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The US Is Now Spending 26% Of Available Tax Revenue To Pay Interest

Tyler Durden's picture


Submitted by Simon Black of Sovereign Man blog,

By the 19th century, the Ottoman Empire had become a has-been power whose glory days as the world’s superpower were well behind them.

They had been supplanted the French, the British, and the Russian empires in all matters of economic, military, and diplomatic strength. Much of this was due to the Ottoman Empire’s massive debt burden.

In 1868, the Ottoman government spent 17% of its entire tax revenue just to pay interest on the debt.

And they were well past the point of no return where they had to borrow money just to pay interest on the money they had already borrowed.

The increased debt meant the interest payments also increased. And three years later in 1871, the government was spending 32% of its tax revenue just to pay interest.

By 1877, the Ottoman government was spending 52% of its tax revenue just to pay interest. And at that point they were finished. They defaulted that year.

This is a common story throughout history.

The French government saw a meteoric rise in their debt throughout the late 1700s. By 1788, on the eve of the French Revolution, they spent 62% of their tax revenue to pay interest on the debt.

Charles I of Spain had so much debt that by 1559, interest payments exceeded ordinary revenue of the Habsburg monarchy. Spain defaulted four times on its debt before the end of the century.

It doesn’t take a rocket scientist to figure out that an unsustainable debt burden soundly tolls the death knell of a nation’s economy, and its government.

Unfortunately, it can sometimes take a rocket scientist to figure out what the real numbers are; governments have a vested interest in not being transparent about their debts and interest payments.

In the Land of the Free, for example, the government routinely doesn’t count interest payments that they make to the Social Security Trust Fund.

They’ve managed to convince people that those debts don’t matter ‘because we owe it to ourselves.’

Apparently in their minds, solemn promises made to retirees simply don’t count.

It’s like a person who is in debt up to his eyeballs with both credit card companies and family members has no compunction about stiffing Grandpa.

Obligations are obligations, no matter who they’re owed to.

Taking this into account, total US interest payments in Fiscal Year 2013 were a whopping $415 billion, roughly 17% of total tax revenue. Just like the Ottoman Empire was at in 1868.

Here’s the thing, though– it’s inappropriate to look at total tax revenue when we’re talking about making interest payments.

The IRS collected $2.49 trillion in taxes last year (net of refunds). But of this amount, $891 billion was from payroll tax.

According to FICA and the Social Security Act of 1935, however, this amount is tied directly to funding Social Security and Medicare. It is not to be used for interest payments.

Based on this data, the amount of tax revenue that the US government had available to pay for its operations was $1.599 trillion in FY2013.

This means they actually spent approximately 26% of their available tax revenue just to pay interest last year… a much higher number than 17%.

This is an unbelievable figure. The only thing more unbelievable is how masterfully they understate reality… and the level of deception they employ to conceal the truth.


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Tue, 03/25/2014 - 19:11 | 4592134 Independent
Independent's picture

Nice to know my tax money is paying for the good life for some dual citizens

Didnt Nuland get a 5 billion dollar allowance, and that is only one dual citizens spending money

Tue, 03/25/2014 - 19:12 | 4592139 fonestar
fonestar's picture

Targeted 2% inflation, year over year will lead to...

Tue, 03/25/2014 - 19:13 | 4592143 quintago
quintago's picture

Compound interest is one hell of a drug

Tue, 03/25/2014 - 19:23 | 4592176 HelluvaEngineer
HelluvaEngineer's picture

So what you're saying is that we have 74% more to go?

Tue, 03/25/2014 - 19:37 | 4592214 zaphod
zaphod's picture

26% of tax revenues going towards interest is nothing, because the government can simply print or default it away.

However, we are closing on on 100% of tax revenues going towards all the various entitlement programs. That is much much worse because the free shit voting bloc won't allow entitlements to be defaulted or inflated away without a fight.

Tue, 03/25/2014 - 19:40 | 4592229 BlindMonkey
BlindMonkey's picture

The knockout game is just the fat lady tuning up behind the curtain.  Just wait 'till the .gov cheese stops flowing.  

Tue, 03/25/2014 - 19:52 | 4592262 Xibalba
Xibalba's picture

You don't think this whole thing has been thought out already?  


.gov will replace cheese with lead


Tue, 03/25/2014 - 19:55 | 4592273 knukles
knukles's picture

The New Progressive Happy Way Forward.

So what if we spend 75% on interest?
We can just print the rest!

That's the new meme with Progressive out here in LooneyLand!

Tue, 03/25/2014 - 20:08 | 4592299 hobopants
hobopants's picture

Sooooooo tell me again how the Fed is suppose to ever raise rates or stop printing cash when a quarter of revenue is going to service existing debt? We can't even afford to borrow at the zero bound... 

Tue, 03/25/2014 - 21:37 | 4592540 wintermute
wintermute's picture

Japan is at 40% tax revenues paying debt interest, so there is a little more stretch in the elastic, but it's going to hurt a hell of a lot when it finally snaps.


Wed, 03/26/2014 - 03:08 | 4593010 CCanuck
CCanuck's picture

Japan is a Nuclear Zombie, could go to 60-70-100%, what the fuck do they care....none of them gonna be around to pay it all off....

last one out turn off the lights.

Wed, 03/26/2014 - 06:38 | 4593095 johnQpublic
johnQpublic's picture

already out, but thanks for playing

Wed, 03/26/2014 - 03:10 | 4593015 free_lunch
free_lunch's picture

The hilarious thing is it is mathematically impossible to pay back the debt, no matter how much taxes you pay or how fast the economy grows. The debt will ALWAYS continue to grow because the money system is designed that way.


