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12 Ominous Warnings Of What A US Default Would Mean For The Global Economy

Tyler Durden's picture


Submitted by Michael Snyder of The Economic Collapse blog,

A U.S. debt default that lasts for more than a couple of days could potentially cause a financial crash unlike anything that the world has ever seen before.  If the U.S. government purposely wanted to damage the global financial system, the best way that they could do that would be to default on U.S. debt obligations.  A U.S. debt default would cause stocks to crash, would cause bonds to crash, would cause interest rates to soar wildly out of control, would cause a massive credit crunch, and would cause a derivatives panic that would be absolutely unprecedented.  And that would just be for starters.  But don't just take my word for it.  These are the things that top financial experts all over the planet are saying will happen if there is an extended U.S. debt default.

Because they are so close together, the "government shutdown" and the "debt ceiling deadline" are being confused by many Americans.

As I wrote about the other day, the "partial government shutdown" that we are experiencing right now is pretty much a non-event.  Yeah, some national parks are shut down and some federal workers will have their checks delayed, but it is not the end of the world.  In fact, only about 17 percent of the federal government is actually shut down at the moment.  This "shutdown" could continue for many more weeks and it would not affect the global economy too much.

On the other hand, if the debt ceiling deadline (approximately October 17th) passes without an agreement that would be extremely dangerous.

And if the U.S. government is eventually forced to start delaying interest payments on U.S. debt (which could potentially happen as soon as November), that would be absolutely catastrophic.

Once again, just don't take my word for it.  The following are 12 very ominous warnings about what a U.S. debt default would mean for the global economy...

#1 Gerald Epstein, a professor of economics at the University of Massachusetts Amherst: "If the US does default, that will make the Lehman Brothers bankruptcy look like a cakewalk"

#2 Tim Bitsberger, a former Treasury official under President George W. Bush: "If we miss an interest payment, that would blow Lehman out of the water"

#3 Peter Tchir, founder of New York-based TF Market Advisors: "Once the system starts to break down related to settlement and payments, then liquidity disappears, as we saw after Lehman"

#4 Bill Isaac, chairman of Cincinnati-based Fifth Third Bancorp: "We can’t even imagine all the things that might happen, just like Henry Paulson couldn’t imagine all the bad things that might happen if he let Lehman go down"

#5 Jim Grant, founder of Grant’s Interest Rate Observer: "Financial markets are all confidence-based. If that confidence is shaken, you have disaster."

#6 Richard Bove, VP of research at Rafferty Capital Markets: "If they seriously default on the debt, what we're really talking about is a depression"

#7 Chinese vice finance minister Zhu Guangyao: "The U.S. 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."

#8 The U.S. Treasury Department: "A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse"

#9 Goldman Sachs: "We estimate that the fiscal pull-back would amount to 9pc of GDP. If this were allowed to occur, it could lead to a rapid downturn in economic activity if not reversed quickly"

#10 Simon Johnson, former chief economist for the IMF: "It would be insane to default, but it’s no longer a zero-percent probability"

#11 Warren Buffett about the potential of a debt default: "It should be like nuclear bombs, basically too horrible to use"

#12 Bloomberg: "Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen."

A U.S. debt default could be the trigger for the "nightmare scenario" that so many people have been writing about in recent years.  In fact, it could greatly accelerate the timetable for the inevitable economic collapse that is coming.  A recent Yahoo article described some of the things that we would likely see in the event of an extended U.S. debt default...

A default would upend money markets, destroy bond funds, slam the brakes on lending, cause interest rates to spiral, make our banks insolvent, and deal a blow to our foreign trading partners and creditors around the globe; all of which would throw the U.S. and the world into economic disarray.

And of course stocks would crash big time.  Deutsche Bank's David Bianco believes that if the U.S. government starts missing interest payments on U.S. Treasury bonds, we could see the S&P 500 go down to 850 by the end of the year.

There would be almost immediate panic among ordinary Americans as well.  In fact, it is being reported that some banks are already stuffing their ATM machines will extra cash just in case...

With just 10 days left to raise the debt ceiling and congressional Republicans threatening to force the government to default on its obligations, banks are taking some dramatic steps to prepare for the economic chaos that would result should the brinkmanship continue.


The Financial Times reports that one major U.S. bank has started stuffing its automatic teller machines with extra cash in preparation for a possible bank run from panicked depositors. The New York Times reports that another bank is weighing a plan to advance funds to customers who rely on Social Security and other government payments that could stop in the event of a default.

Let's hope that cooler heads will prevail and that a U.S. debt default will be avoided.

Unfortunately, it appears that the Democrats are absolutely determined not to be moved from their current position a single inch.  They have decided to refuse to negotiate and demand that the Republicans give them every single thing that they want.

And who can really blame them for adopting that strategy?  After all, it has certainly worked in the past.  Whenever Democrats have stood united and have refused to give a single inch, the Republicans have always freaked out and caved in eventually.

Will this time be any different?

The funny thing is that once upon a time, Barack Obama was adamantly against any increase in the debt limit.  The following comes courtesy of Zero Hedge...

Obama Debt Ceiling

But now Obama says that it is so unreasonable to be opposed to a debt limit increase that any negotiations are out of the question.

So which Obama is right?

If the Democrats will not negotiate, a debt default could still be avoided if the Republicans give in.

And that is what they always do, right?

Perhaps not this time.  Just check out what John Boehner had to say on Sunday...

"I, working with my members, decided to do this in a unified way," the speaker said -- with demands to defund, delay or otherwise alter the Affordable Care Act.


Boehner had expected that the Obamacare fight would come during the next vote to raise the debt ceiling, “but, you know, working with my members, they decided, let's do it now," he said. "And the fact is, this fight was going to come, one way or another. We’re in the fight. We don't want to shut the government down. We’ve passed bills to pay the troops. We passed bills to make sure the federal employees know that they're going to be paid throughout this.”


"You've never seen a more dedicated group of people who are thoroughly concerned about the future of our country," he said of House Republicans. "It is time for us to stand and fight."

But will the Republicans really stand and fight?

In the past, betting on the intestinal fortitude of the Republican Party has been a loser every single time.

So we'll see.  Boehner insists that this time is different.  Boehner insists that he is not going to fold like a 20 dollar suit this time.  In fact, when he was asked if the U.S. government was headed toward a debt default if Obama continued to refuse to negotiate, Boehner made the following statement...

"That's the path we're on."

The mainstream media has certainly been placing most of the blame at the feet of the Republicans, but at least the U.S. House of Representatives has been trying to get an agreement reached.  The House has voted 26 times since the Senate last voted.  Harry Reid has essentially shut the Senate down until the Republicans fold and give the Democrats exactly what they want.

The funny thing is that this could probably be solved very easily.  If the Democrats agreed to a one year delay to the individual mandate, the Republicans would probably jump at it.  And because of epic technical failures, hardly anyone has been able to get signed up for Obamacare anyway.  So a one year delay would give the Obama administration time to get their act together.

Unfortunately, the Democrats seem absolutely obsessed with the idea that they will not give the Republicans one single inch.  They seem to believe that this will be to their political benefit.

But this is a very dangerous game that they are playing.  The U.S. government must roll over 441 billion dollars of short-term debt between October 18th and November 15th.

If a debt ceiling increase is not in place by that time, it will send interest rates soaring.  Borrowing costs for state and local governments, corporations, and ordinary Americans will go through the roof and economic activity will be hit really hard.

And as detailed above, we could potentially be looking at a financial crash that would make 2008 look like a Sunday picnic.

So let us hope for a political solution soon.  That will at least kick the can down the road for a little bit longer.

If a debt default were to happen before the end of this year, that would bring a tremendous amount of future economic pain into the here and now, and the consequences would likely be far greater than any of us could possibly imagine.


