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Slowly At First, Then All At Once
Submitted by Simon Black of Sovereign Man
Slowly at first, then all at once
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
The dialogue above is from Ernest Hemingway’s 1926 novel, The Sun Also Rises.
It’s often attributed to Mark Twain or F. Scott Fitzgerald, or misquoted as something like “At first you go bankrupt slowly, then all at once.” But the theme is the same.
Nations go bankrupt in the same way. Banking collapses occur in the same way. Currency crises strike in the same way. They all happen gradually… and then suddenly. Sometimes overnight.
History is generous with examples of entire nations that have suffered this fate, from the collapse of the Soviet Union in 1991 to Argentina’s millennial financial crisis in 2001.
The warning signs are always there, even at the beginning. Over a period of years, sometimes decades, a tiny trickle of warning signs turns into a steady stream… and eventually a great flood.
The United States is clearly within this model, somewhere between a steady stream and a great flood. It shows.
Last night, after more than two weeks of utterly embarrassing theater, the government in the Land of the Free inked a deal to kick the can down the road a few more months. And in doing so, they set a very dangerous precedent.
As part of the bargain codified in HR 2775 (which President Obama signed into law), the Treasury Department is authorized to SUSPEND the debt ceiling. In other words, for all intents and purposes, there is now NO LIMIT government borrowing.
This limitless borrowing authority will expire on February 7, 2014. But it sets the precedent that dismissing the debt ceiling is a perfectly viable course of action.
Congress has effectively removed their handcuffs… so you can almost assuredly bet down the road that this provision will be extended, and ultimately become permanent.
No one in the Land of the Free seems to care. But foreigners do. The lead commentary out of China’s state media the other day was very clear in its position:
“It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.”
America’s dominance is coming to an end. Nearly every piece of objective evidence points to this conclusion– from the US government’s absurdly unsustainable finances to the worldwide backlash against their desperate spying tactics.
For several years now, this decline has been happening gradually. But we are quickly reaching the bifurcation point where the steady stream of warning signs will turn into an epic flood of consequences.
As these events unfold, this will become the biggest story of our time. The end of the US dollar hegemony will affect nearly every human being on the planet. And if history is any guide, what follows will be incredibly tumultuous.
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My favorite quotation from Papa.
Whats the Property Apraisor got to do with it.
Gasoline to $20/Gallon!
Simon, its actually even worse than that because Congress has to vote to eliminate the unlimited nature of the debt (no)limit by at least a 2/3rds majority or Obama can override a lesser vote with a veto. YES! How crafty an agreement can McConnell draft for a $2 billion get re-elected for free card!
Meanwhile, Obama, his minions, the media and the Obamabots can do nothing but slam those "pesky," radical, right-wing wackos that wanted to take the country to the "point of no return". Damn those people!!
Once every bearing revolution comes the cry out for anyone who has no (or little) gold to buy...
"On one of these turns" the Bearing Guy wll be right.
Gold, fishez!
Obongwater's first term: Slowly first.
Obongwater's second term: All at once.
Most countries around the world don't have a debt ceiling and yet the sky is not falling there... Pointless article.
All countries have debt ceilings, either imposed by the capital markets (see: Greece), or indirectly via inflation (see: Argentina, Venezuela).
I could give a shit if he smoked pot or not..who cares. Hes a fucking sociopath. A liar, a fraud an idiot and a treasonous fuck. Hes part of the worst pay perview show in history.
Cue Tina Turner. "Whats pot got to do, got to do with it?"
I wish IKE would kick the shit out of obama....ohh to dream.
RIPS
This Title - Slowly at first, then all at once
Sounds like my morning bowel movement.
KOI, Bitchez !!!
every year about this time, maw-maw watches the movie "old yeller"
she always hopes that the dog won't get rabies
(sorry if that spoils the movie for you)
but the dog keeps on getting rabies
and she always hopes the dog won't be shot
(sorry if blah blah)
but the dog keeps on getting shot
and dies
(see above re: sorry if etc etc)
every year
that maw-maw!
but there's always hope!
maybe next year!