VIDEO: Why is there so much debt:



Tue, 03/25/2014 - 20:49 | 4592411 yogibear
yogibear's picture

Riots all over. Mulltiply the LA riots all over.

Wed, 03/26/2014 - 09:34 | 4593380 giggler321
giggler321's picture

and David Camron says "They are putting the public's lives at risk so we can use live rounds".  Last time it was when they stopped, if they don't next time. umm

Tue, 03/25/2014 - 20:10 | 4592301 DFCtomm
DFCtomm's picture

You're just now figuring out that this will all be settled the old fashion way? The way things like this have always settled in the end. Make some time to have a drink and sit by the pool. Take the kids to Disney Land. Winter is coming.

Tue, 03/25/2014 - 21:04 | 4592455 OceanX
OceanX's picture

" government can simply print or default it away."

Obviously, you have no clue how money is created and by whom.  A good start is the "Moneychangers"  Yes, it is long and tedious but, it explains 300 years of banking history.

When the default comes, the money changers will take real assests...

Wed, 03/26/2014 - 01:10 | 4592909 Kirk2NCC1701
Kirk2NCC1701's picture

Uh-huh. Them and whose army?

Wed, 03/26/2014 - 08:02 | 4593163 topspinslicer
topspinslicer's picture

Kirk -- whose army was needed recently to take away the homes?

Tue, 03/25/2014 - 21:04 | 4592456 OceanX
OceanX's picture

" government can simply print or default it away."

Obviously, you have no clue how money is created and by whom.  A good start is the "Moneychangers"  Yes, it is long and tedious but, it explains 300 years of banking history.

When the default comes, the money changers will take real assests...

Wed, 03/26/2014 - 03:25 | 4593028 free_lunch
free_lunch's picture

You sir, are a victim of the left/right paradigm propaganda, designed to keep people distracted.  Divide and rule, even after thousands of years it still works to control the common people.


While two dogs are fighting for a bone, a third runs away with it ( Ed Griffin explaining )

3 Simple Changes that Fix the Economy

Watch the video to find out how money is at the root of high debt, inequality and unaffordable house prices, and how we can fix it:

Wed, 03/26/2014 - 08:10 | 4593174 tarsubil
tarsubil's picture

If New Yorkers fool themselves into thinking they are rich because of a number they receive every two weeks before they go home to their tiny crappy roach infested flat, then the free shit army will fool themselves when they get giant checks on their way to the grocery store to buy moldy bread.

Tue, 03/25/2014 - 20:16 | 4592320 TahoeBilly2012
TahoeBilly2012's picture

Don't forget late fees!

Tue, 03/25/2014 - 21:32 | 4592531 rbg81
rbg81's picture

Not a problem.  Negative interest rates will soon mean that people will PAY the Government to hold its debt.  

It's genius I tell ya.

Tue, 03/25/2014 - 19:30 | 4592196 cynicalskeptic
cynicalskeptic's picture

 That 'targeted inflation' rate of 2% is closer to 8% in reality.  When the genie gets out of the bottle and all those overseas dollars that are currently pushing up inflation far higher overseas come home to roost, you're looking at Weimar Germany.

The 'good thing' is that TRILLIONS of dollars in debt are MUCH easier to pay off with hyperinflated dollars. $20 TRILLION in debt isn't much at all when a loaf of bread costs $500 Billion. Of course you're screwed if you depend on a fixed payment, interest payments or have any savings.

Banks used to HATE inflation when they were the lenders.  Now that they're the debtors..... not so much.

Tue, 03/25/2014 - 19:39 | 4592218 fonestar
fonestar's picture

One wonders about the underhanded men on Jekyll Island one-hundred years ago.  Did they not see themselves planting the seeds of their own destruction?  Or were they just that confident in their great grandchildren maintaining control no matter what?

Tue, 03/25/2014 - 19:51 | 4592259 XitSam
XitSam's picture

It isn't control of the economy but control of people they are after.  And that will be solidified, not destroyed, in a collapse.

Tue, 03/25/2014 - 20:35 | 4592371 Mad Muppet
Mad Muppet's picture're suprisingly cogent today. Is everything ok?

Wed, 03/26/2014 - 11:00 | 4593742 effendi
effendi's picture

Bankers loved inflation when they were lenders. It wasn't bank money being inflated away but depostors. The inflation causes asset prices to rise which encourages buyers to borrow money to beat inflation (buy now before you get priced out mentality) and the banks make their cut on all that borrowed money.

Tue, 03/25/2014 - 19:35 | 4592211 DIgnified
DIgnified's picture

You with up-votes is disturbing.  Say something to fix this. 

Tue, 03/25/2014 - 19:40 | 4592228 fonestar
fonestar's picture



Tue, 03/25/2014 - 21:11 | 4592474 DFCtomm
DFCtomm's picture

He's being tricky. He's found a way to say buy bitcoins and get up votes.

Tue, 03/25/2014 - 21:12 | 4592479 post turtle saver
post turtle saver's picture

... your money having half its value in 36 years

Tue, 03/25/2014 - 22:21 | 4592666 Big Brother
Big Brother's picture

Your money being worth half as much (1st order linear approximation for those keeping score) in 36 years.

Tue, 03/25/2014 - 23:53 | 4592820 MontgomeryScott
MontgomeryScott's picture

Why, 'fonestar', you are back to a base of normalcy!