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Tue, 10/08/2013 - 21:04 | 4036506 g'kar
g'kar's picture

Who gives a crap about the global bs, impeach Obama and start to fix our own sorry asses.

Tue, 10/08/2013 - 21:09 | 4036527 Zer0head
Zer0head's picture

12 warnings

brought to you by

goering PR

Tue, 10/08/2013 - 21:10 | 4036529 Arius
Arius's picture

if it was that bad why isnt the stock market even budging?  none from the players with skin in the game seems to be scared at all ... they are happy as clams :) 

besides the same talk was before the government shutdown ... well they brought back almost 85% of government as essential, with interns and some ZH losers remaining in furloughs.

i am skeptic about all this scary talk ... everything will be fine

now we have Advanced Macroeconomic Tools

Tue, 10/08/2013 - 21:18 | 4036538 g'kar
g'kar's picture

"if it was that bad why isnt the stock market even budging?"


The big boys got out already.

Tue, 10/08/2013 - 21:20 | 4036557 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The US gov't is going to default. It is not if, but when. Get it over with. My guess is they knew this was coming and are preparing for the short of the century.

Tue, 10/08/2013 - 21:23 | 4036577 A Lunatic
A Lunatic's picture

Then it is intentional and treasonous........

Tue, 10/08/2013 - 21:38 | 4036641 Troll Magnet
Troll Magnet's picture

i don't believe they'll default. but if they do, it'll be to crash the economy and get all the joo central bankers off the hook as morons will all be too busy blaming the red/blue team who are just muppets.

Tue, 10/08/2013 - 23:10 | 4036882 Keyser
Keyser's picture

Boner has already made the statement that he will not let the US default on it's debt. Everything after that is just theatrics. 


Wed, 10/09/2013 - 01:16 | 4037091 Crisismode
Crisismode's picture

It's all bullshit.


None of these assholes has a clue as to what will happen, and they don't care.

Neither does anybody else.

Life will go on and the polticians will still posture.

Fuck them.


Tue, 10/08/2013 - 22:16 | 4036738 DeadFred
DeadFred's picture

And who do you think will prosecute them?

Tue, 10/08/2013 - 22:38 | 4036800 A Lunatic
A Lunatic's picture

There is always a reckoning........

Tue, 10/08/2013 - 22:59 | 4036829 The Big Ching-aso
The Big Ching-aso's picture

Default, denial, defunct.

Denial, default, defunct. 

Defunct, denial, default.

Any apply anytime and we're still derfucked.



Wed, 10/09/2013 - 00:53 | 4037062 buyingsterling
buyingsterling's picture

The Fed can buy billions in treasuries each month, but it can't pay the interest due on Oct. 18th? If this happens, it will be because they wanted a crash. By the way, all 12 of the sources quoted can suck me, except for Jim Grant. And notice how he's the least hyperbolic of the bunch?

Jim Willie oct. 6th youtube predicts doubling of QE due to foreign bond sales

Wed, 10/09/2013 - 04:46 | 4037218 Tall Tom
Tall Tom's picture



He also said that the Derivative CDS failed in July. That's why the Banksters met with the Sodomite in Chief.


This is all staged theater to distract the muppets, even on ZH, from what is really happening.


Shhhhhhhh...Just short Treasuries and do not let the muppets know.

Wed, 10/09/2013 - 00:53 | 4037057 myshadow
myshadow's picture

NYT  Sunday spelled it out....


? s


In Politics by Robyn PennacchiaOct 8, 2013
The 5 creepiest things about how the Koch brothers engineered the shutdown

This weekend, The New York Times revealed how the Koch Brothers and Reagan Attorney General Ed Meese engineered this here shutdown we’re dealing with right now, and how they’d been planning it ever since Obama was reelected. I wasn’t especially shocked by it, myself. Hell, half of the Tea Party people in the House actually campaigned on it. Which is why I have been annoyed as hell with the whole “Oh, well, it’s really both parties at fault here!” line of reasoning that some people have been trying to take.

Anyway, in case you’re not hep to it, months and months before the shutdown happened, Freedomworks, one of the fake astroturfing groups set up by The Brothers Koch, with the assistance of Reagan Attorney General Ed Meech, created a blueprint for how it was all supposed to go down. They also created a “tool kit” for dealing with it. And they had the chutzpah to actually post these things online, in plain view of god and everyone.

The whole thing gives me the heebeejeebees. So, for your edification, here are the 5 creepiest things about it.

1. The fact that it has been in the works since February.

Just getting this out of the way now, because that is just seriously creepy as hell. The fact that their actual plan was to shut down the government, put people out of jobs, leave kids without HeadStart, and generally just screw everything up for everyone in order to get their own way is absolutely frightening and incredibly selfish. Those people don’t matter? They’re not as important as you? All those sight-seeing veterans you’re so very concerned about–you didn’t think they’d be affected?

2. They actually told people what to Tweet. 

The key hashtags for this week are:





.@Senate_GOPs Stand with @TedCruz! #DontFundIt #MakeDCListen

.@LindseyGrahamSC Your vote for cloture was a vote to fund #ObamaCare #DontFundIt

.@TedCruz & .@SenMikeLee thank you for standing strong. #DontFundIt

Call both of your Senators today 202.224.3121 and ask them to delay #Obamacare. #DontFundIt #MakeDCListen

If all of Obama’s friends deserve #Obamacare waivers, don’t the rest of us deserve a one-year delay? #DontFundIt #MakeDCListen

#ObamaCare isn’t ready for Big Labor, Big Government, or Big Business, so they all got exemptions. What about the rest of us? #DontFundIt #MakeDCListen

Seriously, Tea Partiers. Your organizers think you’re so freaking dumb, and so likely to make spelling errors, that they made you a list of things to Tweet. Don’t you know when you’re being insulted?

3. They not only knew that the Republican Party would be blamed for the shutdown they engineered, they came up with talking points to repeat to the media in order to try to deflect said blame:

1. What happens when you shut down the government and you are blamed for it?
—> We are simply calling to fund the entire government except for the Affordable Care Act/Obamacare.

—> If Congress is willing to defund this terrible law and stand up for the American people, the American people will support them.

This is the exact response members of Congress have been giving to the media. It’s a ridiculous response and makes no sense whatsoever, but they’ve all been repeating it like it made some kind of sense. Now we see why.

The fact that they have been so open about their plans to shut down the government and are now trying to pretend that it’s totally not their fault is a classic example of pissing on someone’s leg and telling them it’s raining–it requires an unimaginable amount of chutzpah.

The first suggested response is basically the same thing as shooting someone during a robbery and then explaining to the judge that it’s really their fault because if they’d handed over their wallet you wouldn’t have had to shoot them.

You know what the second response reminds me of? When Charles J. Guiteau assassinated Garfield, he legitimately believed that he would be hailed as a hero. After he shot him, he yelled “I am Stalwart of the Stalwarts! Arthur is President now!” and he really, truly believed that instead of being sent to jail, he would be showered with praise. While he was in jail, he constantly made up stories about all the fan mail he was getting from admirers who were thrilled and delighted that he had shot the President. Of course, no such mail existed.

Pretending the whole world is on your side does not make it so.

4. This whole spiel about how it’s totally fine that people with pre-existing conditions don’t get to have health care:

3. What about the people with pre-existing conditions who cannot get health insurance without the Affordable Care Act/Obamacare?
—> Health insurance does not equal health care. There are several studies that show that patients on Medicaid have no noticeably improved health outcome over people who completely lack health insurance. After studying 800,000 patients, the study’s authors at the University of Virginia concluded that patients on Medicaid (a program that Obamacare greatly expands) are just as
likely, and sometimes more likely, to die than patients without any health insurance coverage.

