Guest Post: The US Debt Crisis - How High Will It Go?

Tyler Durden's picture




 

Authored by Chris Ferreira, originally posted at Economic Reason blog,

The implications of the US debt crisis are not well understood in most circles, and it is not widely spoken about in the media and during important political debates. The irony is that the US debt is so significant that it plays a monumental role in finance and modern political strategy. The debt poses great risks moving forward, and yet it is referred to in only the vaguest of terms.

Here is why the US debt must grow every year and why it is mathematically impossible for it to continue forever.

Before we can understand why the debt must grow every year, here is is a visual representation, to scale, of how much the current debt is standing at. Each tall uniform column in the background of the picture below refers to a pile of $100 bills stacked one on top of another. Each “tower of debt” consists of 10 x 10 fork-lift palettes that reach out into the sky and are higher than the old World Trade Center buildings. These towers of debt represent $US 16.394 trillion. However, by the time you wake up to read this, it will be larger than that. DemonOcracy does great work on visual representation of the US debt levels. 

Why did the US debt grow to these proportions?

Short answer: the US government spends more than what it receives in revenue. In 2012, the US federal government expects to receive $2.5 trillion in revenue, while the total spending carried out by the federal government is $3.8 trillion. The difference ($1.3 trillion) is debt piled onto of the previous debt.

To put $1.3 trillion into context, it is approximately $3,56 billion a day. To make matters worse, the current debt does not take into consideration federal obligations such as social security, Medicare, pension, and retiree health promises. According to David Walker, former controller of the US, when these unfunded programs are added to the enormous debt, it stands at $70 trillion and growing–that is $10 million per minute!

Seventy trillion dollars is over four times the debt in the picture on your left, dwarfing the current US GDP; in fact, it is approximately the world’s annual GDP in 2011. For a current view of the US debt, see the debt clock here.

The government allows for the debt to continue to grow by adding new debt on top of old debt plus compounded interest. Instead of paying back the debt, the government just borrows more to cover previous interest. The interest payments on the debt is over $1 billion a day. When “Uncle Sam” takes out a loan, it is called a bond (I.O.U.). These bonds are purchased by investors, banks, and foreigners. These bonds are a promise to pay capital plus interest. What “Uncle Sam” does, essentially, is pay his investors with his credit card and create new loans to cover interest.

Talk about short-sighted finances with no discipline.

Compounded interest has allowed the debt to grow exponentially, and has reached, in my opinion, unsustainable levels where the debt is reaching at the vertical portion of the “hockey stick” formation.

debtceiling_graph

 

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.

- Albert Einstein

How does the US government allow the US debt to grow?

Doing the “right thing” is usually political suicide for politicians. Cutting expenditure to pay its bills to pay down the debt will make the economy implode. Instead, the government in power continues its daily activities and promotes new social programs to promote reelection. Almost half of the spending done by the US government goes to entitlements (Medicare, Medicaid, social security). If any cuts are carried out in this sector, you can expect riots on the street (approximately 28% of the US population are baby boomers and 80% of investments and laws are carried out by this powerful demographic.) Cuts to entitlements are highly unlikely!

chart

 

The continuous debate on raising the debt ceiling is all about a government mismanaging its money and not being able to control it–much like a child with no discipline. Since debt is being mismanaged, it has caused many distortions in the markets, and yet the debt is allowed to grow because of the US Congress. The debt ceiling has been increased 10 times since 2001. If the debt ceiling were actually a ceiling, the market and debt distortions would have imploded the economy–an implosion necessary for the economy to restore its equilibrium and liquidate all inefficiencies.

“Too big too fail” is absolute nonsense.

Paying back investors, costly wars, entitlements and bailing out the “financial terrorists” (who caused the crisis) all add to the national debt and to the dysfunctional economy that continues to operate until its debt will cease to grow. The problem with this system is that it created significantly more credit (someone is the creditor to all the debt) than “cash” money (money in your wallet). Every time debt expands, the credit supply also expands. (Read Fractional Reserve Lending on how money is created.)

