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USA: Uncle Sam is Dead

Pivotfarm's picture




 

Isn’t it wonderful how the US believes (whether that be the citizens or the politicians) that the state will never default on its debt repayments? It’s the unfailing belief that your country will pull through and anyone that says otherwise is always either shouted down or told to go elsewhere. It’s all well and good having the belief that you will come out tops. But, the times of the US being at the top of the roost are well and truly over today. We should be playing the funeral march as Obama leaves office for all the debt that has been piled onto the country rather than the Star Spangled tune. The Stars just aren’t that spangled anymore, are they? Unprecedented debt, a budget that isn’t going to get passed, two sides that are playing a stand-off, a country that is held hostage, a debt rating that will be reduced and the Chinese and the Japanese that are now pointing the reprimanding finger.

When the US defaulted on their payments for their mortgages, they got called into the banks and had their houses repossessed back at the start of the financial crises. They were living on credit then and they still are. Obama should get the first plane to Tokyo and then fly on to Beijing. He will be needing to sign a few papers before he hands over the Good Old US of A to the Asians. Uncle Sam is dying a slow and painful death. A death by debt that has shot through the roof of the White House.

Uncle Sam is dead!

Stand-Off

While the Republicans and the Democrats play their game of Cowboys and Indians, the country is slipping closer and closer the default possibility of the debt crisis. There may be some out there that will be saying it won’t happen. There are others that are out there saying that they have been waiting for this for a long time now and it serves them right for getting the country into the situation.

To the first people the answer is it will certainly happen whether or not you believe it. It’s more like child’s play and pulling the wool over your eyes. It won’t go away and I’ll just turn round and say ‘I told you so’. To the second people all that can be said is that the default on payment won’t serve as a means of leveraging the politicians out of government or into a better time of a new era that will be rushing through the door as Obama leaves. It’s not the dynasties of politicians that have governed the country that will suffer or change. It’s the people. Revolutions won’t happen either. The people will just be diverted from their purpose by using decoys that are waiting in the wings in Iran and in Syria to change the public attention in the media.

China and Japan

Both China and Japan have jumped on the bandwagon to publically express their unhappiness that there is a stand-off taking place in the USA. Nobody will back down now as it will mean losing face. Obama will stand his ground. But, if he loses, will he go?

The Republican Speaker of the House of Representatives, John Boehner stated that it was now “time to stand and fight”. Don’t you just love an OK Corral shoot-out between the goodies and the baddies? Trouble is it’s mighty hard to see which side is rooting for the goodies these days.  The Republicans will not (according to Boehner) back down. They have the majority and unless Obama concedes on Obamacare they will not vote either the budget or the debt ceiling increase.

China’s Vice-Finance Minister Zhu Guangyao stated: “the US has a large amount of direct investment in China, and China has a vast number of US Treasury bonds. The US is clearly aware of China's concerns about the financial stalemate [in Washington] and China's request for the US to ensure the safety of Chinese investments”.

China holds $1.28 trillion in US Treasuries at the present time. However, according to financial analysts, the figure should be a lot higher in reality since the China invests through intermediaries and not just directly.  What a sorry state of affairs, for the arch-enemy China to have finally found it’s proof that Capitalism only works when it’s backed by Communists.

  • The Chinese economy is projected to increase this year by 7.5% (and that’s a drop in the estimate in April that was fixed at 8.3%).
  • The forecast for 2014 has also been lowered from 8% to 7.7%.

Japan has also publically stated that they are worried about a US default on debt repayments. If the Dollar falls (which it will), then the Yen will suffer and that will set the cat amongst the pigeons in Japan. Tokyo’s concerns over default are justified. Shares on the Nikkei dropped by 1.2% overnight yesterday.

President Obama cancelled attending the Asia-Pacific Economic Cooperation summit (APEC), which only added fuel to the fire for the Asians. But, more importantly it allowed other countries to take center stage and that was good news for Russia and China in particular.