Oh! Well then! There you go! I bet that’s why the Koch Brothers themselves don’t have health insurance, and why none of the Congressional Tea Party Republicans have health insurance! And probably why they don’t ever go to a doctor, because you could totally go to the doctor and die anyway, so why bother?

5. The End Game

This is not just about defunding the Affordable Care Act. This is about getting rid of Medicare and Medicaid, it is about privatizing the Veteran’s Administration, it is about getting rid of the EPA, the Department of Energy, the Department of Education. All the things on the Koch Brothers wishlist. Why? Because they’re rich dudes who want to be more rich. And they want the American people to help them. Once all those things are privatized we’ll need corporate solutions to fill the services they provide. And guess who can provide those corporate solutions? The Koch brothers have engineered an entire “grassroots movement” dedicated to helping them get more rich at the expense of the American people. It’s straight up bonkers.

The vision that Charles and David Koch have for America is only good for people who are as rich and powerful as they are. What they are engineering isn’t just a shutdown, it is an America where the rich get richer and the poor get poorer, and where no one has a say in their government unless they have piles of cash.'


Wed, 10/09/2013 - 00:57 | 4037066 buyingsterling
buyingsterling's picture

Was this garbage printed as a news story? Probably.

So there are two business leaders in the entire country that aren't all for total socialism and endless debt and devaluation? And they dare to force the issue on the government's _utter insolvency_? Can't say I blame them. (FU NYT).

Wed, 10/09/2013 - 01:15 | 4037090 CrownedCoke
CrownedCoke's picture

Do you work for ACORN? Damn.

Wed, 10/09/2013 - 02:12 | 4037125 SeattleBruce
SeattleBruce's picture

"NYT  Sunday spelled it out...." - that's where you veered off, right there.

Wed, 10/09/2013 - 03:01 | 4037160 butchtrucks
butchtrucks's picture

Republicans:  Can I burn down your house.

Obama:  No


Republicans:  Ok then - only the second floor.

Obama: No


Republicans:  Ok - just the garage.

Obama: No


Republicans:  OK lets sit down and discuss what we are going to burn down.

Obama: No


Republicans:  'YOU WON'T NEGOTIATE!'

Wed, 10/09/2013 - 04:24 | 4037206 F-Tipp
F-Tipp's picture

While both parties are just as bad, your characterization of this argument is childish at best.

Wed, 10/09/2013 - 04:55 | 4037224 butchtrucks
butchtrucks's picture

If you really believe that you are beyond childish - infantile in fact.


Wed, 10/09/2013 - 04:27 | 4037207 lakecity55
lakecity55's picture

Anytime the lead involves the coke bros, I know it's a progressive shill at the other end of the wire.

Wed, 10/09/2013 - 08:22 | 4037402 GMadScientist
GMadScientist's picture

Plant ^^

Wed, 10/09/2013 - 06:04 | 4037258 FreeNewEnergy
FreeNewEnergy's picture

Nah, see her, now, the Koch brothers don't want to privatize everything because they're rich and greedy and want more for themselves, though, surely, that's a part of it. They want to get rid of these social programs because they don't work and they're too expensive. SS and Medicare/Medicaid are BROKE, they suck money out of the lives of millions and they are "social" programs, as in SOCIALISM, which has no place in a democratic, capitalistic society.

Without Medicare/Medicaid, would the poor just die because they couldn't afford health care? NO. The free market, if allowed to operate without restriction, would handle their health needs to a very large extent.

Here, for all the dumbasses who think we can't go on without Medicaid, is a simple example: Suppose there was a big flea market and there is one guy buying and selling used LPs, but he'll only take those in excellent, near-mint condition, turning away all the people who had perfectly good vintage LPs that were anywhere from OK to really beat up. These people just keep walking away, shaking their heads. They wanted a little money for their records, but this guy would give them nothing. And, another guy starts buying and selling near-perfect LPs, turning away the rest. WHAT WOULD A CAPITALIST DO?

There's an empty space at the flea market, and a smart businessman, sets up a booth and starts buying all the not-so-perfect LPs for a little money, and the sellers are happy. Then he starts selling them at a decent profit, and buyers are happy. The businessman isn't making as much as the other dealers, maybe, but, he's doing OK.

Same for health care. The rich will get the best health care their money can afford and people will fight cats and dogs to get their business. Underneath that is this whole huge untapped market of people with limited means who need health care. Not the best in the world, just adequate, affordable health care. WHAT WOUDL A CAPITALIST DO?

It's a no-fucking-brainer. Get the fucking government out of the way and the free market will solve everything. If the health care system fell apart tomorrow, you can bet yer ass that the next day there would be people scrambling to set up clinics, complete with doctors, nurses and payment plans for the literally millions of people who need care (notice, NOT "coverage"), and I'd probably be one of them, because doctors are doctors, not businessmen. They need businessmen and women to help run the business, fund it, advertise the business, and grow it.

The government screws up business in this country on a daily basis and charges for the fuck-up. Crash the system and Americans will build a better one in six months or less.

Fucking socialists.

Wed, 10/09/2013 - 07:18 | 4037315 butchtrucks
butchtrucks's picture

At first I thought this was some sort of parody - but then it dawned on me - you actually beliveve the shit you are writing! It really does make me despair for the US education system, No wonder the country is in such trouble.

And BTW - can you please stop sucking the Koch brother's Kocks - it's downright unseemly. 


Wed, 10/09/2013 - 08:26 | 4037415 GMadScientist
GMadScientist's picture

1) Healthcare isn't a flexible commodity like LP records (please, give me a reason to show you why!)

2) The Koch Bros don't give a rat's ass if it works or doesn't as long as they can make a buck at it (especially if that buck would've been made by someone else for less)

3) The free market is a tool, but not one that can solve every problem on Earth

Fucking idiot "capitalists"; you deserve your masters, your leashes, and your lot in life.

Wed, 10/09/2013 - 07:19 | 4037316 jughead
jughead's picture

Fact:  The House sent multiple CRs to the Senate, each a compromise over the previous, each voted down by the Senate...including one that called for conference.

You paid partisan hacks from both parties are morons. 

Tue, 10/08/2013 - 21:39 | 4036638 FL_Conservative
FL_Conservative's picture

Monthly tax receipts are sufficient to continue to pay the interest on debt service and failure to raise the debt limit doesn't preclude rolling over maturing debt.  Consequently, there should not be a default.  However, government spending other than social security and medicare/aid would be close to nil.  So all the fire and brimstone about "default" is just theatrics to excite the ignorant.

Tue, 10/08/2013 - 22:19 | 4036753 DavidC
DavidC's picture

Spot on.

Apparently tax income will cover interest payments ten times over. Default only occurs if the interest payments aren't paid, hence there will be NO default.

Kabuki theatre.


Wed, 10/09/2013 - 03:00 | 4037155 SeattleBruce
SeattleBruce's picture

"Consequently, there should not be a default."

The USG may not automatically default on its debt immediately, but it would not be able to extend its borrowing and continue its deficit spending - which has been massive - like a trillion $$+/year since obama got elected.  So there would be an immedate 25% reduction in goobermint spending capacity at the rate of approx. 1 Trillion - which is 1/16 of the entire US economy.  Futhermore, all the other obligations, invoices and debts owed by the government to millions of businesses would be affected, as they got shuffled around and as the government was forced into their 25% haircut.  Robbing peter to pay paul would be happening all over the place - and many, many will not get paid on time, if it drug out - meaning the USG would begin massively defaulting on its contractual obligations with businesses all over the place.  How will that affect T-bill/interest rates, and viscous circle, the interest obligations of the defaulting USG?  Finally, you've got to believe that federal departments would start to triage and fight for who is more vital, more essential, more necessary - food stamps or F35s - etc.