Arguably the PRIMARY RESPONSIBILITY of Congress is to control the purse strings and prevent runaway spending. Congress has now ceded that authority to the executive branch in stark violation of the carefully constructed checks and balances put forth in the Constitution. We've now taken another giant leap toward totalitarian rule.
Re: Arguably the PRIMARY RESPONSIBILITY of Congress is to control the purse strings and prevent runaway spending.
And now, freed from the horror of defaulting, Congress can systematically allocate funds for every Federal Government agency and program...
HA HA HA, I'm just messin' wit ya.
Everybody loves spending other people's money on the Big-Gov scam their buddies are getting rich off of.
Sooner or later the government runs out of our money.
the government cannot run out of "our" money.
their money will run out of our trust...
Excellent post!! Nail, meet hammer. Milestones
Did you take the blue pill by accident recently?
I thought your handle meant that you knew that NONE OF THIS SHIT IS REAL.
The primary responsibility of Congress is get paid for serving their masters while appearing credible within the Matrix.
As for authority... well, they've NEVER had it. Totalitarian rule is all there ever was, and all there ever will be, as the only other rational option known as self-rule, will never be allowed.
Re: as the only other rational option known as self-rule, will never be allowed.
allowed? self-rule is impossible because humans aren't rational. Must of us are semi-psychotic. That's why so many dumbasses believe the bullshit coming from the sociopaths about the ideals of the Red & Blue Team, their best imaginary friends, or the chances of the Cubs winning the next world-series.
The smart-n-savvy people manipulate the semi-psychotic dumbasses using bullshit.
Government + bullshit = politics
Morals + bullshit = religion
Craft + bullshit = spatter art
Bullshit defines humanity.
Spot on, it's too much to face for some, that a happy-ending isn't going to be edited-in, just before the movie ends. And it's so clear that the Western world needs a powerful dose of reality to sweep away the concretion of absurd fictions we call the west. And as shocking as that will be I'm going to love watching it unfold, until it takes me out too. This is still evolution and it doesn't matter how you feel about this, or the messenger, the life and the space that you're part off will recycle anyone who does not adjust, or can not adjust to what is actual.
The present will not be toyed with, live in fantasy and it will have mercy on you and bring grace to the world ... by plowing you under.
"We've all been raised on television to believe that one day we'd all be millionaires, and movie gods, and rock stars. But we won't. And we're slowly learning that fact. And we're very, very pissed off. "
Wonder who said it...pscyhe!
Republicans loved the imperial presidency when Bush was in office, and Democrats love the imperial presidency now that Obama is in office.
It's a moot point whether the two parties are actually at odds politically with one another. Since they both work strenuously to increase the dominance of the executive branch when their guy is in charge, the end result is always a further centralization of power.
This country emerged out of a war to get rid of a king, but we've been working hard ever since — especially over the past decade — to rebuild a monarchy.
What's this "we" stuff, Human?!
Yep, Bammer will need to borrow and spend 4-6 Trillion more before he hands the crown to Hillary!!
Can't do that, fucking with Congress and the debt ceiling every 3 months!
All those sellout GOP Keynesian bastards now this too!!!
The S&P is going to 10,000 in the next few years. Only problem with that is a loaf of
bread is going to $100 in the same time period. If you have silver and gold, this will not
affect you.
It WILL affect you because your income won't be going up to match and you will be able to add less and less, if any, to your stack. That's assuming you can still afford enough loaves to feed yourself/family without depleting the stack in the meantime.
The Executive Branch with unlimited credit? What could go wrong?
The twin themes of The Sun Also Rises, were irony and pity.
Powerful stuff, but I think America has enough of both already.
All 3 branches plus the 4th branch - the military.
Complete with unencumbered nuclear collateral.
If we go bankrupt I hope we have a special reserve fund so we can continue to send billions to our 'allies' in israel.
Over.
Not to worry. That's all black budget, secret squirrel stuff.
Can't audit what was never there. Right?
Oh thank goodness. I was over in the 'Math Believers' thread kinda sweating it out thinking about this.
I'm glad there will be a black thing budget or whatever so our 'allies' can continue with gods work.
Praise bebe. Amen.
and bonds rally to a 4 month high.....
Whoever said fearmongering wasn't profitable?
Damn and we were just about to balance the budget and pay off that 16.99 trillion too.