USA: RIP Uncle Sam

 USA: RIP Uncle Sam

The politicking theatrical display in Washington has enabled China to very much deliver a stern lecture to Obama as well as to the US in general. It has been able to remind the country just how much they are in debt to the Chinese and while they are waiting to take over as the Reserve Currency as well as the top economic power in the world it must be remembered that for the moment the Dollar is still the Reserve currency. Any change that is abrupt will undoubtedly bring about chaos.

The US is currently digging its own grave. The world’s largest economy and the home of the world’s Reserve Currency will be finally saying goodbye, but it will be in Chinese most certainly. Some believe that its political theatrics and lawmaker antics and that none of these worries will happen at all. If only. It’s a wonderful site to witness the historical failings of a country especially when nobody believes that it is going to happen.

The Republicans will be pinning the tail on the donkey that’s for sure! Obama will end up with egg on his face and he will own this one in history when the tale gets told in the future. Whatever happens: Uncle Sam is dead!  

is running a deficit thus is in the trillions and they act as if it’s just a few bucks?

Originally posted: USA: Uncle Sam is Dead

 

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Tue, 10/08/2013 - 18:45 | 4035935 bugs_
bugs_'s picture

Uncle Sugar is dead.

Watch out for Uncle Sam's twitchy foot - it still has a kick or two left in it.

Tue, 10/08/2013 - 18:27 | 4035872 Winston Smith 2009
Winston Smith 2009's picture

"Isn’t it wonderful how the US believes (whether that be the citizens or the politicians) that the state will never default on its debt repayments?"

Duh!  There aren't any "debt repayments" nor will there be for any sovereign with significant debt. It's a rentiers world, fool!  As long as the interest on the debt is paid, no one cares about the principle... until the debt becomes so great that a sovereign can't even pay the interest. That's when things get fun and the US isn't even remotely close to that point. A completely different story for Japan, though.  They ARE toast within 18-24 months.

Tue, 10/08/2013 - 20:11 | 4036346 WhackoWarner
WhackoWarner's picture

Matters not, the math, the charts, the VIX, the trends analysis, the on ongoing endless analysis to make sense of the fact that our mindset is skewed.  Has been for a generation.

This colonialism mentality and all it produces on every ripple back and forth must stop.  And guess what we are watching the battery of clock lose any hope of a recharge.

 

And the death will not be pleasant for anyone who has been asleep.

Tue, 10/08/2013 - 20:20 | 4036377 WhackoWarner
WhackoWarner's picture

Not to be long-winded but change comes in many forms and on many levels.

Focus here always seems to be money.  And that is the ultimate weakness of the Western, capitalist, colonial mindset.

In Canada the Natives are restless, with all rights to be so.  The world will, it will revolt against this colonial, elite, pontificating and charting human growth by money, mindset.

In Canada we Have now "Idle No More".  People saying WTF did you do to us and now you are telling us how to cure it.

z

Tue, 10/08/2013 - 20:25 | 4036396 WhackoWarner
WhackoWarner's picture

In other words.

 

Take down these Facists?  That have been operating and accelarating for? seems like centuries now with colonial greed.  With the mindset that the value of living is money.

 

How do you take them down?  Ultimately the Chinese, with a very long memory (and also a respect for wealth)  will take down the only thing that colonialism has ever held dear...guess what?

Tue, 10/08/2013 - 17:44 | 4035713 Fix It Again Timmy
Fix It Again Timmy's picture

How many people realize that their income tax payments go straight to the Federal Reserve Bank System - a cartel of private banks.  And, they want their monetary infusion every two weeks and you HAVE to abide,  and how many people stand up and put their hand over their heart when the Pledge of Allegiance is played and they showcase soldiers who "fight for our freedom" - what a huge, stinking pile of vile shit the American political and military system is and I speak from experience having been drafted and sent to war by Uncle Scam.... 

Tue, 10/08/2013 - 17:24 | 4035630 geewhiz
geewhiz's picture

But what will happen to Israel now that they have ridden their barnyard beasts to exaustion? Who will protect them from all the people they fucked with?