Anyhow, while the debt interest payments may not default, if it drags on, there will be a lot of defaulting going on.  Clearly, the USG has massively over-obligated itself.

While this would force a kind of fiscal sanity - right into the heart of our insane federal governement - it's just too much, and the pressure will be unbelievable to stop.

Besides - it doesn't address the true source of our pain/evil  -the Federal Reserve and its bank sponsors, and fiat/debt based money.  And so they'll fold - the question is  - when?

One day - in the not too distant future - there will be no choice to simply "raise the debt ceiling" to "save" the economy - as the markets themselves will collapse under the ponzi scheme of fiat/debt based money and banksta/wall street greed played out over the last century.  Prepare accordingly.  This is just a little taster of that day to come.

Wed, 10/09/2013 - 05:19 | 4037241 Tall Tom
Tall Tom's picture

What a failure of Raising the Debt Ceiling will do is to force is the Federal Reserve to increase MBS Purchases from the Government. Since the Government "owns" the MBS they can sell them to the Federal Reserve Bank in order to raise Revenues. It has a willing buyer, the Federal Reserve.


And they nominate Janet Yellen today as she will be more than a willing stooge to do this.


Since Treasuries cannot be sold as the Government has no authority to create new debt it does allow that the Government can sell "assets", toxic or not. So the Federal Reserve will be purchasing Treasuries from Foreigners and Private Owners. The Federal Reserve will be purchasing only MBS from the Government.


So QE must increase. There will be no taper. And Interest Rates on existing Treasuries should decrease as no new debt is being issued. The Dollar will STRENGTHEN as a result. (Everything that is opposite of what is expected.) These will be the Short Term results. This will be the final deflation before the Hyperinflationary inferno.


Get ready for a Quantitative Easing increase as the Fed increases its Balance Sheet with these Toxic Assets. This is a Cancer and the Government is eating itself from the inside out instead of getting its Fiscal House in order.


WHEN it implodes it will be spectacular. (It is no longer a matter of IF) Long Term it is guaranteed. They are taking the steps now to ensure it.


Prepare accordingly.

Tue, 10/08/2013 - 21:22 | 4036568 Fish Gone Bad
Fish Gone Bad's picture

Its important to live off of someone elses's dime.  NOT.

Tue, 10/08/2013 - 22:09 | 4036720 Son of Captain Nemo
Tue, 10/08/2013 - 22:45 | 4036815 Kirk2NCC1701
Kirk2NCC1701's picture

Brought to you by Goebbels Media Group.

Tue, 10/08/2013 - 21:31 | 4036607 zorba THE GREEK
zorba THE GREEK's picture

No pain, no gain. Let the defaults begin.

Tue, 10/08/2013 - 21:37 | 4036629 Son of Loki
Son of Loki's picture

So is it still, "The best time ever to buy a house"?

Tue, 10/08/2013 - 22:15 | 4036733 Pure Evil
Pure Evil's picture

Yes, I've got a 15 sq ft cardboard box under an interstate bridge I'd like to sell ya.

Tue, 10/08/2013 - 22:19 | 4036747 DeadFred
DeadFred's picture

Location, location, location. Which interstate, near the edge or in the most sheltered part, view of a river or just another stupid highway?

Tue, 10/08/2013 - 22:36 | 4036789 Pure Evil
Pure Evil's picture

You pick the spot, I'll supply the cardboard box.

Did I mention it has indoor plumbing and walk-in closets?

And a loft you can turn into a home office for all those drug transactions you'll be making.

Wed, 10/09/2013 - 02:55 | 4037151 CheapBastard
CheapBastard's picture

OMG, Loki! Yuo're gonna be priced out of th emarket if you don't jump in quick and grab something, anything. I mean you still have time, Loki, since houses are only up 300%-400% above normel at this point.

If you don't act  NOW, prices could revert to the norm and drop 50-60% back near normal, and you'd miss out.

Tue, 10/08/2013 - 22:17 | 4036742 Bananamerican
Bananamerican's picture



"A default would....make our banks insolvent"

"I'll have one McDebt Default sandwich with government cheese please..."


Wed, 10/09/2013 - 01:04 | 4037078 buyingsterling
buyingsterling's picture

The markets are a joke. A sane system would ban every financial instrument that looks like a 'bet' and doesn't represent actual physical ownership of actual physical property.

Wed, 10/09/2013 - 05:31 | 4037244 Tall Tom
Tall Tom's picture

They will NOT increase the Debt Limit.


There will be NO DEFAULT in the Short One to Three Years..


The Federal Reserve just accelerates the MBS purchases from the Government.


QE increases.

Tue, 10/08/2013 - 23:43 | 4036957 FutureShock
FutureShock's picture

Obama has zero experience in any negotiating, budgets etc. Never a governor, nor a Mayor, or a business owner. This is the problem and the media fails to make this point. You can be book smart but anyone who is good at what they do has experience. He has a clue and is not stupid  but has no honed skills and past history to have learned from. Too bad this did not happen in the first term. Get Trump over there in the middle, he will negotiate the deal in a couple hours. 

Wed, 10/09/2013 - 01:27 | 4037098 Crisismode
Crisismode's picture



He couldn't scrape the feces out of his pants with a wet towel.

After he shit his pants, that is.


Wed, 10/09/2013 - 03:06 | 4037163 Canoe Driver
Canoe Driver's picture

And here we have yet another rube who thinks Obama runs the country.

Wed, 10/09/2013 - 09:35 | 4037175 fredquimby
fredquimby's picture

In Barry's speech he used the phrase "Govt. shutdown" but he also tried to introduce us to a new meme of "Economic shutdown".....

I reckon they are going to go for it and default, even if only for a day or two, just to show the 'merican people how damn important the USG should be to them and how, pretty please, will they now please, please, come back to work and keep paying the bills (and the food stamps and the unemplaoyment benefits) for everyone.



P.S Always think it funny Americans say:

He has a clue and is not stupid

He hasn't got a clue, as we say in UK, seems to make much more sense to me?! :)

Edit: just saw: "He could care less" below. So he could care less than he does now then?!?! Or is it he couldn't possibly care any less than he does now??!!


Tue, 10/08/2013 - 21:04 | 4036510 ShrNfr
ShrNfr's picture

Obama does not feel other's pain. He could care less. He has a tee time to make. Anyway, his 50 million buck house in Hawaii is waiting for him along with his pension checks. Speaking fees will pay for a lot too. It's good to be king if you the king, for us serfs it is another matter all together.

Tue, 10/08/2013 - 21:06 | 4036512 pot_and_kettle
pot_and_kettle's picture

My thinking is that if all of these dire warnings are out there, digested, then countermeasures to the above scenario are ready to be deployed. 


Whether those countermeasures involve expropriation or martial law is another story entirely..

Tue, 10/08/2013 - 21:06 | 4036513 fonzannoon
fonzannoon's picture

This guy Snyder takes the cake as the worst piece of garbage on this site, and I really think Simon Black is a giant piece of garbage. 

Tue, 10/08/2013 - 21:24 | 4036585 Brett Merkey
Brett Merkey's picture



@ fonzannoon,

Why do you say that? Not challenging, just asking. Usually I don't particularly like Snyder's numbered lists, but this one seems informative with solid links.



Tue, 10/08/2013 - 22:12 | 4036612 Pure Evil
Pure Evil's picture

It would be interesting to see what happens.

After all they said the world would end if they imposed sequestration.

Just because a bunch of over paid douche bags are running around like a chicken with its head cut off doesn't mean the sky is falling and we're suddenly going to be up to our necks in chicken heads.

Tue, 10/08/2013 - 23:17 | 4036903 andrewp111
andrewp111's picture

The difference this time is that Obama can actually make a maximal disaster happen. The trick is to do it without having his fingerprints all over it.