According to the FED, the Total Credit Market Debt Owed (TCMDO) is approximately 53$ trillion and 2.4$ trillion in the true money supply (M1). In other words, cash money is approximately 4.5% of credit (TCMDO/M1).

The result to our economy is that “boom” periods are hardly driven by cash money, as cash money is insignificant in relation to credit. Credit is what drives the markets, and it is this same credit that “busts” the markets as well, in times of credit contraction. In order for debt to expand, someone must be lending the US this money. At the moment, the lenders are China, Japan, and the OPEC countries. 

But why do they continue to buy this debt?

Because they have too.

The US Dollar is the reserve currency of the world. You need it to buy oil, a vital component of any economy. Since other countries like China cannot print US dollars at their leisure, they have to get it from somewhere. They get it from trade with the US. The US buys products in Asia and the rest of the world with US dollars, and in turn these same dollar surpluses are used to buy oil and US bonds, creating a much needed artificial demand for US dollars.

This is also how the enormous US 558$ billion trade deficit in 2011 was financed. The US has been in a trade deficit since the 1980′s and it continues the grow as jobs and manufacturing are being lost to more competitive nations. The trade deficit also accounts for the national debt. The financing of the debt creates artificial demand for US bonds which helps lower the interest rate and coincidentally helps to raise the debt levels even higher.

The table below shows the leading foreign holders of US debt, which are China and Japan, followed by the OPEC countries. These are the main financiers of the US trade deficit.

 

But here is the Achilles’s heel for the US debt scheme:

In order to maintain and continually expand the debt, the US dollar needs to remain the reserve currency. In order for there to be continuous demand for these dollars and debt instruments, the US dollar needs to maintain a hegemony over competing currencies. Any threat to the dollar needs to corrected immediately. or else confidence in the US dollar will be quickly eroded and the subsequent tsunami of US dollars abroad rushing into the US will cause hyperinflation as never seen before.

William R. Clark’s excellent book, Petrodollar Warfare, treats this issue precisely, going in depth into the Petrodollar collapse and how the US maintains its dollar supremacy with its current imperialistic foreign policy. This gem of a book is a definite read for anyone wanting to know how the US truly maintains its power on the world stage.

Undoubtedly, the extent of US debt would never have been possible had the US dollar not been the reserve currency and had there been less favourable global trade policies to provide a channel for the distribution of dollars. (You can also read more about the Petrodollar here.)

Why must the debt grow every year?

To keep the debt-servitude paradigm going. To increase economic activity in a country operating in this type of system, you need to increase the level of credit and thus debt grows in tandem. This is self serving: if debt is the “fuel” to increase economic activity, interest payments will become larger and larger, until eventually it reaches a point where debt can no longer be increased. This point is known as the Minsky moment–when there is no net benefit to extra debt.

Adding debt, both public and private, creates an environment of servitude among the population while the banks are generating extra profits. Through their lobbyist groups, the financial terrorists create favourable laws to keep people enslaved with debt.

Real estate, for instance, is a heavily subsidized investment; such subsidies entice people to purchase real estate and as a result, people are unwittingly working for the banks. In a real free market, people save money for a purchase.

The word “save” is becoming archaic in this debt servitude paradigm, a paradigm that was build on sand and cards and that can and will eventually collapse. The foundation, of course, is confidence in the US dollar.

So there we have it, in our “creditopia” world, if debt does not expand, the economy cannot grow and jobs cannot be created. In order to increase debt, foreigners have to continually finance the ever growing debt by purchasing government bonds and selling consumer products to the US. In turn, the US must increase the level of consumption, decrease savings, and eliminate the threat of any nation posing a risk to the US dollar hegemony. Is this a symbiotic or a parasitic relationship? Is is certainly a relationship that cannot grow forever. It poses an economic risk for ALL nations due to the interconnectedness of the global economy.