Good to see rational thinking again!

Don't you just LOVE the concept of 'compound interest'? The 'rule of sevens'?

10% per year, per year?

Initial loan amount is not counted, and starts at 'zero count'. each consecutive amount is counted as one, and continues until 7.

Initial = 100.

110, 121, 133.1, 146.41, 161.051, 177.1561, 194.87471. SEE? SEVEN counts, 10% compound interest, and the owed money effectively DOUBLES. THIS is the 'rule of sevens', that is taught in the boiler-rooms of the 'finance companies'.

You've heard the term 'grow your money'?

THIS is how it's done, and any so-called 'financial planner' who tells you otherwise is full of shit. You 'invest', but are charged for it. THEY skim a percentage for themselves. YOU see numbers rising, and THINK your 'money' is supposedly 'growing', as they lent it to people who are tied in to 10% compounding interest rates (some higer, some lower, but overall, a good average). YOUR money is devalued, and their bank statements never seem to dwindle; but increase expotentially, seemingly defying all rules of logic.

A TWO percent 'inflation rate' is really nonsensical and not even CLOSE to the REAL numbers.

You DO know that 'Bitcoin' is another way to scam and 'pump-dump' your money, your wealth, and your very life. Sell me your computer and let me datamine. I will reward you with, um, a 'virtual currency'. Of course, you have to give me full access to all your files. Download here at cloudhashing.WTF. WE PROMISE that it is ANONYMOUS (heh, heh, heh, YEAH! THAT will get those plebes! A SINGLE WORD that describes a co-opted and lost concept, like 'OCCUPY' or 'ANONYMOUS', in terms that engratiate our subjects...)

It's fucking EVIL.


Shake it off, 'fonestar'! It's good to see you again.



Wed, 03/26/2014 - 11:17 | 4593838 painlord-2k
painlord-2k's picture

....Bitcoin adoption.

Wed, 03/26/2014 - 11:17 | 4593839 painlord-2k
painlord-2k's picture

....Bitcoin adoption.

Tue, 03/25/2014 - 19:16 | 4592151 Mr Pink
Tue, 03/25/2014 - 19:19 | 4592161 holmes
holmes's picture

Some people shouldn't be allowed to vote.

Tue, 03/25/2014 - 19:58 | 4592276 knukles
knukles's picture

Like felons, illegal immigrants, liberals, Progressives, registered Democrats, RINOs and people of whom I have not personally approved.

Wed, 03/26/2014 - 03:09 | 4593013 Offthebeach
Offthebeach's picture

If voting mattered, it would be made illegal.

Tue, 03/25/2014 - 19:25 | 4592180 HelluvaEngineer
HelluvaEngineer's picture

I'll forgive her.  Just this once.  Next time - spankings.

Tue, 03/25/2014 - 20:45 | 4592395 Blano
Blano's picture

Dayum I would so hit that....nice profile and barely keeping your top up honey.

Tue, 03/25/2014 - 22:25 | 4592672 Big Brother
Big Brother's picture

Let's see here, probably 18 when she first voted for Obama; so that's puts her at about 23-24 years old.  Nope, not too young for me.

Wed, 03/26/2014 - 00:27 | 4592865 MontgomeryScott
MontgomeryScott's picture

It's just not fair.

Every year, the good-looking girls seem to get younger.

This one's not bad overall, but with a mentality that could actually cast a vote for Soetoro, she was a little too stupid by the age of 18. Besides, her titties are too small.

Waking up the next morning, and desiring a kiss, I look over at this child, who seems to be texting on her Iphone and waving like a three-year-old. I rise from bed, and wash, and make my way to the kitchen to see what this pretty thing can do on a stove. Seeing nothing, I smile inwardly (she's probably too overcome, and exited), and proceed to make eggs, bacon, toast, and slice some fruit up while the coffee is brewing.

I hear harsh banging sounds from the bathroom, and assume that she is in a hurried rush to make herself look good for me.

As I greet her in the kitchen, she is fully dressed, and texting again, as she blows by the table on the way out the door. She stops momentarialy, smiling sweetly, as she continues tweaking her right thumb, and I watch her skinny ass as the screen door hits it on the way out. I check my wallet, and find that it is several hundred dollars lighter, but find a note inside, which states (in stylized children's handwriting) that it was fun, but she has better things to do. The big swooshes and the little heart-shaped circles over the smaller-case letter 'I''s make me laugh, as I realize that I just fucked a girl with the mentality of a 7-year-old (with an I.D. that stated that she was 23). Chiding myself, I throw her plate of food in the garbage, and reflect back at the night's festivities. She was scrawny, selfish, greedy, and not a very good lay, after all.

The next time I saw her, ten years hence, she looked stressed. Her titties hadn't grown, but they had managed to sag a little, and her maturity rate had grown to that of a 13-year-old, as she described how she had become a 'single mother', and wanted to rekindle our relationship...


SO, 'Big Brother', is THIS what you REALLY want?

Tue, 03/25/2014 - 20:29 | 4592357 lordbyroniv
lordbyroniv's picture

seems we have more runaway than I thought........


Keep Dancing !!!

Tue, 03/25/2014 - 19:11 | 4592138 holmes
holmes's picture

The Great Re-Set can't come soon enough

Tue, 03/25/2014 - 19:18 | 4592154 Hero Protagonist
Hero Protagonist's picture

As long as Debt Service is LESS THAN Tax revenue, [insert FED, Politician, Lobbyist, CNBC pundit, etc] can say, "we can grow our way out of this".  Therefore, we have a long way to go....debt can increase almost 200%.  Sucks but whose going to be the counter-party to change anything.