Wed, 10/09/2013 - 05:41 | 4037247 Tall Tom
Tall Tom's picture

There will be no deal to raise the Debt Limit.


There will also be NO DEFAULT in the next one to three years.


The Federal Reserve Bank will just increase the MBS purchases from the US Government to offset any Treasuries that were to have been sold by the US Government. Furthermore the US Government can use that Revenue from the MBS sales as the capital to refinance the rollover of near term Bonds that is approaching.


QE increases, accelerates exponentially, accordingly, as the Federal Reserve Bank asset sheet swells. See how the Shell Game is played?

Tue, 10/08/2013 - 21:38 | 4036636 fonzannoon
fonzannoon's picture

He has never had an original thought. His articles are just a list of regurgitated quotes from others. He just sells the fear of the week. The 10yr yield, the U.S default now etc. etc. He takes whatever headline is in the msm, pulls up a bunch of quotes from the typical list of names, makes his standard "15 reasons why someone will eventually put flaming poop on your doorstep"  and get's it put up on a few different sites. I put more effort into my 10th grade marine biology homework. 

Tue, 10/08/2013 - 21:46 | 4036669 Brett Merkey
Brett Merkey's picture



Thanks. No argument here. Altho "the worst piece of garbage" here at ZeroHedge seems a lot finer stuff than what we have to wade thru reading the NY Times business section every morning. That paper is not to be read for relevance and truth but it does give a good gauge for what type of lies they want us to swallow. I call this meta-information.  :-)




Tue, 10/08/2013 - 21:51 | 4036684 Arius
Arius's picture

exactly.  you might add to that list besides NY Times the rest of them ... WSJ, washington post etc. etc. not to forget the financial tv stations such as our own CNBS ...

Tue, 10/08/2013 - 21:52 | 4036686 Pure Evil
Pure Evil's picture

I'll take the flaming bag of poop for $2000 Alex.

Tue, 10/08/2013 - 23:41 | 4036949 Anusocracy
Anusocracy's picture

Barney Frank costs 2000 bucks?

Wed, 10/09/2013 - 05:48 | 4037250 Tall Tom
Tall Tom's picture

I understand your confusion between Barney Frank and Barack H Obama as they are both flaming faggots. But, next time, you must come up to speed....

Tue, 10/08/2013 - 22:22 | 4036755 wisehiney
wisehiney's picture

Some of these fuckers are undercover wall street operatives. Psyching out the shorts again just to squeeze them all the way into Christmas. Don't fall for it. I don't know that it will work this time, but the potential set up is there. First, a pop rally upon "resolution" of debt ceiling, then shorts throw remaining ammo at it, then "Oh Fock!" equities slowly squeeze up from there to the happy Santa rally. 

Tue, 10/08/2013 - 22:45 | 4036821 Meat Hammer
Meat Hammer's picture

Yeah, Fonz, he lost me at...

So a one year delay would give the Obama administration time to get their act together.

and a little more at...

So let us hope for a political solution soon.  That will at least kick the can down the road for a little bit longer.

Wed, 10/09/2013 - 05:51 | 4037254 Tall Tom
Tall Tom's picture

Yeah. Wasn't that hilarious? Haven't they had five years already?

Wed, 10/09/2013 - 00:28 | 4037034 Ineverslice
Ineverslice's picture



(see above fonzanoon posts)

Wed, 10/09/2013 - 02:31 | 4037136 kareninca
kareninca's picture

I always feel unclean after reading Snyder's lists.

But I read them anyway!!!

The comments afterwards are often good.

Tue, 10/08/2013 - 21:42 | 4036660 Calmyourself
Calmyourself's picture

Tax receipts are enough to pay the interest and then some, the ONLY WAY we default (not pay interest on our debt) is by designed malice, thats it..  Not to minimize the damage it will do otherwise but default must be a CHOSEN policy.

Tue, 10/08/2013 - 21:07 | 4036515 SheepDog-One
SheepDog-One's picture

Legalized organized crime.

Tue, 10/08/2013 - 21:11 | 4036516 rtalcott
rtalcott's picture

Let's do the experiment and see.

'effing Buffet?  Think he is talking his book along with most of the rest of them?  And what have these brilliant minds gotten right so far? Why should I believe them now?

Tue, 10/08/2013 - 21:14 | 4036539 edwardo1
edwardo1's picture

Not making an interest payment would be by design, because they have the funds to make the interest payment. This is all a nonsense.

Tue, 10/08/2013 - 21:23 | 4036574 A Lunatic
A Lunatic's picture

I'm sure Buffet would just hate to have to rake in another 10 billion on the next round of "collapse"........

Tue, 10/08/2013 - 21:12 | 4036525 lasvegaspersona
lasvegaspersona's picture


China's request for the US to ensure the safety of Chinese investments."

too funny

if China has not figured out that they will never get 1.2T in current value of goods and services they don't deserve to get them...

Surely this is theater. The Chinese are just playing along, perhaps to improve timing.

or...less likely...this is going to be THE BIG ONE!!! and all actors are on their marks.

Tue, 10/08/2013 - 21:12 | 4036531 kwatinhu
kwatinhu's picture

I agree with pot and kettle, if the great minds in the financial world really believed this was possible, they have already made sure their bets are covered. And you can bet your ass, somebody has already figured out how to make a pile of cash out of this.

Tue, 10/08/2013 - 21:11 | 4036535 fonzannoon
fonzannoon's picture

I have been searching all day to find out how Dick Bove feels about all this.

Tue, 10/08/2013 - 21:18 | 4036555 Croesus
Croesus's picture


A "5 minutes to midnight" solution will be reached, and "all will be well again"...the sheeple will cheer at the effectiveness of our "benevolent leaders' teamwork", and many of them will be re-elected.


Tue, 10/08/2013 - 21:22 | 4036573 fonzannoon
fonzannoon's picture

Croesus do you still feel strongly about your October prediction? I would put more trust in you than this author.

Tue, 10/08/2013 - 21:30 | 4036603 The Shootist
The Shootist's picture

I'm still waiting for Gartman to tell me how to play it.

Tue, 10/08/2013 - 21:38 | 4036644 fonzannoon
fonzannoon's picture

He is still long paper gold in vietnam dong

Tue, 10/08/2013 - 21:45 | 4036664 Croesus
Croesus's picture

@ Fonz:

I've been in the same camp as most "crystal ball gazers"...making sound judgment calls, based on what I feel are reliable facts and information. Despite being well-thought out, and reasonable, I've only been partly right, but plenty wrong, too. 

Like everybody else, I continue to underestimate the ability of TPTB, at "keeping the show together"; Every time I think "The Grand Finale" is about to happen, they somehow manage to pull another rabbit out of the hat.

My point is, I've given up trying to assign a date to D-Day. A lot of the stuff on the original Sept-Oct list happened earlier-than-scheduled (such as Napolitano's resignation), or 'right on schedule', but the "actions" didn't lead to the "reactions" that I thought would play out, and somehow TPTB keep managing to buy themselves some time.

By itself, it shows some sense of desperation on their part, but it also shows that they're still not out of options.

(I'm starting to wonder if I'm a contrarian indicator...)

I told a friend via email, that I'm still thinking "something" is going to happen this year...but only because I'm a stubborn bastard who hates being wrong...




Tue, 10/08/2013 - 21:55 | 4036690 Pure Evil
Pure Evil's picture

Something did happen. Janet Yellen got nominated then confirmed by the Senate.

That flaming bag of poop on the front porch is looking better and better.

Tue, 10/08/2013 - 22:00 | 4036701 fonzannoon
fonzannoon's picture

Thanks for the reply Croesus. 

Wed, 10/09/2013 - 06:09 | 4037257 Tall Tom
Tall Tom's picture

The rabbit out of the hat...