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Sat, 01/05/2013 - 21:26 | 3126231 SgtSchultz
SgtSchultz's picture

Am I the only one getting a bit discouraged?

Sat, 01/05/2013 - 21:31 | 3126236 Yen Cross
Yen Cross's picture

 Long live " Hogans Heros"...

Sat, 01/05/2013 - 21:33 | 3126237 Yen Cross
Yen Cross's picture

 Cc.

Sat, 01/05/2013 - 21:33 | 3126238 Yen Cross
Yen Cross's picture

 Tyler has "Uncle Fester", running the servers. Appologies for the multiple post/

Sun, 01/06/2013 - 02:22 | 3126630 CrockettAlmanac.com
CrockettAlmanac.com's picture

Anybody with a UPS socket in their face can run my server anytime.

 

http://mollymediastudios.files.wordpress.com/2010/09/uncle-fester-light-...

Sun, 01/06/2013 - 12:16 | 3127007 GMadScientist
GMadScientist's picture

You're gonna want a step-down and some conditioners in there...Fester's not the most predictable power source.

 

Sun, 01/06/2013 - 05:38 | 3126718 bunnyswanson
bunnyswanson's picture

Not.  I actually wrote this in a moment of such elation, I can only remember parts of it.  (edited out webpage link .. i need to delete that)

My words: 

Hey Visalia, Let's join in supporting Barack and Joe! (Debate Watch Party - old)

I am hoping to attend or host a party here at my house, to get Visalian's moving in the Obama and Joe direction - Where are the yard signs, Visalia? Where are the bumpers stickers? The T-shirts? Why is the Obama and McCain headquarters "right beside one another." Is there no shame????? Is the democratic headquarters lacking in imagination or is it actually a republican headquarters in disguise????

There are people in this town who support Barack and Joe are looking for a place to gather and show their support. I will provide one if others are interested. Young people and children more than welcome. No republicans. Faint blur now.  It's unbelievable I had this much faith in the president.  It's really sad to see how wrong my judgement was.  I feel like I was tricked.

Sat, 01/05/2013 - 21:30 | 3126235 blindman
blindman's picture

"..It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.
" .....
05 January 2013
Taibbi: Secret and Lies of the Bailout
http://jessescrossroadscafe.blogspot.com/2013/01/taibbi-secret-and-lies-...

Sat, 01/05/2013 - 22:06 | 3126293 Seasmoke
Seasmoke's picture

hey Matt, why not a family of niggers who moved in forever, sleeping nine to a bed and building a crack lab.....

Sat, 01/05/2013 - 22:55 | 3126360 Dr. Sandi
Dr. Sandi's picture

Yow, Hillbilly Backlash at Zero Hedge.

You go, Jethro.

Sat, 01/05/2013 - 23:33 | 3126403 akak
akak's picture

 

hey Matt, why not a family of niggers who moved in forever, sleeping nine to a bed and building a crack lab.....

Hey, now you're straying into Trav777's territory!

Sun, 01/06/2013 - 00:02 | 3126466 blindman
blindman's picture

ahh, the race thing just never stops. it
is like a metaphysical virus, pre-reproductive
dna type pre-life form. in the preconscious
and isolated mind . there it is. waiting to
live in some other's birth. where were we?
oh yea, the stealing of the treasury of the global
currency and treasury, that would be by mutant
inbred offspring of , not niggers, but pure bred
hillbillies. and color doesn't matter, it is the
nurture not the nature that breeds this dominant
ignorance and global stupidity. the conquest
forthcoming as relates to geopolitical advance of
resource allocation and "legitimacy" happens to
depend on appearance of simpatico-africano.
ie. o-man africa resource war vs china. banker
fed west vs/integrated the east pro-devel-uction/
transition. simultaneous rape of the west for
pocket padding and rule of yachts and pissing off
money to buy law, judges and politicians and whatever
other bullshit that can be bought with empty debt
note promises which includes most everything except
the real deal. nothing to see here ....