Tue, 03/25/2014 - 20:02 | 4592289 NihilistZero
NihilistZero's picture

The FED is probably at least a 3rd of treasury ownership right?

So aren't we paying a thrid plus of that 26% to ourselves?

Accounting gimmicks and all...

Tue, 03/25/2014 - 21:21 | 4592504 post turtle saver
post turtle saver's picture

fed and intra-governmental holdings in recent history are usually around 50%... of the remainder, around 28% is foreign / international holdings... the rest goes to mutual funds, pensions, insurance and the like, much of which itself is domestic by nature...

so yeah, we kind of print for ourselves to pay ourselves... the trick here is having first access to the printing so you can make money on the paying... *inflation ALWAYS benefits those with first access to money*

Tue, 03/25/2014 - 22:46 | 4592709 rosiescenario
rosiescenario's picture

Inflation also favors the debtor....the greater the debt, the bigger the favor.


Surprisingly, banks' management are also favored by inflation as inadequate collateral eventually appreciates enough to cover the debt.


So the Feds and our banking cartel management all favor need to wonder where the $ value is headed.

Wed, 03/26/2014 - 10:11 | 4593491 astoriajoe
astoriajoe's picture

"So aren't we paying a thrid plus of that 26% to ourselves?"

Are you claiming to be a member of the Federal Reserve? You might want to keep that on the DL in these parts.

Tue, 03/25/2014 - 19:18 | 4592155 CrashisOptimistic
CrashisOptimistic's picture

No "reset" is coming.  A smash is coming, but it won't be a reset.  A reset implies improvement after the smash.

The coming smash will be forever.

Tue, 03/25/2014 - 19:22 | 4592169 holmes
holmes's picture

I'm talking about the financial system collapsing and voters wising up not, a meteor crashing into the earth.

Tue, 03/25/2014 - 19:24 | 4592179 CrashisOptimistic
CrashisOptimistic's picture

There will be no reset.  The Fed and its fellow central banks can coordinate the creation of money to solve all such problems.

Oil scarcity doesn't require a meteor.

Tue, 03/25/2014 - 19:26 | 4592187 holmes
holmes's picture

"The Fed and its fellow central banks can coordinate the creation of money to solve all such problems."

That Fed kool-aid taste good?

Tue, 03/25/2014 - 19:49 | 4592258 CrashisOptimistic
CrashisOptimistic's picture

So far.

Tue, 03/25/2014 - 19:27 | 4592188 sessinpo
sessinpo's picture

It won't be forever, but I agree with you it will be a smash.

Quite frankly, I have mixed feelings. I know it is coming. I know it needs to be done. But I also know it will be severely painful and painful for the regular population, not the elite. Many people will probably not survive it which is why most want to ignore it or prolong this ficticious status quo.

Those that are saying bring on the devastation are unknowingly saying, bring on my pain or death so I can save the elites. A reset doesn't get rid of elites. We've had resets throughout history and those elites fair far better then those they rule over.

Tue, 03/25/2014 - 19:31 | 4592197 HardlyZero
HardlyZero's picture

All Hail Caligula !   /sarc

Tue, 03/25/2014 - 21:07 | 4592466 Grouchy Marx
Grouchy Marx's picture

The reset following Rome's collapse wasn't forever, but it did take a long time for things to recover in Italy.

Wed, 03/26/2014 - 00:38 | 4592874 MontgomeryScott
MontgomeryScott's picture

Just checking...

How's that shit going, over in Italy?

The Colessium still looks pretty bad, and the navy is still pretty pathetic. BUT...

HEY! They got EL-POPO!

And olive oil (I think)...

And FIAT... (OMFG!)

WHEN, exactly, was the 'recovery', again? I must have missed that event.


Wed, 03/26/2014 - 08:49 | 4593259 samcontrol
samcontrol's picture

the pope is argentine.

I,m French and not particularly fond on anything Italian Except chicks here in Argentina , most Italian descendants.

But they do have one hell of a history , and a lot more currently than you think.
To compare just a few things to. the states.
better wine,,, yes fuck off California.
better shoes , fashion generally.
better football. ,, the real gay thing not the headbaching.
hotter women, men.
yes the do have great olive oil.
which leaves to food...not even comparable. don,t you mention some fancy ny restaurant,,,the chef Ain,t black.
fiat has made people's car all over the world ....oh they do own Ferrari and Chrysler is it?
the best pizza is in Secilia, or maybe my home town nice(France) ..
you do know pizza and pasta are Italian right.?
I could go on and on but will keep my strength for when the French or argies get bashed on here. Like i said tough for a Frenchmen to defend an
Italian, but you went to far dooch.

Tue, 03/25/2014 - 21:55 | 4592588 Tulpa
Tulpa's picture

Today's elites are no better equipped to survive a hard smash than anyone else.  Their wealth/power is in paper and utterly dependent on continued functioning of the financial system as we know it.

Which is one reason to doubt some of the off-the-wall conspiracy theories that ZH is famous for... there's no way JPM/Goldman or today's politicians come out on top from a worthless dollar, worthless property titles, and might makes right fighting in the streets.  These aren't landed gentry with castles and a bevy of knights at their command.

Wed, 03/26/2014 - 03:57 | 4593043 layman_please
layman_please's picture

Their capital is in the idiocy of populace, paper just represents that. I don't see that disappearing anywhere with a smash, quite the opposite i'm afraid.

