? Hide with "The hole in the wall gang"? I think thats what gets me--what in the fuck is in your craniums. You're brains have got to be rattling around in your head like a BB in a boxcar. All this agony --for what?????

Milestones

[fallst]

Can somebody tell me where all this money is going?

Is it destroyed? Does all this end up in Switzerland? Wat?

[Oligarchs Gone Wild]

So appropriate on so many levels: http://www.youtube.com/watch?v=3mbBbFH9fAg

[eigenvalue]

Which country do you think will make thru 2011-2012? No one!!

Europe, Japan and even those BRIC countries have the same above-mentioned problems! There will be no escape for anybody around the world !!

[tahoebumsmith]

When the whole world comes apart at the seams, that's when the NWO kicks in. One big reset button and ...BAM...one world currency. IMF,CENTRAL BANKS,FED all coming together to save the world, meanwhile giving total control to a handful of Puppeteers.Biggest problem,China...not on board. You already see the race for resources..We will never leave our mountain of lithium in Afghanistan either.

[Oligarchs Gone Wild]

When I viewed the second picture "America on a Burning Platform" I had to pause for a second.

There are no fire boats attempting to put out the flames.

Those boats are pumping jet fuel onto the fire.

What I see outside the picture, just outside the view - is a lot of posters on ZH and other websites posting comments about all the jetfuel being pumped onto the fire. Looking at each other saying, "can you believe it, look what's happening!".  But none seem to be doing anything to stop those fuel boats.

[win]

you have to remember how fiat currency is created.

debt is issued to create money

however,

the money supply to repay the interest is not created

There has been $13.6 trillion of debt created,
the money to pay the interest was not created,

this debt can never be repaid and we approach the point 
where the interest cannot be repaid,
when this occurs the fed must issue debt at 0%
in order ensure there is sufficient monetary supply
to appease our creditors

[Minion]

Precisely.  Either through deflationary collapse or the inevitable hyperinflationary reaction, fiats never last.

[Stuck on Zero]

It will all come to an end when Americans rise up and throw the bastards out of office.  When will that be?  When the dollar falls so far that gasoline goes to $10/gal.  That's when.

[Oligarchs Gone Wild]

If 2008 was a the closest we've ever come to that event horizon, lets for the sake of arguement call that a 10 on the scale, today, we are at about a 3 or a 4. 

Human behavoir is fascinating.

However, reviewing history, we can go from a 3 or 4 to about 100 in about a day.  Throw in a dash of Internets and run on the bank and you will see 21st century revert to the 19th century in a month, perhaps with a dash of Dark Ages.

What I wouldn't do to see the playbooks that have been authored to date when this event horizon arrives, they absolutely exist.

Given how quietly people went back about their lives on 9/12, I think you can appreciate that the human brain is capable of believing anything, provided it is packaged correctly and the right people say the right things at the right time.

(disclaimer:  this does not mean that I subscribe to 911 conspiracy, it is merely a representation of markets and normalcy recovering in the face of even mass casualties)

Soundtrack: http://www.youtube.com/watch?v=1V_xRb0x9aw

[Oligarchs Gone Wild]

.

[Arkadaba]

Tonight I'm looking forward to a work of fiction I started last week:

http://www.independent.co.uk/arts-entertainment/books/reviews/transition-by-iain-banks-1777592.html

I love Iain Banks and Iain M. Banks. And for some reason his books seem to come around at the right time.

[williambanzai7]

[Oligarchs Gone Wild]

No solar panels?

[williambanzai7]

I thought about it ;-)

[Hulk]

Is that Godzilla emerging from the flames?

[rapacious rachel wants to know (not verified)]

nope, they have oil heat

[Hulk]

Even the white house must know that you can't use solar to heat the WH during a snowstorm...

[Village Idiot]

@ Hulk

posted a message for you a little bit up the thread.  cheers.

[Trifecta Man]

We're on an iceberg running free

http://www.youtube.com/watch?v=xsOrpJfkUos

[prophet]

U.S. is largest economy in the world.  U.S. has "best overall" social, economic, and political system in the world.  Imagine what awaits the rest of the world.  A better analogy may be  astronomical in nature like an asteroid strike or solar flare.  In any case its a man made object being destroyed by natural forces. 

-profd 

[Oquities]

the belief that future generations (our grandchildren) will pay off our profligate debt is ludicrous but stubbornly axiomatic.  what cannot be paid will not be paid, because of default, nationalization of the private sector, war, neo-plague, etc.  those saddled with slave-like encumbrances will naturally throw off the yoke.  if we truly believed that our offspring and their issue would pay for the "sins of their fathers,' we wouldn't do it.