Sun, 01/06/2013 - 01:45 | 3126601 francis_sawyer
francis_sawyer's picture

I bet the chicks really dig that 'pillow talk' you lay on them...

Sun, 01/06/2013 - 03:23 | 3126677 blindman
blindman's picture

initially i was going to say ...
"please explain francis. take your time to
wipe yur gob and the saliva from your pillow biting
extravaganza, then proceed. i bet i have no interest
or concern regarding yur dementia other than how it
will detract from the general and particular individual
profit. aka, blow it out u'r ass tweed fuck nut."
..
but on second consideration i would say,
there are no chicks and no pillow talk.
there is only failed monetary systems and resulting
death and suffering for u, me and the chicks.
" good times " right francis?
u have a good day my friend and best to u, seriously,
best to u.

Sun, 01/06/2013 - 10:53 | 3126892 francis_sawyer
francis_sawyer's picture

if there are no chicks & no pillow talk... What the hell kind of world are we really fighting to establish?... [would be my reply]

~~~

I'll waste my time trolling someone else next time...

Sun, 01/06/2013 - 11:13 | 3126915 blindman
blindman's picture

thank you. i was going to delete
my comment in response but you got
there first, apologies if it was not
appropriate, it wasn't. at the time
i thought it had some humour to it.
uhhhyy. apologies f.s.

Sun, 01/06/2013 - 00:23 | 3126501 Yen Cross
Yen Cross's picture

 The , basement babies  are crying out  AKAK.

  The 2000?) It's time to write a letter with those digits you were born with!

  FUCK HEADS!  Your parents from the ghetto should be banished to an old leper colony!  Fucking scum!

Sun, 01/06/2013 - 04:05 | 3126686 bunnyswanson
bunnyswanson's picture

The slave owners are responsible for the broke families within the African American community and resultant strife.  And this method they used can be applied to anyone who requires reprogrammed to obey the rules.  First Lady is the great granddaughter of a slave.  The stories that must be told during the holiday, in honor and remembrance of them. 

From article:  The Willie Lynch Letter

"The following excerpt from the Willie Lynch letter explains the process of destroying and rewiring our ancestor’s psyche.

“Both a wild horse & a wild or natural nigger is dangerous even if captured, for they will have the tendency to seek their customary freedom, and in doing so might kill you in your sleep. Hence both the horse & the nigger must be broken, that is breaking them from one form of mental life to another, keep the body and take the mind.

In other words, break the will to resist.” From this point he breaks down the gruesome degrading breaking process. The main agenda was to break the black family apart, dehumanize the male, which destroys the dependence & respect the female has for the male, resulting in her striving for her independence from the male.

Destroying the family dynamics, and removing the black male as the head of the family was just the starting point to rewire the psyche of our ancestors."

http://therichhistory.wordpress.com/

Sun, 01/06/2013 - 12:23 | 3127021 GMadScientist
GMadScientist's picture

"why not a family of niggers"

Because the analogy was to bankers and there are precious few black faces in those circles.

Besides...everyone knows it's more like they moved in, sublet your house to hillbillies and crackheads, pimped your wives and daughters at "Solomon's Bunny Ranch", and then proceeded to sue you after they slipped and fell on their own feces.


Sun, 01/06/2013 - 12:35 | 3127050 DosZap
DosZap's picture

Because the analogy was to bankers and there are precious few black faces in those circles.

Dont have to be BLACK to be called Nigger dude, check out the defintion.

Sat, 01/05/2013 - 23:25 | 3126391 andyupnorth
andyupnorth's picture

Matt Taibbi Chrysostom (aka "of the Golden Mouth").

Sun, 01/06/2013 - 04:22 | 3126692 Element
Element's picture

Had wondered what Taibbi was up to, cheers - direct link

http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout...

Sat, 01/05/2013 - 21:35 | 3126242 PUD
PUD's picture

Just play the hand out logically....every manjack saves nothing, maxes out every source of credit to the point that all his income goes towards debt service even at the lowest increment above zero possible....then what? Can he consume on grain of rice more?