There will be no deal to increase the Debt Limit. It will not happen.


Yet the US Government will not default.


The Federal Reserve will increase the MBS purchases (assets, Toxic assets at that) from the US Government at an accelerating rate in order to finance the Rollover of current Treasury Notes due. They also increase MBS purchases from the Government so that they can continue spending at ever increasing levels.


QE increases. Janet Yellen is the perfect stooge in order to affect these policies. Of course this is accelerating a collapse in the long term.


I feel like Bullwinkle. "Rocky. Watch me pull a Rabbit out of the hat"

Rocky replies, "Oh not again", as I pull out a devouring Lion.

Tue, 10/08/2013 - 22:26 | 4036760 Son of Captain Nemo
Son of Captain Nemo's picture

Yes and to celebrate the guys and gals on the Hill have already started the "Party" Yellen will be the MC if it's still closed on Friday. 

Someone needs to find Prince and send him to D.C. so that he can do the honors "Like it's 1999".

Should make everyone in this Country's blood boil -but it won't!


Tue, 10/08/2013 - 22:57 | 4036846 Kirk2NCC1701
Kirk2NCC1701's picture

I think you've captured nicely what many of sentiments and thoughts.

Wed, 10/09/2013 - 10:01 | 4037678 SquirrelButtDan
SquirrelButtDan's picture

May-hap-so. It is the 100 year anniversary after all, isn't it? They love anniversaries. 

Tue, 10/08/2013 - 21:13 | 4036540 Rehab Willie
Rehab Willie's picture

go long soup kitchens

Tue, 10/08/2013 - 21:19 | 4036560 Bosch
Bosch's picture

I mean god fucking forbid there was some actual risk priced into the market. 

Tue, 10/08/2013 - 21:21 | 4036561 RSDallas
RSDallas's picture

And if the U.S. government is eventually forced to start delaying interest payments on U.S. debt (which could potentially happen as soon as November), that would be absolutely catastrophic.

I stopped right here. There will be no delay in interest payments and I wish everyone would quit using that term default. Anyone using the term default us working for the Democratic Party.

The US brings in a little over 100 billion in tax receipts per month and we pay a little over 32 billion a month in interest payments. That is hardly a revenue shortfall! The only way the US defaults us if we miss an interest (bond) payment. So what will happen?

The US will be forced to live within our budget, which is what we should be doing! That is it! So will some government programs go away? yes, and thank God for that. How many of you reading this spend more than you earn? Enough said. Please call your representative (house and senate) tomorrow and ask them to please not negotiate anything with Obama.

Tue, 10/08/2013 - 21:37 | 4036628 Pure Evil
Pure Evil's picture

Please stop bringing facts to the table, we're trying to get a debt ceiling raised here so that Janet "Print Moar" Yellen can live up to her name.

Tue, 10/08/2013 - 22:42 | 4036812 Son of Captain Nemo
Son of Captain Nemo's picture

'RSDallas' Well said +100

You would never know we were in trouble if you saw the way they are taking time off to Party on Capitol Hill during this "shutdown".  My thread further up.



Tue, 10/08/2013 - 21:21 | 4036562 gbresnahan
gbresnahan's picture

b..b....but the gubmint is tbtf

Tue, 10/08/2013 - 21:21 | 4036564 jharry
jharry's picture

President Obama will raise the debt ceiling with or without Congress.  He won't let it occur and rightfully so.  Too many people will be hurt.

Tue, 10/08/2013 - 21:38 | 4036635 Pure Evil
Pure Evil's picture

Is that you Harry Reid?

Tue, 10/08/2013 - 22:30 | 4036777 wisehiney
wisehiney's picture

mighty kragquest will protect you

Tue, 10/08/2013 - 22:36 | 4036798 samsara
samsara's picture

Yer right.

We Gotta Do It for the Children !

Wed, 10/09/2013 - 01:03 | 4037072 yepyep
yepyep's picture


and yeah cause tomorrow is never gonna happen right?

just party like its 1999 till the lights go out.

Tue, 10/08/2013 - 21:20 | 4036566 A Lunatic
A Lunatic's picture

Consider the source(s). Burn this fucker down. Fuck the fear-mongering 1% who are the only ones with everything to lose..............

Tue, 10/08/2013 - 21:25 | 4036586 Croesus
Croesus's picture

@ A Lunatic:


Tue, 10/08/2013 - 21:22 | 4036569 29.5 hours
29.5 hours's picture


Bloomberg quoting from ZeroHedge? Another sign that times are getting interesting again.


Tue, 10/08/2013 - 21:20 | 4036570 MeBizarro
MeBizarro's picture

How was it become popular history now even among the supposedly ubereducated that Lehman's bankruptcy somehow was the 'smoking gun' that sent the US economy into a real downward spiral in '08.  That is just largely BS yet it has become widely accepted as truth from the articles I see & read on a Treasury default.

Tue, 10/08/2013 - 21:42 | 4036657 Bollixed
Bollixed's picture

Lehman's bankruptcy is just the time stamp widely accepted as the moment when the shit smell was too strong to ignore. Sheeple need 'cause and effect' to rationalize the 'what, where, why'. So the Lehman bankruptcy serves that purpose since in many people's minds it was the first domino they can remember falling.

Not that it was the first domino to fall, only that people have very short attention spans and most have no idea how the system works to begin with.

Tue, 10/08/2013 - 21:23 | 4036571 dick cheneys ghost
dick cheneys ghost's picture

''we could potentially be looking at a financial crash that would make 2008 look like a Sunday picnic.''

I love sunday picnics.......


Tue, 10/08/2013 - 21:24 | 4036584 A Lunatic
A Lunatic's picture

I'll bring the potato salad.........

Tue, 10/08/2013 - 21:25 | 4036580 JR
JR's picture

This country is on the wagon trail to extinction - because of the Federal Reserve.

While the Internet remains free, it must be said that these owners of the Fed are operating on a philosophy that has destroyed societies and countries on several continents over the past two and half centuries.   It is a philosophy of financial tyranny and national money debt whereby the bankers surrender nothing at all and which it is physically impossible for the nation ever to repay; whereby financiers work with government officials to, first, enable the leaders to achieve their personal goals and, then, begin to gain control over those officials.

It is a way in which “thin-air” banking controls governments and societies for its own benefit.

It happened in the monarchies in Europe, it happened in Russia beginning in 1917, it happened in England, it happened in South Africa and Rhodesia and the the Balkans, it is happening in occupied Palestine and parts of the Middle East and, now, it has happened here.

From its inception on this continent in 1913, the owners of the Federal Reserve began to overtake presidential administrations, starting with the Woodrow Wilson administration. It only deepened with the financing of world wars and domestic policy and with the elections and monetary support of favored congressmen, helping to keep in office those who delivered the payoff largesse to Fed lobbyists and their selected enablers.

It has now culminated in the current administration - led by a leader elected by mob rule, much of that mob having been and now being imported for that purpose.

Surely the events during this government slowdown demonstrate the raw power and the arrogance that these tyrants have turned against the American people, punishing them by redistributing and devaluing their wealth for the bankers’ own personal gain, stripping them of the land and prosperity that was to be their children’s inheritance.

First, the Fed merely operated parasitically, taking an increasing share of America’s industry, commerce and labor; but in recent decades its parasitic operations have turned into a complete dictatorship, into a supranational power, controlling all major branches of government and the media, until America has found herself impoverished in the midst of her land of plenty.

Where is the next step?

With the appointment of Janet Yellen, following the trail of Greenspan and Bernanke as superintendent of the international banking families’ will, it is past time to identify the root of this systematic exploitation that is conquering a nation, and strip it of its power to monopolize national social credit and thus control the basic activities of all American life.