Tue, 10/08/2013 - 17:22 | 4035618 epwpixieq-1
epwpixieq-1's picture

Time for dark humor:

"Uncle Sam is dead! Long live Uncle Ben!" for he gives us money (and we are getting reacher).

This is why many undeserving peoples are reacher than any of us.

And do not shoot the messenger, shoot uncle Sam ... Oh pardon, uncle Sam is dead any way, shoot uncle Ben instead or the one who is a way reacher than you.

 

Tue, 10/08/2013 - 16:44 | 4035452 dexter_morgan
dexter_morgan's picture

Presidents carry the burden of what happens under their watch. Years from now NOBODY will remember Reid or Boehner - it will be OBAMA that owns the results of the outcome from this.

 

Tue, 10/08/2013 - 16:41 | 4035449 dexter_morgan
dexter_morgan's picture

Harry Reid on raising the debt ceiling in 2006:

“If my Republican friends believe that increasing our debt by almost $800 billion today and more than $3 trillion over the last five years is the right thing to do, they should be upfront about it. They should explain why they think more debt is good for the economy.

How can the Republican majority in this Congress explain to their constituents that trillions of dollars in new debt is good for our economy? How can they explain that they think it’s fair to force our children, our grandchildren, our great grandchildren to finance this debt through higher taxes. That’s what it will have to be. Why is it right to increase our nation’s dependence on foreign creditors?

They should explain this. Maybe they can convince the public they’re right. I doubt it. Because most Americans know that increasing debt is the last thing we should be doing. After all, I repeat, the Baby Boomers are about to retire. Under the circumstances, any credible economist would tell you we should be reducing debt, not increasing it.Democrats won’t be making argument to support this legalization, which will weaken our country.”

Tue, 10/08/2013 - 16:39 | 4035442 dexter_morgan
dexter_morgan's picture

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. ... I therefore intend to oppose the effort to increase America’s debt limit.”

— Then-Sen. Barack Obama, floor speech in the Senate, March 16, 2006

 


Tue, 10/08/2013 - 16:26 | 4035367 jballz
jballz's picture

Japan?

Debt is bullshit. Wake the fuck up.

Japans debt is four times ours.

How come every country in the world is a debtor nation???

Smoke and fucking mirrors bitches.

Tue, 10/08/2013 - 16:14 | 4035291 DYS
DYS's picture

"While the Republicans and the Democrats play their game of Cowboys and Indians, the country is slipping closer and closer the default possibility of the debt crisis."

 

Possibility?   Inevitability.

Tue, 10/08/2013 - 14:27 | 4034762 no more banksters
no more banksters's picture

"Bankers, who lie at the top of the economic elites, want to secure the ultimate goal of the neoliberal doctrine, which is the dissolution of the nation-state. This would extricate economic elites from state supervision and taxes for the welfare state, which is in favor of the economically weaker, and would finalize their dominance through the growing concentration of wealth in a global environment of full deregulation. So, they do not want in any way to open a new cycle of a Roosevelt type state intervention because this could hinder their ultimate goal."

http://failedevolution.blogspot.gr/2013/10/new-deal-vs-obamacare-one-rea...

Tue, 10/08/2013 - 13:44 | 4034484 Fix It Again Timmy
Fix It Again Timmy's picture

Correction: Uncle Scam is dead or nearly so....

Tue, 10/08/2013 - 15:16 | 4034977 Radical Marijuana
Radical Marijuana's picture

"Uncle Scam" 

Great correction, Again Timmy.

As a Canadian, I pay just as much attention to American politics, as to Canadian, if not more so, because the death of the "Uncle Scam," i.e., the death of the bankster dominated runaway financial fraud system, set up and operated through the PRIVATE Federal Reserve Board, and all the rest of the big PRIVATE banks, which are legally allowed to make "money" out of nothing as debts, will be catastrophic for most Americans, and hit Canadians next hardest.