[ella]

Sanctity of contract for the bank but not for the homeowner? Contract law as well as trust law requires certain legal process to protect the rights of the parties.  If the notes/mortgages were not properly transferred into the trust, then the securization thereof was flawed.  The flawed securities were sold to investors nationally and internationally.  The investors bought the securities on the premise that they were valid, if they were flawed and failed to comply with real property law, trust law and the security agreements then they have little value.  If they have little value then the investors did not get the "benefit of the bargain".  In others words did investors spend their money buying "snake oil"?

The reason that America was a safe place for investment was because of our laws and regulations.  If we no longer abide by our law, who will invest?  Why should they invest? Who can you trust?

____________

Be careful who you lionize.  Mr. Walker is credit by some as one of the main causes of the "Financial Crises"   

"Preemption of state banking regulation

In 2003, the OCC proposed regulations to preempt virtually all state banking and financial services laws for national banks and their diverse range of non-bank, corporate operating subsidiaries.^[1] Despite opposition from the National Conference of State Legislatures[2], the OCC's regulations went into effect. In Watters v. Wachovia Bank, N.A. in 2007 the United States Supreme Court validated the preemption of state regulations by the OCC, ruling that the OCC, not the states, has the authority to subject national banks to "general supervision" and "oversight":

...State regulators cannot interfere with the business of banking by subjecting national banks or their OCC-licensed operating subsidiaries to multiple audits and surveillance under rival oversight regimes.^[2]

In Cuomo v. Clearing House Association, L. L. C., the Court clarified its decision in Watters, stating that federal banking regulations did not pre-empt the ability of states to enforce their own fair-lending laws, as "'general supervision and control' and 'oversight' are worlds apart from law enforcement," and therefore states retain law enforcement powers but have restricted "visitory" powers over national banks.^[3]"

Once states could not regulate, and Mr. Walker failed to regulate the big banks the dye was cast for the housing / debt bubble and most of the current financial crises.

Many argue that the FIRE economy was ultimately destructive to America.  He protected and promoted the FIRE economy with his policies. 

Mr. Walker has hooked up with Peter G. Peterson.  And Peter has spent years upon years trying to destroy Social Security.  Why would anyone trust Mr. Walker now?

[Eureka Springs]

+10  Excellent catch.

[centerline]

Spectacular article.

Wanted to add in that the central bankers want everyone to think that the collapse of the current system will be the end of the world.  Sure it would be messy (degree of which is unknown), but not the end of the world as we know it.  Unfortunately, the longer we continue on this path, the uglier the change will be.

Also, China, most of the EU, India, etc. are all tied together.  They are as f***ed as us - only with their own unique experience in how it unfolds.  It is largely for this basic reason... that crap hasn't hit the fan already.

[Thunder Dome]

It will be a very rough decade in history.  But the U.S. will have an opportunity to turn itself around.

[Village Idiot]

"Also, China, most of the EU, India, etc. are all tied together.  They are as f***ed as us"

Agreed.  And what burns more when you're taking your medicine - chinese hot mustard, indian curry, or american white gravy (the kind that goes on biscuits)? 

(bad) food metaphor

[numbers]

I've been a political junkie (following, not part of) for 42 years, started with the Nixon/Humphry race in 1968.

These defenders of the Dims are a hoot. Most must be mush-for-brains 20 or 30 somethings, slept through all their history course, or slept through the last 45 years. The Dims have always outspent the Pubs by miles and miles starting with FDR in the 30s. The second coming of FDR was LBJ with his Great Society programs of the 60s. The third coming is here, The Anointed One, who now sits in the Oval Office.

The primary causes of the mess we are in are the Dim social spending programs of the last 75 years and Fed policies of blowing bubbles. Nothing else is even close.

Have the Pubs spent too much over the last 45 years? Absolutely...... but comparing the Pubs to the Dims over the course of history is like comparing a street corner drug dealer to Osama Bin Laden. Both are bad, but hardly comparable.

[mcarthur]

I think the problems in the US can be traced all the way back to WWII.

Britian abdicated all their messes to the US since they could no longer afford it.  ie Palestine, Egypt, Pakistan, bases in Germany etc.

The US then allowed many nations to keep their currencies low as a means of strengthening their nations to fend off communism. South Korea is a prime example.

Fighting wars no one else wanted to such as the French abdication in Vietnam etc. debased the currency in the 70's.