If it is anti-Semitic to say that not only are these primary owners of the Fed Jewish, but that they are following the historic government approach of 2000 years of Jewish philosophy, namely Communism and its total control of virtually all publications, the Press and broadcasts to prevent the truth regarding its enslavement of peoples, then so be it.

If America cannot stop the abuse of this present economic system that has created the gravest economic crisis ever to envelop the world by ending the Federal Reserve system, then who?

Tue, 10/08/2013 - 22:00 | 4036700 MiltonFriedmans...
MiltonFriedmansNightmare's picture

The problem actually began long before the birth of the Jekyll Island DevilChild, namely on March 27, 1861 when the Southern states walked out and Congress adjourned Sine Die, literally without day. Congress ceased to exist as a deliberative body. On April 15' 1861, Lincoln signed Executive order 1 and the US has been ruled by executive fiat ever since. Congress? No hay banday, it is all an illusion.; political theatre if you will.

Tue, 10/08/2013 - 22:04 | 4036706 olto
olto's picture

Please, JR

American people are the people of North, Central, and South America.

The people of the US of A are American people, also.

I only take exception with this miniscule line in your post.

Thank you for posting; i enjoy your ideas

Tue, 10/08/2013 - 23:11 | 4036883 Kirk2NCC1701
Kirk2NCC1701's picture

JR, your thesis would be stronger if you replaced one word. Substitute Communism with Feudalism.

The former has been around a lot less time than the 200+ year banking problem you describe. Bankers LOVE aristocracy. Even Zionism's founder was a huge proponent of monarchy.

This way, if they do succeed in using Central Banking to control the world, they can annoint their own king on King David's throne.

Wed, 10/09/2013 - 05:49 | 4037252 falak pema
falak pema's picture

he also omits that the people who run USA today were all 'imported'; a time line based on massive land expropriation under the gun from the original Amerindian.

So the premise of US corruption beginning in 1913, is a simplification. The "banker" instinct of predatory western civilization began with the Crusades; under God wills it ;  (those Templars were the CIA and WS of that age and they got their come uppance both in Holy Land in 1291 and in France, lead hegemon of that age, in 1314).

It continued, this predatory urge of western man, under the Papal flag with the Conqusitadors, which led to birth of USA etc. etc. etc. History is all interlinked but there are certain periods when it accelerates. 1913 and what followed was one of them. As 2008 probably will be again. 

Tue, 10/08/2013 - 21:25 | 4036582 lasvegaspersona
lasvegaspersona's picture

All the big guys who will talk have admitted a dollar collapse is if you knew it was coming (soon) and you were in charge and you knew it could happen in an unpredictable way what would you do?

We know they can't just announce 'a new money system...btw..your money is now worthless'...non but they could try to make the timing look right and even get some control if they gave it a tiny push.

That way they could control the blame.

Probably they must let it happen organically but I would not doubt they have given some kind of planned demise at least some thought.

Tue, 10/08/2013 - 21:25 | 4036583 luna_man
luna_man's picture





 like waiting up for santa claus, like a kid again

Tue, 10/08/2013 - 21:31 | 4036587 AL_SWEARENGEN

For the most part it sounds like a lot of rich financial cocksuckers worried that their standard of living would actually be shaken.  Meanwhile the 99% get to start over - free from debt ultimately, and free from the Fed's confetti.

Tue, 10/08/2013 - 23:27 | 4036924 SonOfSoros
SonOfSoros's picture

I look forward to the chance of setting up my very own Standard oil.

Tue, 10/08/2013 - 21:26 | 4036592 superflex
superflex's picture

Yes, Let's kick the can once again.  What a fuckin pussy solution.  Let someone else feel the pain.  I need mine now.


Tue, 10/08/2013 - 21:27 | 4036597 TaperProof
TaperProof's picture

we will not default, i'm not convinced after the 17th would mean an official default either.. we would need to stop paying our interest rather than truly furlough workers and cut spending.  

Tue, 10/08/2013 - 21:33 | 4036613 The Shootist
The Shootist's picture

US cash would last far past X day.

Tue, 10/08/2013 - 21:27 | 4036601 dick cheneys ghost
dick cheneys ghost's picture

''So let us hope for a political solution soon.  That will at least kick the can down the road for a little bit longer.''


WTF?? more can kicking........bring it down

Tue, 10/08/2013 - 21:30 | 4036604 lolmao500
lolmao500's picture

If a debt ceiling increase is not in place by that time, it will send interest rates soaring.

Says who? Common sense? Common sense has abandonned markets long ago.

Tue, 10/08/2013 - 21:31 | 4036606 are we there yet
are we there yet's picture

There was this story about a boy who cried wolf over and over till no one cared or believed him.

Tue, 10/08/2013 - 21:30 | 4036608 Atomizer
Atomizer's picture


Dave Chapelle: why terrorists won't take black people as hostage.


Tue, 10/08/2013 - 21:31 | 4036611 Lord Lucan
Lord Lucan's picture

Let it fail. De link the global financial system. The US needs to sort itself out. The ROW does not want to be held hostage to the US.

Tue, 10/08/2013 - 21:35 | 4036625 Shibumi2
Shibumi2's picture

Bread and circuses...


funny how the same financial "experts" who got us here are the ones called upon to explain the ramificaions

Tue, 10/08/2013 - 21:37 | 4036627 Ned Zeppelin
Ned Zeppelin's picture

What an assemblage of complete nonsense. ZHers know this debt default threat is nothing but talk and complete merde at that.

Send this fear mongering to the unquestioning mass media outlets where it belongs.

Tue, 10/08/2013 - 22:13 | 4036732 JR
JR's picture

+100. It's Obama Media Regime propaganda.

The United States is not going to default; the tax money that’s coming into the Treasury “vastly exceeds the interest that has to be paid on the national debt.” The U.S. can easily continue to pay its interest and must redeem its bonds. It’s in the Constitution.  And it will continue to issue new bonds to replace those.  Just ask Miss Janet; she’ll print…and print…and print…  No problemo.

The reason Obama won’t negotiate, he doesn’t want to cut spending; he refuses. That’s why the bankers love him. He wants that extra $85 billion a month allowance. He doesn’t want a future Congress to regain the nation’s rightful prerogative to issue its own interest-free money. He's a Fed puppet. That’s why he’s blaming the Republicans for wanting a debt limit.

Or as his cohort, Robert Mugabe, put it in Zimbabwe: “Some people are contriving ways and means of making us collapse.”

Tue, 10/08/2013 - 22:24 | 4036757 DavidC
DavidC's picture

Ned and JR,
Spot on.


Wed, 10/09/2013 - 05:35 | 4037239 falak pema
falak pema's picture

there are only TWO OBJECTIVE criteria for judging the issue of this Pax Americana world construct :



Without both these conditions being avoided the current FIRE asset levitation worldwide, the source of paper Caymanista wealth stash, cannot go on. As THEN we hit the QE infinity government (and private sector as interlinked) Bond interest rate Rubicon, as inflation will make money print hit the efficiency asymptote. When 10 yr yields go north of 3.5% we hit that G spot. And then the stock market goes WHOOSH down to half, nay 40% of current value. And the resultant financial tsunami ...well you know what I mean if you read ZH. Nobody knows where it will take us. 

The current two headed US government/congress;  red-blue all part of corrupt Oligarchy; cannot save both the Oligarchy ongoing financial scam and the entitlement debt spiral momentum, mutually incompatible. In the face of more expensive energy which fuels REAL economic growth. 

Something has to give and it looks like it will in 2014-2015 deadline.

By the looks of it the OBama admin. is also saying to its allies : WW3 does not look like a good option for us in the US. Thats the message coming from Syria today. I hope nothing changes on this front but in the current environment you can never tell! 

Play on Pax Americana, ride us into to sea of financial froth and then...who knows what may happen! 