Although I  find Pivotfarm articles take too many givens for granted, this is surely the most important point: "it must be remembered that for the moment the Dollar is still the Reserve currency. Any change that is abrupt will undoubtedly bring about chaos."

Legalizing PRIVATE banks to make "money" out of nothing as debts automatically drives them to make as much of that "money" as possible out of nothing. Each opportunity is seized upon, and as many more opportunities as possible are created. The result has been that the overall debts of the total USA "Uncle Scam" have been on a nearly perfect exponential growth curve since the early 1970s when the last ties to the material world we severed, and the USA dollar became a pure fiat currency, which is faith-based, and so operates as a State Religion.

Clearly, the ecological notion about such exponential growth leading to OVERSHOOTING, and then collapsing, is what applies to the runaway triumph of force backed frauds, driving debt slavery to become debt insanity. There are no mathematical ways to solve these problems now. Actually, there were never any from the moment the Federal Reserve Board was created, since the basic design structure is based on FRAUD, backed by the FORCE of governments.

The force can never make the fraud become anything else but more and bigger frauds. The PRIVATIZED money-as-debt system is the result of the application of the methods of organized crime to take control over the government, so that "We the People" agree to fleece ourselves to death, while we pay for the development of the fascist police state apparatus to slaughter us off, when the established systems collapse, as those systems must necessarily do, since the foundation of the whole system is fraud, and building everything on the basis of fraud "will undoubtedly bring about chaos."

How much chaos depends on how much war that triggers, as well as how much democidal martial law is also caused. In that context, I agree with the reply that Popo posted above, that the established military systems, that back up the monetary systems, have become equally insane!

Tue, 10/08/2013 - 13:10 | 4034362 Madcow
Madcow's picture

Game over. 

Both the Republicans AND Democrats are now itching for an excuse to default - so they can blame the other party -

http://www.telegraph.co.uk/finance/economics/10359616/White-House-openly...

There's no way back to "normal" from here. 

"Conventional wisdom" is confident there will be a last minute compromise.

But as Hunter S. Thomspon procliamed: "When the going gets weird, the weird turn pro." 

Tue, 10/08/2013 - 13:17 | 4034403 cougar_w
cougar_w's picture

Default seems to be the way out. Seems the Japanese and Chinese at least got the memo.

This is likely to become extremely awkward over the next few months. After awkward, I think it gets hot.

Tue, 10/08/2013 - 15:59 | 4035204 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

After awkward, I think it gets hot.

Might even be awkward and hot simultaneously.

http://www.youtube.com/watch?v=UzjsSrAQTNA (17 seconds)

Tue, 10/08/2013 - 12:34 | 4034188 SWRichmond
SWRichmond's picture

So we default and China nationalizes US industrial holdings.  Easy Peasy.

Tue, 10/08/2013 - 13:31 | 4034450 Renewable Life
Renewable Life's picture

Which the Chinese will take that deal, considering what they are getting is the physical house (US manufacturing base) and what the US is getting is thrown out of the house, but we would be debt free!!

However, what happens next in that situation is going to be quit interesting and shocking to the citizens of the US!

Tue, 10/08/2013 - 19:34 | 4036200 Raging Debate
Raging Debate's picture

Like what Renewable? We can't supersize at McDonalds anymore? There are more $10 an hour jobs making our own widgets again? Wage inflation in a few years? Becoming more energy independent? Downsizing military?

I dont know man, low organic growth and being boring for a decade may not be all that bad. I am sick of paying taxes for military to protect a small group of investors and the co-investors the politicos investments "over there".

Tue, 10/08/2013 - 12:47 | 4034236 Doubleguns
Doubleguns's picture

I believe a lot of those holdings belong to TBTF banks, the fitlhy eliteists and the politically connected. Think any of the "we the people" have assets there? Doubtful!!! Maybe an Embassy.

Tue, 10/08/2013 - 12:22 | 4034134 aerojet
aerojet's picture

Fact:  China, Japan, and Europe are in worse shape than the US.