Re: about to balance
But the Blue Team ALWAYS resists cutting Amtrak and NPR so the situation is hopeless. There's just nothing ELSE to cut.
Yep, it's all about setting precedant, so as to lower the hurdle the next time around.
We can all thank McConnell and Boehnner for sticking the final fork in it and calling it "done".
Yeah, but on the bright side...water skiing will be bitchin when the dam is finished in Paducah.
entropy is a motherfucker
Entropy is my friend. Entropy is Justice. Entropy is Nature kicking these stupid Nazi-assed motherfuckers in the nuts.
Entropy is knowing that all the machinations in the world won't prevent the dandelions from destroying every last block of marble in DC, someday.
Oh, my friend, that warrants an uparrow just for the visualization alone. Thanks, I'll use the image as I drift off to sleep tonite. Pleasant dreams.
Now that Obama has his American Express Black Card, he can finally go take care of Syria and Iran. I'm sure Janet Yellen will be happy to help out her master race's homeland.
Bankrupt? We can always get a loan from EU or China. Or, even, the World Bank. They've got lots of money.
Folks - this is a fantastic development for those of us who want the house of cards to collapse sooner rather than later. Pedal to the metal, bitchez!
Enjoy your martial law while sheltering in place.
I pity the fool who thinks that collapse is not part of the elite's plans.
I also want to see "nature" assert itself with a restoration of cause and effect but as one who lives in a city I do not relish the stuttering collapse of social order that may come. As it is I am seeing more pandhandlers and more aggressive ones at that. Not all of us have a well in the back yard and good neighbors.
Bellum Americana?
Looks like the plot of V for Vendetta might actually happen
Re: Looks like the plot of V for Vendetta might actually happen
You mean where everybody is in the movies watching beautiful people and ignoring reality?
Now that's interesting--just the kind of change that would be needed to pull off another Great Bankster Bailout/Robbery.
I guess the Tyler's don't do any fact checking....Debt ceiling was suspended from Feb to May 2013. There is no new paradigm shfit just the same old shit.
Sayeth the person who failed to note the author is named Simon.
I know its Simon Black. My point was about the ZH editors.
I thought I remembered something like that. All the blogs were saying, "this is it, they will keep re-suspending forever! This means there is no debt ceiling!"
Technically they were wrong since the ceiling did come back, but now that its gone again and so soon...
Nobody states the obvious with less flavor than Simon.
Just a string of stale non specific something or others and what nots.
Re: Just a string of stale non specific something or others and what nots.
It's happening real soon tho...
Yeah, I know. Just give it some ummf. Ya know?
More bang...less whimper.
That's all I'm saying.
Now just wait till tonight when the economic collapse blog guy regurgitates simon and doug kass in his article.
Good ole Sesame Street Guy. I bet he's got a tattoo of The Count.
Why borrow when you can print?
Why print when you can steal?
Why steal when you can enslave?
Re: Why steal when you can enslave?
Why enslave when you can manipulate?
Why enslave when you can distract?
I'm pretty sure HR 2775 will be remembered as the "Go fuck yourself America" law.
Tesla reported how many green energy credits they sold today. The number dwarfs all other automakers. The largest buyer of credits was GM, even though GM builds an electric car.
So the US government essentially helped prop up Tesla by having their own car company put Tesla in the black. I wonder if any congressmen knew about this and used the information to buy Tesla stock.
God the bullshit never ends.
http://www.nytimes.com/news/fiscal-crisis/2013/10/17/provision-temporarily-suspends-debt-ceiling/?_r=0
Did Congress just accidentally kill the debt ceiling?
It could certainly look that way, given the legislative text. The “default prevention” section of the bill seems to imply that going forward, the president has the authority to increase the country’s debt burden unilaterally, and that Congress can only stop him by passing a bill. Given that the president could veto that bill, it would take a supermajority to stop him from raising the debt ceiling.
Some market participants have interpreted the law that way, and the provision has caused widespread confusion. “This amendment is a significant development for future debt ceiling negations as it will forever remove the uncertainties associated with prolonged and disruptive negotiations on this issue,” Millan L. Mulraine of TD Securities said in a note to clients. “By design, the amendment makes future debt limit increases automatic, removing the specter that this issue could again be used by a minority as a bargaining chip in the future.”