I don't. 

Tue, 10/08/2013 - 23:15 | 4036900 Kirk2NCC1701
Kirk2NCC1701's picture

Don't be so "linear". The Fear Mongering is a means to an end: Control, and Positioning (for 2014 elections).

As such, it is ABSOLUTELY relevant to us on ZH.

Tue, 10/08/2013 - 21:36 | 4036631 kragsquest
kragsquest's picture

A really serious and well thought out article followed by the usual cranks and profane maniacs talking about how they want disaster. This reminds me sometimes of the Valdez ship in Waterworld presided over by the captain with the patch over one eye. 

Tue, 10/08/2013 - 21:41 | 4036652 A Lunatic
A Lunatic's picture

Most here want economic freedom and prosperity and a level playing field, (things which are not even remotely possible as long as the status quo is maintained) and care not for the predictions of neither fools or ghouls.........

Tue, 10/08/2013 - 21:44 | 4036661 Lord Lucan
Lord Lucan's picture

So you were the one who sat through waterworld.

Tue, 10/08/2013 - 22:01 | 4036672 Pure Evil
Pure Evil's picture

So a guy that endlessly quotes a bunch of economic fools that sound like hysterical little girls is a "really serious and well thought out article"?

Are you part of the army of paid trolls from PlanetO?

Tue, 10/08/2013 - 22:29 | 4036769 wisehiney
wisehiney's picture

Being prissy will not save you.

Wed, 10/09/2013 - 01:09 | 4037081 yepyep
yepyep's picture

yes we should do the most we can to protect the status quo and the current system that is economically enslaving us.

we dont want disaster, we want sound money and accountability.

Tue, 10/08/2013 - 21:38 | 4036632 FieldingMellish
FieldingMellish's picture

blah blah blah... crush gold... all is well.

Tue, 10/08/2013 - 21:37 | 4036639 notadouche
notadouche's picture

With all of these economist and "brilliant" minds forecasting financial armageddon, which most didn't seem to see in 2005-06 when it was staring them in the face leads me to believe the consequences maybe much more dire for them personally than for the ordinary citizen.  "...if confidence in financial markets is shaken...."   Really, who has confidence in our financial markets now outside of the few "insiders" that manipulate and control those markets.  The rest of us look at it and lost our confidence in these markets years ago.  

What exactly do the republicans have to lose?  The media, the Senate, the President have painted them in a corner as incompetent douchebags anyway so and most have writtent the party as over.  So, if I were in the same shoes, politically I wouldn't think I have anything to gain by caving into the dictator Obama.  They've already been blamed for everything.   I don't see a downside for their party.  

All those folks quoted above may live by the axiom of "not letting a good crisis go to waste" or perhaps it's the "if it's bad enough, we have to lie" or whatever the latest retard moment that gets quoted from the worlds "best and brightest".  

I guarantee you that Buffett sticks his nose into the fray at some point and charges points competitive with any shylock in business.  

Oddly, when politicians and the media want to squeeze a party, they paint all of these dire outcomes in hopes of scaring the sheeple so they roar loud enough to get the immovable object to move.  Now when the shit is really about to hit the fan, you'll know it when CNBC trots out Abby Joseph Coen to wave a magic calming hand over the markets and show how much value there is in the markets at this time and it's time to buy with both hands.  

Basically we have a George Costanza government.  Believe and do exactly the opposite of what "they" are screaming about is the best way to get you luck to turn around in a good way.  If everything they do or say is wrong, then the opposite must be the key to success.


Tue, 10/08/2013 - 21:40 | 4036650 Atomizer
Atomizer's picture


Dave Chapelle: why terrorists won't take black people as hostage.


Tue, 10/08/2013 - 21:41 | 4036653 Flammonde
Flammonde's picture

No worries, the Quintillion dollar coin shall be minted by the BIS and that solves everything since it is a bit coin.

Tue, 10/08/2013 - 21:45 | 4036662 IridiumRebel
IridiumRebel's picture

Fucking bring it.....Me and mine can handle it. Might as well default now rather than later when it is worse. 

Tue, 10/08/2013 - 21:52 | 4036676 mrjohn
mrjohn's picture

So which Obama is right?


People have the right to change their minds. Democracy, one guy wins, the others lose, the guy that wins gets to have his own way until the next election. How hard is this to understand?


Tue, 10/08/2013 - 21:58 | 4036697 notadouche
notadouche's picture

Well actually we are not run by a dictator or a monarch.  We are set up to have 3 branches of government that are supposed to act as a reasonable check and balance to one another to make sure that "one guy" that wins doesn't control the entire process of government.  America was never set up to let "one guy that wins getting his own way until the next election".   What system are you referring to because it wasn't a democracy?

Tue, 10/08/2013 - 22:09 | 4036721 Pure Evil
Pure Evil's picture

Lets see if he talks out the other side of his ass when a Republican wins the White House.

I'm sure if Romney had won the 2012 election and he was signing legislation to end Obamacare we wouldn't be hearing about "the guy that wins gets to have his own way until the next election".

He'd be caterwauling about how everyone has the fundamental human right to free health care.



    To cry or screech like a cat in heat

    To make a shrill, discordant sound

Wed, 10/09/2013 - 03:13 | 4037165 Serenity Now
Serenity Now's picture

+1 for the use of "caterwauling."  LOL.  


Wed, 10/09/2013 - 00:26 | 4037029 TNTARG
TNTARG's picture

One guy does not. The FED does.

Wed, 10/09/2013 - 07:56 | 4037350 Two Feet Studs Up
Two Feet Studs Up's picture

Wrong analysis. Democracy isn't mentioned at all in US Constitution. Got news for you- USA isn't a democracy. It maybe played off as one yet we wouldnt see this shutdown happen if we lived in a true democracy.

Tue, 10/08/2013 - 21:54 | 4036685 kurt
kurt's picture

THEY decided that in order to have a one-world government, we all have to all be equally poor. Therefore, this "could" be used to initiate the Shylock Heard 'Round the World. 

Pound of flesh

Pound of flesh

Pound of flesh

Pound of flesh

Tue, 10/08/2013 - 22:12 | 4036729 rustymason
rustymason's picture

There will be no default, just as there was no real shutdown. It's all theater. The GOP had many chances to kill Obummercare and now they are going to stop it at the last minute? Ya, da. Please to give break, comrade.

Tue, 10/08/2013 - 22:20 | 4036750 knicks3005
knicks3005's picture

What's wrong with a default? My god! The horror of pressing the RESET button!!! 

Wed, 10/09/2013 - 02:59 | 4037153 Otrader
Otrader's picture

That would make it hard to get a new yellow Camaro SS with the transformer logo on the fender.

Tue, 10/08/2013 - 22:27 | 4036761 Rastadamus
Rastadamus's picture

You left out the part I wanted to read


Wed, 10/09/2013 - 05:02 | 4037229 TweedleDeeDooDah
TweedleDeeDooDah's picture

The "MOON" being vaults guarded by federal troops after confiscation, aided by receipts and informer rewards?


On the happier side of the coin, the government will probably reimburse everyone around $300 per ounce, maybe...

Tue, 10/08/2013 - 22:39 | 4036804 Zgangsta
Zgangsta's picture

We are insuch an Alice in Wonderland world already that I do not doubt that the banks would keep the system running by treating defaulted bonds the same as cash.

Then we they can finally have the dream financial world that is 100% separated from the real world.

Tue, 10/08/2013 - 23:13 | 4036894 andrewp111
andrewp111's picture

Obama wants a hard default. He wants it bad. He sees this as his roll of the dice - his chance to destroy the Republican Party forever. If he fails, he is a lame duck anyway, and there is no fun in that so he has nothing to lose. He has to destroy the House Republicans by any means necessary.

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