Tue, 03/25/2014 - 19:59 | 4592281 knukles
knukles's picture

Don't worry.  HillBillary is your next predident and she'll give everybody a new red plastic RESET button form Office Despot

Tue, 03/25/2014 - 20:18 | 4592326 TahoeBilly2012
TahoeBilly2012's picture

Group hug then group reset? 

Tue, 03/25/2014 - 21:00 | 4592440 robobbob
robobbob's picture

the oracles have declared it. if HC wins, grab bug out bag.

Wed, 03/26/2014 - 00:48 | 4592888 MontgomeryScott
MontgomeryScott's picture

Billary's 2016 campaign will be promoting these on line, according to my super-secret political contacts. Office Despotism will be out of them (as well as out of business) by then, so you had better stock up while you can. For a sneak preview of Billary's RESET button, my super-secret 'office of campaign promises' has divulged the following 23-second video (made under super-secret security scrutiny):


Tue, 03/25/2014 - 19:12 | 4592140 CrashisOptimistic
CrashisOptimistic's picture

Well, yes, but a big chunk of that interest is paid to the Fed for their holdings, and they just refund it to Treasury so  . . . . .

Tue, 03/25/2014 - 19:14 | 4592144 IridiumRebel
IridiumRebel's picture

See ya at 3.5% interest rates!

Tue, 03/25/2014 - 19:17 | 4592149 CrashisOptimistic
CrashisOptimistic's picture

So you must forsee explosive GDP growth, since that's what raises rates.

And you do know rates have been falling for 30 years, so you must see some fundamentally positive GDP change from those 30 years?

Tue, 03/25/2014 - 19:21 | 4592166 IridiumRebel
IridiumRebel's picture

I see bond vigilantes.

Tue, 03/25/2014 - 19:22 | 4592170 CrashisOptimistic
CrashisOptimistic's picture

So they will sell their holdings?  To Janet?

Tue, 03/25/2014 - 19:25 | 4592181 IridiumRebel
IridiumRebel's picture

Do you see this all ending well?

Tue, 03/25/2014 - 19:36 | 4592203 HardlyZero
HardlyZero's picture

Explosive Shinola, followed by the four horsemen.

It'll be like a walk through the Valley of biggie right ?

Tue, 03/25/2014 - 19:37 | 4592215 walküre
walküre's picture

Put me in the camp of rising interest rates as well. Didn't think it could happen for last 4 years but now I see where this is going. Yellen has no other choice and Bernanke rode into the sunset with a legacy of super low interest rates and no collapse of any asset class. He's off the hook and she is going to take the crap.

Wed, 03/26/2014 - 01:22 | 4592921 layman_please
layman_please's picture

end of ZIRP and QE will inflict so much pain that every idiot will be begging for negative rates and QE345 or whatever we are at, i have lost count. after that yellen will be depicted on the cover of the atlantic with bold letters HERO.

Tue, 03/25/2014 - 19:54 | 4592264 CrashisOptimistic
CrashisOptimistic's picture

"This" is oil scarcity, and no that will not end well.

The monetary this and that are just actions at the whimsy of man.  They don't matter and can be changed by some other whimsy.

If the global system is about to explode and global printing of money will stop the explosion then it will be printed.  If the global system is about to implode, and the global unprinting of money will stop the implosion, then it will be globally unprinted.

That's all whimsical nothingness.  Money is an invention of mankind.  It's not a natural law.

The joules in oil are immune to whimsy, and that is what will kill you.

Tue, 03/25/2014 - 20:27 | 4592347 DFCtomm
DFCtomm's picture

How about the global system will explode if they print money, but it will also explode if they stop printing money. I think that's a more accurate picture.

Tue, 03/25/2014 - 20:31 | 4592363 IridiumRebel
IridiumRebel's picture

So a crash is optimistic.

Tue, 03/25/2014 - 20:40 | 4592378 DFCtomm
DFCtomm's picture

Yeah, that time has rolled around again.

Wed, 03/26/2014 - 01:17 | 4592915 MontgomeryScott
MontgomeryScott's picture

'So a crash is optimistic.'

Um, yeah.

In a crash, there is hope that survivors might manage to disentangle themselves from the wreckage before the machine implodes/explodes. Like, for example, a simple 'car crash'/ 'bus crash'/ 'train crash'/ 'plane crash'. As you might notice, the odds of this disentanglement go down with each increase in severity and speed. In the last scenario ('plane crash'), there really is NO hope, and people who walk away from such that claim to have been in one are deluded, as these were actually 'uncontrolled landings'. There are exceptions, of course, like the collision between the KLM and Pan Am 747's on the runway in Tenerife. SOME (I mean, a vey FEW) managed to survive, but it was by mere chance.

The forecast of a so-called 'crash' is, therefore, quite optimistic. It depends upon the conveyance that is being employed as to the severity of the odds of survival.

The so-called 'Fukushima Fifty' saw the crash of their particular conveyence (as did the lost souls in Chernoybl, Ukraine). Europe Japan, and now the United States, and the entire Northern Hemisphere, are beginning to feel the effects (as they have been since 1945). As far as 'financial' issues, this has been long-ago decided. I apologize for the lack of action that my people should have taken, on passage of the Federal Reserve Act of 1913. Don't be angry with me, though, because I wasn't there.