This is the financial system we live under. It's what's made everything currently in existence possible...but obviously it is finite isn't it?

Debt as money, usury, interest on money that compounds relentlessly staved off all these years by ever greater debt creation and velocity of money until all walls are hit

Debt based money was always a flawed and doomed to fail system. Nothing in nature can compound grow infinitely. Bacteria in a petri dish will double and double again and again until all the growth medium is consumed...then they all die. Only nature has laws, men have rules. They are not the same.

Zero interest rates and zero savings is the wall. It is the economic speed of light that cannot be exceeded. We are there. With no savings to spend and no credit to draw on there can be no more money creation. Without more money creation there can be no growth. You cannot prime a dry hole.

Bubble economics has bought time. The inflation of various assets has created more money credit that could be tapped for a time...housing, dot com, student loans, sovereign debt bubbles that we now enjoy. What entity remains? Extraterrestrial?  No, there is no higher predator in the money food chain, the can has been kicked as far as it can go, no more money credit can be created without the destabilizing effects of inflation and devaluation which we are witness to now as well.

The only question remains is when not if the cogs seize up for good and what comes of the chaos that will ensue...I wish I had a clue about that. 

Sat, 01/05/2013 - 22:51 | 3126359 Lucius Corneliu...
Lucius Cornelius Sulla's picture

"The only question remains is when not if the cogs seize up for good and what comes of the chaos that will ensue...I wish I had a clue about that. "

It is very predictable because it has happened numerous times.  Currency debasement and debt collapses are nothing new.  There really is nothing new under the sun.  Read some history.

Sat, 01/05/2013 - 22:57 | 3126363 Dr. Sandi
Dr. Sandi's picture

The beauty of the human mind is that even when we end up living amid chaos, it all seems so NORMAL.

The visitor is generally amazed that "they can live like that."

Sat, 01/05/2013 - 21:38 | 3126247 monad
monad's picture

Time of your life, huh kid?

Sat, 01/05/2013 - 21:39 | 3126250 pauhana
pauhana's picture

Jeez, I feel like such a jerk for not having a mortgage or any other debt.  At least my "investments" don't earn any actual money unless I sell them (Thank you, Ben!) so that the crappy $30k I get from SS and pension put me in the "Congratulations!  You're getting a refund!" category.  Now all I have to worry about is the complete collapse of the entire world financial system.  Buddy, can you spare a $1 Trillion dollar coin?

Sat, 01/05/2013 - 21:44 | 3126256 Dark Meadowlark
Dark Meadowlark's picture

What Debt Crisis? ANYONE SEE THE the FREAKING yield curve and stock market  lately? FED= winning!

Sat, 01/05/2013 - 21:59 | 3126278 q99x2
q99x2's picture

I don't know how high it can go but since they are going to disarm the population shortly. The banksters will probably begin killing us by the end of 2013. They just purchased another 200,000,000 rounds to add to the 1,600,000,000 rounds already in stock at DHS.

Sat, 01/05/2013 - 22:47 | 3126351 CompassionateFascist
CompassionateFascist's picture

I sent an e-mail to Feinstein's office stating that if she wants my M1a, she can come for it in person. Chickenhawk neo-conz aside, the ZOG isn't going to disarm anyone...not w/o sparking civil war. Molon Labe.

Sun, 01/06/2013 - 02:30 | 3126640 CrockettAlmanac.com
CrockettAlmanac.com's picture

I'll bet you used a really large font.

Sat, 01/05/2013 - 22:10 | 3126280 ElTerco
ElTerco's picture

 

"Why must the debt grow every year?"

The real answer?  Assume there were a fixed amount of money (i.e. gold).  There will always be a portion of the population that has a propensity to accumulate more money than is offset by their individual ability to produce.  In very short order, all the money would end up with this class of people, eventually forcing all those who accumulate roughly as much as they produce out of the economy.  Therefore we must have an accumulation of debt every year so that those who produce roughly equal to their consumption won't be frozen out by those who are good at taking but not good at giving back.