But not so fast, Senate aides said.
This procedural maneuver is called the “McConnell rule,” as it is the brainchild of Senator Mitch McConnell of Kentucky, the Republican leader.
If Congress implemented the McConnell rule permanently, it would defang the debt ceiling. But the bill only implements it temporarily. The Treasury Department would be able to issue as much debt as it needs to through Feb. 7. At that point, everything would revert to normal: The country would hit its ceiling. Treasury would employ “extraordinary measures” to keep paying its bills. Eventually, a cash crunch would set in.
The deal explicitly includes an option for Congress to object to the president increasing the country’s debt. And Mr. McConnell intends to introduce such a motion, an aide said. But because it would need to pass through Congress and then over-ride a presidential veto, it’s just a symbolic gesture.
The tactic makes the calendar the trigger for negotiations, rather than a dollar figure. (Generally, Congress adds a nine or ten figure sum to the debt ceiling and then raises it again whenever Treasury hits it.)
The important part is that this is a temporary thing, not a procedural change. So the debt ceiling might continue to be a thorn in the administration’s side for years to come.
I get your point and agree with everything except the "accidentally" part.
I'm sure the creditors,G20 and BRICS will not be impressed with that explanation.I'm sure as hell
not.
Kudos to John Williams @ shadowstats.The only commentator to put a year on the end of
the dollar,and years ago.Looks like he will be proven right, 2014 it is.
Keep stackin and prepping.Won't be long now.
Err, umm....Did he happen to mention a month or day? GPS coordinates of initial crash location?
Seriously, though...would you happen to have a link for the article?
Thx
The long repory.last years version,is free at his site.
Yo will have to pay for the current one.Iys just an opdated version.
The guy is consistent.
It is not stoppable until it stops itself. I will no longer waste my time with it. Life is too short (when you're old anyway). Thanks to ZH for letting me express my thoughts. Best to all of you, goodbye.
williamBanzi7: Keep sticking them in the eye with it. A little suffering is good for them.
Re: Best to all of you, goodbye.
Good luck. I hope you can get away from all the political sites for awhile. It does clear your mind.
"The lead commentary out of China’s state media the other day was very clear in its position:
'It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.'"
No, a change in the way the entire world's financial system is run is the only thing that will result in a significant change. No more fractional reserve system with an effectively zero reserve requirement with fiat money created only through the issuance of new debt.
Debt buffet...all you can eat, bitchez!
Agent P, You said it better and more succinctly than anyone else! +100 thumbs up.
So, now we get to see how much was actually borrowed during the "extraordinary measures," i.e. cooking the books.
I wonder if the suspended debt limit will now be followed by a significant expansion of QE through Feb. 2014.
Get to work Yellin, print a zillion a year, (trillion by 10)
Debt limit suspended? Hmm.
NSA and DHS must have some binge purchases- like more MRAPs, M-4s, 40 SW JHP, more FEMA centers to stockpile full of supplies (for DHS and HSA-not the people, because to feed people would only require a few million in chicken feed), and the politicians have to pay for their foreign resorts they are busy setting up before the crunch. All adds up to one big last minute spending orgy.
And we thought it was bad when those Louisiana Wal-Mart shoppers cleaned out the stores when they had temporary limitless EBT benefis?
Damn, I was looking forward to seeing what Walmart looked like when the EBT cards and SS electronic transfers were not refilled.
Not first hand, mind you, that could be dangerous.
It was in 1971 when Nixon closed the gold window that there was no limit on our debt. We could then print until the cows come home. The dollar is backed by the US military internationally and the gestapo IRS/FBI/etc etc at home. The balance is how much crap people will take overseas before they all go nuts everywhere and the US military simply can't deal with it all or if people go crazy here at home it will be too much for the American gestapo.
Reading this article just infuriates me because what we have in our temples of power are just evil MFers. This printing to infinity and the NYSE coasting along seeminly impervious to anything needs to end like now...Sick of the waiting around....T-T-T-T-TODAY JUNIOR!!