Wed, 03/26/2014 - 01:45 | 4592932 layman_please
layman_please's picture

I apologize for the lack of action that my people should have taken, on passage of the Federal Reserve Act of 1913. Don't be angry with me, though, because I wasn't there. "

federal reserve act is one the cruelest experiments on the mankind but what the fuck is your excuse for the lack of action on the 9/11 that your government perpetrated on americans and on the world, killing how many millions in result? you're a population with more firepower than rest of the armed civilians in the world combined but you are still more docile than herd of domesticated animals. i'm taking it out on you because the rest of the world is completely oblivious to the concept of liberty.

Wed, 03/26/2014 - 02:17 | 4592965 MontgomeryScott
MontgomeryScott's picture

One person, alone, with a few rounds, cannot possibly usurp the enormous powers of the military of the CONUS.


A crazed right/left wing patriot seemed to have snapped, and began attacking innocent government officials today. Thankfully, he was met by a hail of gunfire from our protectors, and has now been subdued. that's all we have on this story. Next up: American Idol star Jizm Bliebler has to go to the dermotologist to lance a boil, and our sports person from Hawaii, Kammana Wannaleighah, gets fresh and close to the studs of the Superbowl.

Would you please send us some more flouride over here? I think I want to kill you too for being such an asshole, but perhaps some Lithium or a dose of Prozac might help me alleviate and counter my aggresive feelings.




THANKS for your understanding, and, FUCK YOU.

I didn't see YOU and your whole army try to stop what was happening, prick.

Maybe, if this all works out, and we can survive this, I'll get the chance to KICK your PANSY little ASS. NO, WAIT! Come on over, boi. I'll do it PERSONALLY...


It's a fine line between cognitive reason, survival, and death, my friend. 330 million versus one? Well, the odds aren't very good, and most of my sorry-assed people are too chicken-shit to even TALK about re-establishment of the Constitution, what with all the APC's and tazers and meds and shit.

Wed, 03/26/2014 - 04:22 | 4593053 layman_please
layman_please's picture

i'm not expecting anyone to go on a shooting spree. being armed should reflect in the attitude.


i guess we are all fucked then.

Wed, 03/26/2014 - 03:25 | 4593030 CCanuck
CCanuck's picture

I....seee....dead people....


Tue, 03/25/2014 - 19:21 | 4592164 NoDebt
NoDebt's picture

Yeah, but the "fixed income" guys are supposedly smarter than "equity" guys.  So they'll see this coming a LONG way off and start to raise alarms and urge that the situation be addressed before it goes too far.  They'll also advise their clients to stay away from buying those bonds so as to avoid the chance of a large loss.

Tue, 03/25/2014 - 19:22 | 4592168 walküre
walküre's picture

Correct me if I'm wrong. The Fed holds most of the debt and in the grand circle jerk of things, the Fed is paying the interest they "earn" back to the UST. How much they make on the margins is anybodys guess. But hey, the Rothschilds have bills to pay and we really ought to be fucking thankful that they let us operate USA Inc. with the money they just happen to have saved in their families over centuries. If our great great great great grannies had never stopped rubbing the pennies, we would all be bankers now.

Tue, 03/25/2014 - 19:25 | 4592186 jubber
jubber's picture

...and Gold re-opens down and the Dow already up another 25 points...The Trueman Show continues

Wed, 03/26/2014 - 10:17 | 4593511 painlord-2k
painlord-2k's picture

The Truman Show went very strong up to the end.
Probably the last few shows were the most followed and catching.
And, then, there was nothing more to say than: Good Morning,  Good Afternoon, Good Evening and Good Night.

Wed, 03/26/2014 - 10:16 | 4593513 painlord-2k
painlord-2k's picture

The Truman Show went very strong up to the end.
Probably the last few shows were the most followed and catching.
End, then, there was nothing more to say than: Good Morning,  Good Afternoon, Good Evening and Good Night.

Tue, 03/25/2014 - 19:27 | 4592189 dizzyfingers
dizzyfingers's picture

"If it were possible to take interest rates into negative territory, I would be voting for that."

- Janet Yellen, February 2010

Next phase, happening sooon?

Tue, 03/25/2014 - 19:33 | 4592204 cynicalskeptic
cynicalskeptic's picture

Given that banks are paying 0.0025% interest and charging fees up the wazoo, aren't most people ALREADY in 'Negative Interst Rate' territory?

It COSTS most people money to keep money in a bank (anything under the FDIC limit seems to incur fees) - that sure sounds like negative interest to me.

Tue, 03/25/2014 - 19:39 | 4592220 walküre
walküre's picture

Yes, it's stupid and the banks know this. They're all putting pressure on the CBs to make a move upwards.

Tue, 03/25/2014 - 19:41 | 4592231 oddjob
oddjob's picture

.0025% is probably a generous return given the underlying value of the FRN.

Tue, 03/25/2014 - 20:36 | 4592373 GooseShtepping Moron
GooseShtepping Moron's picture

She should be careful about using the word "possible." Speaking in modal terms does strange and sometimes counterintuitive things to one's argument.

Real rates may already be negative due to the miscalculated CPI. I don't see any theoretical reason (there is perhaps a legal reason) why bonds couldn't be offered with a negative nominal rate of return, but it would be extremely difficult to justify the purchase of them. One would have to assume that all his other assets would be losing value even more rapidly than the bond.

This might actually happen should we enter upon an era of deep deflation and widespread default. But then we would have to assume two further conditions to justify negative rates: 1) The dollar (or whatever currency the bond was issued in) will still be accepted as currency at the maturation date; and 2) The negative-rated bond is backed up by ironclad default protection, as in "the cash is already locked up in a safe deposit box to which you hold the only key," or something equivalent.