Nixon in China probably sealed the US's fate since to wean the Chinese off communism meant providing a ready made export market to them.  But 350 million rich people cannot make 1 billion poor people rich without ending up in the poorhouse themselves.

The mandate of the Fed is also too broad.  The Fed should worry about inflation and let employment sort itself out.  Flooding an economy with cash is like pushing on a rope.  It leads to perversions such as asset bubbles and enormous distortions such as the health and legal systems (which just drain cash from society) combining to be 20% of the economy. The political system simply cannot reduce this to 10% due to the roar of special interests.

This US political system (senate,congress, president, special interests, elections every two years, only two political parties, dumb and dumber) means essentially nothing can be accomplished unless in crisis mode.  Again, you can thank the Brits for this mess since the system was designed over 200 years ago to not emulate their central power parliament system.  But central power, like the Canadian system, is exactly what this mess calls for.

The boom time in the 90's will go down in history as the same sort of thermidorian reaction to the end of the Cold War that the end of WWI provided for the roaring twenties.

The need to import oil however is the nail in the coffin since this wil always lead to a trade imbalance and hence dependence on the rest of the world, via IOU's, for a decent standard of living.

I suspect this will all end badly in a generation or two with the US lashing out in order to regain dominance in a world that no longer will recognize it, nor need it.

[Atomizer]

Ni Hao China. US population means no harm to you. America already knows about the Federal Reserve banking insolvency. As you are aware, key figureheads will begin to spin blame on you.

As I have casually mentioned on this site in the past, we have new toys.

An event occurred in July 2010. We all snickered. Why? The UN jumped on the ban wagon of tinfoil. Let me correct myself, UN began a new propaganda spin to advance their agenda. Have a look.

Press Conference by Director of Office for Outer Space Affairs

http://www.un.org/News/briefings/docs//2010/101014_Othman.doc.htm

Then the UN retracts story or redefines its tinfoil role.

UN space expert: I'm no alien ambassador

http://itn.co.uk/836eb1dc15ca2c57b8d210aaa73c00c9.html

What caused all of this UN chaos?

China Xiaoshan AIRPORT

http://www.youtube.com/watch?v=Jj35mA2dwec

Pick your poison, currency wars or your worthless FRN. After the elections, many diplomatic changes will occur in our country.

July was a show & tell day. Let's keep it that way. :>)

Global wars/currency wars is not the solution. Handcuffing the enablers is much easier.

[Eureka Springs]

Full employment is the best medicine.. to sit back and watch trillions go to criminals, who even in times of sanity provide no useful purpose except to bleed liberty, labor, and ingenuity dry. Government has no choice but to do the hiring directly... because the middle men won't do it.

Keep people gainfully employed... make sure we as a nation are as self sustainable (food and energy etc.) as humanly possible. That should be the primary focus in terms of national security these days... provide most affordable social safety nets (rule of law, health and social security, common defense of liberty). These should always be primary measures of societal wealth.. promoted by government above all else, if not exclusively. If money, be it gold or paper, isn't used towards these ends.. it's worthless.

Too many people are looking for a way to say I've got mine and screw the rest.... and they know a functioning government at it's best will always tame that element in human nature. Unfortunately the "i've got miners" are running government, own our media... have been for decades.

Until the power of money is removed from the political party, campaign and sausage making as well as media process, things will only get worse.

The teabggers are the potential nazis of our time... and Democrats are the silent complicit ones, at best. Get out of the two party one monied lawless lock-box... or go join a Gunsmoke six shooting club for derelicts and let some people with a shred of remaining humanity sort this out.

[Burnsy]

http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=258

[snowball777]

http://www.youtube.com/watch?v=_xpW5OpcOGM

[trav7777]

all this kvetching about the banks being bankrupt is so much BS.

They can't be bankrupt bc they lent no real capital.  Their balance sheets can be restored because these are merely accounting ledgers.  Just write in a bigger number on the left side, shit.

The notion of bank insolvency comes from a bygone era where they actually lent something real that they actually possessed.  The whole system runs on pure confidence.

[blindman]

http://maxkeiser.com/2010/10/16/obama-force-real-competition-in-u-s-banking-by-allowing-the-creation-of-banks-like-jak-bank/

.

Obama, force real competition in U.S. banking by allowing the creation of banks like JAK Bank October 16th, 2010 by

[Grand Supercycle]

GOLD updated chart showing parabolic move.

http://stockmarket618.wordpress.com

[daniel]

Really this is a great post from an expert and thank you very much for sharing this valuable information with us.
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