Tue, 10/08/2013 - 13:45 | 4034485 Renewable Life
Renewable Life's picture

Don't fool yourself dude, China is NOT in "as bad a shape" as the US, Japan, and Europe!!!

It's actually apples and oranges and this is one of the myths of the western media, that has been propagated for decades! China has not made a bad deal yet, when it comes to their long term development plans!

-there population is unarmed and culturally indoctrinated to love mother country before all else, and are prepared to sacrifice for it.

-China has inherited the western worlds manufacturing base, technology, and labor force.

- China has massive, undisclosed "commodity" reserves, as well as gold, silver, oil, rare earth minerals, and the government owns 95% of the productive land in China, that could be sold as needed.

- China owns trillions of dollars in foreign reserve debt, that could be foreclosed on by international courts and law, if needed.

-China currently holds dozens of direct trade agreements with Countries all over the planet, and is preparing to become the worlds reserve currency, and will have the biggest single domestic consumer demand on Earth going forward, 4 x bigger then the US, when fully developed!

Do they have risks, of course they do, every Country does, but are they in as bada shape, going forward, not even close!!

Tue, 10/08/2013 - 18:17 | 4035826 are we there yet
are we there yet's picture

China does have its own vulnerabilities.  Food. Farming capicity, food transport capacity, tiny domestic oil production needed for their economy. Systemic corruption. In a crisis farm dwellers can eat their own grown food, but as a massive move to cities has occured the logistics of handeling a famine if started is difficult.

Tue, 10/08/2013 - 14:04 | 4034604 edotabin
edotabin's picture

" Don't fool yourself dude, China is NOT in "as bad a shape" as the US, Japan, and Europe!!! "

 

Don't fool yourself, if the US and Europe stop buying or if there is a severe slowdown, China will be in absolute horrible shape.

The US propped up Europe after WWII and all the way through the EU stages. It even propped up recently with swap lines etc. Now the US is sick, Europe is anemic at best and if you stop going to Walmart it will make a huge difference in China.

 

Tue, 10/08/2013 - 14:50 | 4034889 Ghordius
Ghordius's picture

"It even propped up recently with swap lines etc". is this so? imo it was propping up a couple of megabanks of the transnational persuation

Tue, 10/08/2013 - 12:42 | 4034227 Ghordius
Ghordius's picture

Fact: you have not defined what you mean with "worse shape". all three have lots of dollars, for example. but of course this is something Uncle Sam can print at will, so we are back at square one

Tue, 10/08/2013 - 12:45 | 4034237 LawsofPhysics
LawsofPhysics's picture

The only "fact" I see is that fact that the U.S. defaulted on it's currency in 1971 when the last remaining tether to reality and any remaining "rule of law" was ended.  Since then, the defaults on private obligations have been put on the backs of taxpayers and the public all around the world, all so that a few familiar families can maintain power and control.

Tue, 10/08/2013 - 12:34 | 4034184 Winston Churchill
Winston Churchill's picture

The cleanest turd in the bowl ,is still a turd.

Tue, 10/08/2013 - 18:26 | 4035857 are we there yet
are we there yet's picture

The US leadership election has become electing the cleanest turd in the bowl. Obama is changing from a floater to a sinker.

Tue, 10/08/2013 - 19:13 | 4036071 TBT or not TBT
TBT or not TBT's picture

Cleaner than Romney? Obama is dedicated to take down the Republic. He was the most radical politician in the Senate. He finds the constitution disgraceful. His entire history is murky. Cleaner than Romney? Even McCain? The latter two you get the idea they like our Republic ok and would like it to persist.

Tue, 10/08/2013 - 12:32 | 4034175 Jethro
Jethro's picture

That may be so, but it still doesn't mean that this turd can be polished.

Tue, 10/08/2013 - 11:51 | 4034003 TrustWho
TrustWho's picture

Keynes and easy money has all countries in trouble. The only question is: Can we have a reset without WWIII?