Clearly, this explanation is not perfect, but for the most part, this is the root of the problem.

Sun, 01/06/2013 - 09:25 | 3126805 Quinvarius
Quinvarius's picture

Let me correct that disaster of a post:

Assume there were a fixed amount of money (i.e. gold). There will always be a portion of the population that has a propensity to accumulate money as savings to retire on.  In very short order, all the money would end up in banks, eventually being loaned into the economy by the banks.  Therefore we must have an accumulation of savings in gold every year.  Then, those who run banks won't be forced to get money from the government when people stop putting savings into useless fiat coupons and stop depositing the useless depreciating coupons in banks.  This also benefits the gold savers who were very smart to save their money and earn a return from the banks, who then loaned it out into the economy to create businesses.

There.  Now you understand economics.

 

Sun, 01/06/2013 - 15:06 | 3127345 ElTerco
ElTerco's picture

The problem with what you just said is that banks don't loan out gold, they loan out promises for gold that doesn't exist (i.e. debt).  I stand by what I said.

 

PS For those who might have misinterpreted my post, there are two clear examples of people who take more than they give back: welfare recipients and bankers.  The middle class is the productive part of society that ends up getting squeezed out, and without debt, there would be no more middle class.

Sat, 01/05/2013 - 22:12 | 3126300 Yen Cross
Yen Cross's picture

  Tyler ,  You forgot the "Squid Blimp".  Blankfein and Bloomturd throwing (EBT) cards upon the masses...

Sat, 01/05/2013 - 22:30 | 3126318 tooriskytoinvest
tooriskytoinvest's picture

HOLY SHIT!!!

H.J.Res. 15 amendment to remove term limits on the President of the United States http://investmentwatchblog.com/h-j-res-15-amendment-to-remove-term-limits-on-the-president-of-the-united-states/
Sat, 01/05/2013 - 22:58 | 3126364 Dr. Sandi
Dr. Sandi's picture

Yeah, that'd play well in the RED STATES that would also have to ratify a constitutional change.

Sun, 01/06/2013 - 09:46 | 3126822 Quinvarius
Quinvarius's picture

This country is a banana republic.  Obama could do it with a signing statement.  McCarthy was right.  We do have a problem with Communism in this country.

Sun, 01/06/2013 - 09:51 | 3126828 Winston Churchill
Winston Churchill's picture

Didn't matter when the 16th amendment did NOT get the required majority of States

to ratify.

Go and count them yourself if you don't believe me. I did.

One short.

Sat, 01/05/2013 - 22:30 | 3126319 espirit
espirit's picture

TBTF = Sunk Costs.

http://en.wikipedia.org/wiki/Sunk_costs

Societal Collapse Bitchez.

Sat, 01/05/2013 - 22:31 | 3126325 blindman
blindman's picture

To be fair, Paulson started out by trying to tell the truth in his own ham-headed, narcissistic way. His first TARP proposal was a three-page absurdity pulled straight from a Beavis and Butt-Head episode – it was basically Paulson saying, "Can you, like, give me some money?" Sen. Sherrod Brown, a Democrat from Ohio, remembers a call with Paulson and Federal Reserve chairman Ben Bernanke. "We need $700 billion," they told Brown, "and we need it in three days." What's more, the plan stipulated, Paulson could spend the money however he pleased, without review "by any court of law or any administrative agency."

The White House and leaders of both parties actually agreed to this preposterous document, but it died in the House when 95 Democrats lined up against it. For an all-too-rare moment during the Bush administration, something resembling sanity prevailed in Washington.

Sat, 01/05/2013 - 22:34 | 3126333 blindman
blindman's picture

from same link ...."
So Paulson came up with a more convincing lie. On paper, the Emergency Economic Stabilization Act of 2008 was simple: Treasury would buy $700 billion of troubled mortgages from the banks and then modify them to help struggling homeowners. Section 109 of the act, in fact, specifically empowered the Treasury secretary to "facilitate loan modifications to prevent avoidable foreclosures." With that promise on the table, wary Democrats finally approved the bailout on October 3rd, 2008. "That provision," says Barofsky, "is what got the bill passed."