It is virtually impossible to construct a scenario in which this would be preferable to just stuffing your cash under the mattress. Therefore negative nominal rates, while remaining theoretically possible, will almost certainly never appear in actuality. However, there is a more interesting conclusion to be drawn by returning to the observation that real rates may already be negative. If this is the case, it would indicate that we have been paying a premium simply to keep the status quo going; in effect, we have been paying the government and the financial system for the insurance they provide against the possibility of a general default (which is a pretty good description of the whole concept of TBTF, when you think about it).

That, in turn, leads necessarily to the conclusion that deflation is inevitable when real rates rise from their current vegetative state. Again, it should hardly take a rocket scientist to figure that out; but it is edifying to work through the logic anyway, and it brings us to a rather surprising and counterintuitive result.

Negative real rates already signal an oncoming deflation in spite of the fact that their cause is, ostensibly, inflation. When Fed asset purchases suppress rates, general price inflation does not occur in any obvious way but remains primarily a "financial phenomenon." This is what allows some economists to believe that the QE strategy is actually working: it avoids direct monetization of debts and it confines (but does not eliminate) moral hazard.

The problem is, none of this has any but the most tenuous connection with the real causes of the economic crisis, which are demographic and cyclical in nature and cannot be in any wise effected by monetary policy. The Fed's strategy is not so much wrong as it is otiose; it does nothing but add huge amounts of redundant liquidity to the system to prevent the triggering of a default cascade. The same effect could have been produced by less intrusive methods—by rewriting the relevant bankruptcy laws, for example. But no approach can possibly avoid the necessary deflationary outcome, which is why the Fed's policy is basically just a waste of time, an empty exercise in throwing money from one pocket to the other.

Tue, 03/25/2014 - 22:01 | 4592615 Tulpa
Tulpa's picture

Apple can't stuff $100M under a mattress every month.  At some point logistical concerns take over -- think of negative interest as a kind of storage rental.

Wed, 03/26/2014 - 00:56 | 4592897 GooseShtepping Moron
GooseShtepping Moron's picture

I believe I implicitly adressed that angle. However, you can't just evaluate these kinds of things ceteris paribus. In a world where negative nominal rates became a reality, I don't think Apple would even exist let alone net themselves 100 million a month.

But just for argument's sake, let's say they did. Would it really be that hard for Apple to store cash (or gold) in its own vault? They must have one somewhere. If not, they could build one pretty quick.

Wed, 03/26/2014 - 01:46 | 4592948 MontgomeryScott
MontgomeryScott's picture

WTF does 'modal term' mean, anyway? Is this 'intermodal', like measuring actual shipping times as they happen? Is this actually 'MODEL', like a small re-construstion of an object in a smaller scale? Is this a 'MODE', like a fashion in which an object or person takes a set of parameters and tries to repeatedly apply the same logic rules in order to try to affect a change in outcome? WTF is 'MODAL'? Is this a CONTRACTION of a word that you think is relevant, and therefore super-secret to those who are 'unejumacated'. or some shit? SERIOUSLY...

LET'S discuss the word 'term' for a moment, Klink.

There is 'terminology' (which is apparently the 'study of the science of terms'). TERMINAL, which, of course, sets a deadline for the end of that being described (like, for example, 'terminal cancer'). In British spheres, a 'term' is a proscribed period of time within a child must attend ejumacation classes. I took two and a half TERMS, in Australia, before repatriating to the United States, in my youth. A TERM is best described as a pre-addititive descriptor that sets a definition of time over the descriptive word or meaning that is intended.

ALL THINGS BEING EQUAL, however, you can't just evaluate these things because you are supposedly intelligent and a nazi and all; However, you can't just evaluate these kinds of things ceteris paribus;... Nope.

All right. MODUS: The commonly vulgate definition of the word 'method', but in two descriptive words, 'METHOD OF', indicating a present, yet persistent tense; which can be present when describing actions either in the present or the past.

I really liked those 'smart fuckers' that tried to get me all jizzed up about the new 'transmodal' shipping hubs, back in about '82. They tried to keep telling me about 'transloading operations' and shit. Smart fuckers, full of 'new old words', and all, they are all either dead or wish they were.

Do you know what the expression 'JIZZED UP' means?


Wed, 03/26/2014 - 02:38 | 4592993 GooseShtepping Moron
GooseShtepping Moron's picture

Obsess much?

You might have found a clue as to the meaning of "modal" when I specifically linked it to the word "possible" in the foregoing sentence. Wikipedia is your friend. No, no, don't strain yourself. Let me get that for you.

Now term on the other hand...You're right; that is a tough one. You would probably have to search far and wide before you stumbled upon an esoteric definition like "A word or group of words designating something..."

And of course only the most hifalutin' poindexter would know that ceteris paribus has a fairly straightforward application to economic anlyses. (Zero Hedge is an economics blog, you know.)

I'm not going to discuss "jizzed up." Unlike some others here, I prefer to keep it PG-13.

Wed, 03/26/2014 - 09:33 | 4593375 painlord-2k
painlord-2k's picture

If Apple have too much cash, it can just use it top buy stuff.
Like shares, commodieties, buildings, etc. 

Tue, 03/25/2014 - 19:31 | 4592200 Spungo
Spungo's picture

Thank god we can monetize debt. We'll never turn into venezuela! American exceptionalism!