Tue, 10/08/2013 - 20:29 | 4036410 Buck Johnson
Buck Johnson's picture

Nope, in a nutshell.

Tue, 10/08/2013 - 18:28 | 4035866 are we there yet
are we there yet's picture

If we have any more wars, we should send all the bankers, and lobbyists to fight it.

Tue, 10/08/2013 - 17:36 | 4035685 geewhiz
geewhiz's picture

That is the question we should all worry about.

Tue, 10/08/2013 - 13:16 | 4034381 cougar_w
cougar_w's picture

Race to the bottom, except the winner is whoever arrives last. 

Tue, 10/08/2013 - 12:41 | 4034213 Ghordius
Ghordius's picture

Yes, Dick. the MAD principle still applies. but don't tell this to all those who's pastor is convinced we are living in End Times

The End Of The World The Way You Know It depends heavely on what you know, or can imagine

Tue, 10/08/2013 - 19:07 | 4036033 The Alarmist
The Alarmist's picture

Raising the debt ceiling is like another drenaline shot into a dying heart.

Tue, 10/08/2013 - 16:22 | 4035341 Winston of Oceania
Winston of Oceania's picture

Well if you follow history you will see that we are in the currency wars stage of the reset. Next comes the trade wars and then the shooting wars. We have a few peaceful months left to us. 

Tue, 10/08/2013 - 14:36 | 4034739 Popo
Popo's picture

Ghordius, you may think MAD still applies, but that shows you're not reading military analysis and strategy on a daily basis.   Do a little research on the 'asian pivot', and more specifically on "airsea battle" (the rather generic sounding latter name is the (unclassified) code name for the latest scenarios for large-scale confrontation with China).  MAD is officially *off* the table (or at least the "A" has been dropped) at the top levels of the military for a variety of reasons -- but mostly because the top brass on both sides of the game board want a large, highly mechanized, conventional/non-nuclear and very expensive war with a major adversary -- without MAD.  So they're making one happen.  

Of course, saying you're not going to take it to a nuclear level and concentrate on A2/AD instead is all well and good at the planning phase.  But when you start to get your ass beat, there's a whole other kind of thinking that starts to work it's way into the conference room. 

So MAD will of course always apply in priciple, but it is now no longer the limiting force that it used to be when it comes to policy and initiation.   

 

Tue, 10/08/2013 - 14:46 | 4034873 Ghordius
Ghordius's picture

Popo, have you forgotten how much the whole world has invested in China churning products? Do you really think that Russia would just stay put? Hell, if Uncle Sam would start in earnest to harass China beyond the bearable even Japan and us europeans would move

Uncle Sam needs some international & moral high ground to exercise his hegemony, particularly after Iraq and Afghanistan

and China is not going to deliver that

I know that there are powerful MIC interests in "spending some ammo", but there is no adequate target, in the same way as at a certain point in a game of Monopoly all streets have an owner

and no, Syria just showed there isn't opportunity in the ME. perhaps in a few years in Africa, at a very low level. all imho, of course

Tue, 10/08/2013 - 14:37 | 4034821 Boris Alatovkrap
Boris Alatovkrap's picture

When SAD, no need for MAD.

(Obamanomics = Self Assured Destruction)

Tue, 10/08/2013 - 14:54 | 4034900 Manthong
Manthong's picture

Obama will own this for all of history.

Boehner will barely be a footnote.

..but then, this might be the fulfillment of Obama's Kenyan colonial Cloward-Piven choom dream.

Tue, 10/08/2013 - 16:51 | 4035494 lakecity55
lakecity55's picture

Yes! This is a scripted intent to default and "kill the dollar."

From the Banksters' perspective, the only way out is the SDR or so-called Bancor.

Both Russia and China are now able to back their currencies in oil/gas/Au/Ag.

It is the culmination of Cloward-Piven with a couple of twists thrown in by the Banksters.

Time to hasten your Hurricane Preparations.

The phony healthcare system by itself will destroy the US economy in a year.

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