But within days of passage, the Fed and the Treasury unilaterally decided to abandon the planned purchase of toxic assets in favor of direct injections of billions in cash into companies like Goldman and Citigroup. Overnight, Section 109 was unceremoniously ditched, and what was pitched as a bailout of both banks and homeowners instantly became a bank-only operation – marking the first in a long series of moves in which bailout officials either casually ignored or openly defied their own promises with regard to TARP."
.
and there is more ..

Sat, 01/05/2013 - 22:38 | 3126341 km4
Sat, 01/05/2013 - 23:26 | 3126349 Yen Cross
Yen Cross's picture

  Risk> Reward  (1-2%) of asset pool. 

 Fed. Risk reward. 16.4T vs 2.3T based on ponzi reporting = { 16.4 ÷ 2.3}/ 7.1304%

 

 That is the "Federal Reserve" risk ratio! Excluding all other axioms, which the Fed. CBO, GAO does in it's reporting!

 Updated; 16.4T over 2.7T. *

Sat, 01/05/2013 - 22:58 | 3126362 ebworthen
ebworthen's picture

To the moon!  No wait, Saturn, no, Pluto; err...maybe a black hole somewhere...

Sat, 01/05/2013 - 23:01 | 3126369 ABG LINE
ABG LINE's picture

Buy Bonds or Notes.

Sun, 01/06/2013 - 07:49 | 3126763 SanOvaBeach
SanOvaBeach's picture

Have balls or ovaries, buy BitCoin!

Sat, 01/05/2013 - 23:03 | 3126370 ReptilianSlaveMaster
ReptilianSlaveMaster's picture

Great news everyone! Collect your 40k in benefits and stop complaining, government knows whats best

Sat, 01/05/2013 - 23:13 | 3126378 blindman
blindman's picture

oh, and the shite continues here ..
.
Secret and Lies of the Bailout

The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come
Read more: http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout...

."
"In the letters, Summers laid out a five-point plan in which the bailout was pitched as a kind of giant populist program to help ordinary Americans. Obama, Summers vowed, would use the money to stimulate bank lending to put people back to work. He even went so far as to say that banks would be denied funding unless they agreed to "increase lending above baseline levels." He promised that "tough and transparent conditions" would be imposed on bailout recipients, who would not be allowed to use bailout funds toward "enriching shareholders or executives." As in the original TARP bill, he pledged that bailout money would be used to aid homeowners in foreclosure. And lastly, he promised that the bailouts would be temporary – with a "plan for exit of government intervention" implemented "as quickly as possible."

The reassurances worked. Once again, TARP survived in Congress – and once again, the bailouts were greenlighted with the aid of Democrats who fell for the old "it'll help ordinary people" sales pitch. "I feel like they've given me a lot of commitment on the housing front," explained Sen. Mark Begich, a Democrat from Alaska.

But in the end, almost nothing Summers promised actually materialized. A small slice of TARP was earmarked for foreclosure relief, but the resultant aid programs for homeowners turned out to be riddled with problems, for the perfectly logical reason that none of the bailout's architects gave a shit about them. They were drawn up practically overnight and rushed out the door for purely political reasons – to trick Congress into handing over tons of instant cash for Wall Street, with no strings attached. "Without those assurances, the level of opposition would have remained the same," says Rep. Raúl Grijalva, a leading progressive who voted against TARP. The promise of housing aid, in particular, turned out to be a "paper tiger."" .....

Sat, 01/05/2013 - 23:14 | 3126380 JR
JR's picture

The economic crisis, after all has a cause. It’s usury…fought for centuries in Europe, but in America, after these 100 years, its impact has finally reached the point of full destruction of the economy. Its impact also can be felt on the European Union.

The writer Sheldon Emry in Billions for the Bankers, Debts for the People, written in 2001, lays out a clear outline of how this usury has become established as a prelude to the ‘solution’ -- a banker-imposed dictatorship on America. Highlights:

MONEY IS MAN’S ONLY ‘CREATION’: “Economists use the term ‘create’ when speaking of the process by which money comes into existence. Now, creation means making something that did not exist before. Lumbermen make boards from trees, workers build houses from lumber, and factories manufacture automobiles from metal, glass and other materials. But in all these they did not ‘create,’ they only changed existing materials into a more usable and, therefore, more valuable form. This is not so with money. Here, and here alone, man actually ‘creates’ something out of nothing. A piece of paper of little value is printed so that it is worth a piece of lumber. Its value has been ‘created’ in the true sense of the word.

“As is seen by the above, money is very cheap to make, and whoever does the ‘creating’ of money in a nation can make a tremendous profit!! Builders work hard to make a profit of 5% above their cost to build a house.

“Auto makers sell their cars for 1% to 2% above the cost of manufacture and it is considered good business. But money ‘manufacturers’ have no limits on their profits, since a few cents will print a $1 bill or $10,000 bill…

“[F]rom 1913 on, ALL of our money has been created and issued by an illegal method that will eventually destroy the United States if it is not changed. Prior to 1913, America was a prosperous, powerful, and growing nation, at peace with its neighbors and the envy of the world. But, in December of 1913, Congress, with many members away for Christmas holidays, passed what has since been known as the FEDERAL RESERVE ACT…

“Since that ‘day of infamy,’ more disastrous to us than Pearl Harbor, the small group of ‘privileged’ people who lend us ‘our’ money have accrued to themselves all of the profits of printing our money—and more! Since 1913 they have ‘created’ tens of billions of dollars in money and credit, which, as their own personal property, they then lend to our government and our people at interest. ‘The rich get richer and the poor get poorer…’”

THEY PRINT IT—WE BORROW IT AND PAY THEM INTEREST: “We shall start with the need for money. The Federal Government, having spent more than it has taken from its citizen in taxes, needs, for the sake of illustration, $1 billion. Since it does not have the money, and Congress has given away its authority to ‘create’ it, the Government must go the ‘creators’ for the $1 billion…the Government has now indebted the people to the Bankers for $1 billion on which the people must pay interest… Under this unholy system, those United States bonds have now become ‘assets’ of the Banks in the Reserve System which they then use as ‘reserves’ to ‘create’ more ‘credit’ to lend…

“In addition to the vast wealth drawn to them through this almost unlimited usury, the bankers who control the money at the top are able to approve or disapprove large loans to large and successful corporations to the extent that refusal of a loan will bring about a reduction in the price that the corporations’ stock sells for on the market. After depressing the price, the bankers’ agents buy large blocks of stock, after which the sometimes multi-million dollar loan is approved, the stock rises, and is then sold for a profit. In this manner billions of dollars are made with which to buy more stock. This practice is so refined today that the Federal Reserve Board need only announce to the newspaper an increase or decrease in their ‘discount rate’ to send stock up and down as they wish. Using this method since 1913, the bankers and their agents have purchased secret or open control of almost every large corporation in America. Using that control, they then force the corporations to borrow huge sums from their banks so that corporation earnings are siphoned off in the form of interest to the banks. This leaves little as actual ‘profits’ which can be paid as dividends and explains why stock prices are so depressed, while the banks reap billions in interest from corporate loans. In effect, the bankers get almost all of the profits, while individual stockholders are left holding the bag.

“The millions of working families of America are now indebted to the few thousand banking families…and these banking families obtained that debt against us for the cost of paper, ink, and bookkeeping!”

For a debt-free, prosperous America, end the Fed.

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