How quickly all the debt ceiling argument will fade away as we are washed over with warmth at Christmas, Dancing with the stars, Biggest Loser etc. ahhhhhhhh
I see the debt ceiling as a non starter for the opposition because it puts the whole US credit rating and world reserve currency at risk and whoever does that will be blamed whether right or wrong. That's why I thought raising the debt ceiling should have been agreed to be done early on in the skirmish. However, what the opposition should have held out on is the government shutdown. It's only 17% of government anyway but that's where any governments cuts should begin and those job cuts should be made permanent if Obama does not want to play ball with the budget.
Its like EBT cards at Walmart.
You cannot get angry at a brother for "stocking up."
I read somewhere today, maybe zerohedge can not remember. Some firm put out an opinion on this very topic.
McConnell staff person called to correct the situation. Currently the McConnell rule is in place. At a date in January or February of the new year the McConnell rule is rescinded and everything reverts back to form.
http://www.nytimes.com/news/fiscal-crisis/2013/10/17/provision-temporari...
The failed state of the banana republic formerly known as the USA led by what can only be described as blood-sucking ticks gorging blindly to sate their repugnent appetites and lusts at the cost of the World.
http://tinyurl.com/d7x4p68
http://www.informationclearinghouse.info/article36555.htm
and #Fukushima coming to the USA is full destructive force and where everybody is in denial: the hubris of insanity
http://enenews.com/
Ho hum
my current prediction is 12 April 2014 for THE END of the dolla and US leadership
According to Deutsche Bank:
https://app.box.com/s/otdvclw8ijxzflhkhem6
October 8, 2013
Bretton Woods III and the Global Savings Glut
Summary
History suggests that periods of global economic expansion are characterized by symbiotic imbalances rather than balanced arrangements that satisfy theoretical ideals. Therefore, it is important to understand the factors that drive the imbalances in each period as well as the resulting distortions. In our view, demographics will have a significant impact on the future trajectory of the world economy. In this report we specifically focus on the implications on savings and current accounts.
Population trends imply that we are entering a phase where rapid aging will cause many countries to generate persistent current account surpluses. This raises the question – who will generate the world’s deficits?
World demographics is not neatly spaced out such that some countries generate surplus savings exactly when others need to fund deficits. Moreover, there are many factors that may prevent surplus countries from funding deficit countries. Thus, we have a situation where countries like India, Brazil and Indonesia may attempt to tame their deficits before old countries like Japan and Germany enter their dissaving phase. The resulting savings glut could be further exacerbated by a likely increase in China’s current account surplus.
Thus, the emerging international economic system, dubbed by us as Bretton Woods III, will yet again depend on the United States to act as the demand source of last resort. Meanwhile, demographics will hold down the real cost of international capital whether or not the US decides to absorb part of it. In turn, the ability of world’s financial system to allocate excess savings will be tested again. Young emerging markets with the ability to sensibly deploy cheap capital could benefit disproportionately from this environment.
This analysis is not correct. Read the actual bill, well, hire an attorney to read it. It is very complex, but... Until February 8th, the President can request debt ceiling increases necessary to meet current obligations of the government. Congress would need to vote to deny the increases. This mechanism has come to be known as the "McConnell Rule". After Feb 8th, 2014, this provision expires. The President no longer has the authority to raise the debt ceiling after that. Treasury can re-use the special tricks, aka stealing from government pension funds, after that date. The addition to the prior debt ceiling amount is whatever actual expenses of the government have been between now and the expiration.
Read Division B of HR 2775, Section 1002(c) about 20 times and it will start to make sense.
Color me cynical, because it's always easier to extend a "temporary" provision (e.g. tax) than let it lapse.
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What would stop the Government from simply borrowing like mad to buiid up a war chest between now and F7, knowing the Repubs or the Dems, (Cloward and Piven) will push the country over the edge?
Then it wouldn't matter for a while.
I shouldn't really smoke before I write on ZH…
It sounds too much like reality.
•?•
V-V
I hope Foodstamp spends another $5 trillion before February. Fuck off GOP.
WRONG! You say "No one in the Land of the Free seems to care. " I call BullSh!t on that! Many of us care - a lot! - but have been repeatedly told we "have no standing to challenge" the nefarious actions of these recreants and crooks.
Good subject, poorly written.