Wed, 03/26/2014 - 02:00 | 4592958 MontgomeryScott
MontgomeryScott's picture

If you don' like the way we monetize debt, then don' sleep at night. Yo, 'dis is a warning from Alexandria, VA, and duh boyz at the DHS (keeping the world safe since Nixon, and forever, and ever, Amen, blessed be the Federal Reserve, in glory, en perpetua). We under-stan' you might have relatives in duh 'old country', an' all.



Tue, 03/25/2014 - 19:34 | 4592208 Yen Cross
Yen Cross's picture

    We'll just make Belgium another territory of the "United States of The Banana Republic" and shell Co. for all our FRNs after the world dumps them...

Tue, 03/25/2014 - 21:12 | 4592481 Ceylon tea
Ceylon tea's picture

Que long basketball gingerbread men

Tue, 03/25/2014 - 19:40 | 4592227 blindman
blindman's picture

forward guidance consists of a six shooter
loaded all around in a game of russian roulette
where the players have been psychopharmecueticaly
disembodied to know not what they ask and request
nothing more than a seat at the table, with one
wish. please shoot me in the head, who ever
i might be?
the irs can do that to a human mind.

i'm starting to hate this world of bullshit,
semiotic, tangential non sense. that is the
plan you know. engender the rabble with disgust
to render them, generally, amenable to slaughter,
ubiquitous. no one is the wiser and there are no
nuernberg type trials.
what were we talking about? oh yea, bit con.
Bap Kennedy (& Steve Earle) - Angel is the Devil
here i have this list of entertaining links ....
Keynesian Economic Theory As Applied To Private Sector Independent Contracting
R.L. Burnside-"It's Bad You Know" from "Come on In"
fracking fracking
The Rolling Stones - Memory Motel (with Lyrics)
.."got the MInd of a fool and ... use it well...
just a memory, and it used to mean so much to me..." k.r/m.j.
Is San Francisco New York?
"...Whatever the Silicon Valley gold rush has done or will do, it’s already given us an entirely new species of yuppie mogul: the one who stockpiles bitcoin and speaks in hacker pidgin, the one who wears Uniqlo on a Gulfstream and obsesses over single-origin coffees. The kind, in other words, who plays the underdog even while sitting on top of the world."

Tue, 03/25/2014 - 19:41 | 4592232 NoDecaf
NoDecaf's picture

G-7 to Russia - "you're not our friend anymore"

Tue, 03/25/2014 - 19:47 | 4592244 Newmoney24
Newmoney24's picture

how has nobody mentioned Japan

Tue, 03/25/2014 - 21:51 | 4592579 AdvancingTime
AdvancingTime's picture

Please let me do it! Japan is the most indebted developed country in the world and its future prospects are dim and getting worse. If inflation begins to take root it will place upward pressure on Japanese bond yields and raise the cost of government to service its massive debt.

As the yen drops even higher stock markets in Japan will fail to protect the wealth of those invested within its borders. With the BOJ set to absorb half of the government bonds planned for sale this fiscal year, domestic investors have already started venturing overseas for higher yielding assets. If this turns in to a tsunami of money fleeing Japan it will constitute the end of the line for those holding both JGBs and the yen. More on this subject below,

Tue, 03/25/2014 - 19:48 | 4592245 Bunga Bunga
Bunga Bunga's picture

Don't worry, US has technology aka printing press.

Tue, 03/25/2014 - 19:58 | 4592279 Fix It Again Timmy
Fix It Again Timmy's picture

I'm actually surprised that it's only 26%...

Wed, 03/26/2014 - 05:04 | 4593065 Disenchanted
Disenchanted's picture

That's only what they're admitting's probably much higher.

Tue, 03/25/2014 - 20:00 | 4592283 A Lunatic
A Lunatic's picture

And they're wasting the rest of it......

Tue, 03/25/2014 - 20:15 | 4592316 22winmag
22winmag's picture

What could go wrong?

Tue, 03/25/2014 - 21:27 | 4592519 espirit
espirit's picture

I see AR's and green tips getting cheaper by the day.

No place is going to be safe.

Tue, 03/25/2014 - 20:31 | 4592365 vincent
vincent's picture

Puerto Rico, IL, MI, CA, NJ, will all have AAA credit after their bankruptcies.

Problem solved

Tue, 03/25/2014 - 20:47 | 4592389 essence
essence's picture

Maybe it's just me, but I see many going in spurious directions.

1) first and foremost is that government can't seem to live within a budget. For whatever reasons, it always seems to spend more than it takes in. Attribute that to human nature I guess. Whatever, the goal should be to keep within budget.

2) Yeah, I get the argument about Usury/Interest and all that, but even in a no interest 'greenback' environment, a government still has a propensity to spend more than it takes in (notice how I did not use the term 'EARN'). That would still result in inflation of the greenbacks ('cause we know government just can't live within a budget).

3) Our very money system has been perverted by the banksters such that debt, is now our 'money'.
Strange, but true. No debt, no money.  This isn't how the U.S. founding fathers envisioned things. In fact they went out of their way to create a system such that this situation wouldn't happen.  However, Banksters (overwhelmingly jewish) find a way and since the creation of the Fed they had a system tailored to their needs. Always keep in mind the Fed is owned by the big banks, and the big banks are owned by ..... (anyone??? has anyone definitely traced out the stock ownership and the loyalties of the board of directors minions of the TBTF western banks). Probably, only the NSA has that capability (and that's why it was hijacked, ---can't have the plebes controlling the high ground & its visibility into matters).


Now, consider what happens if we unilaterally reject the existing debt. Keep in mind that these days, debt is someones asset (just ask Bill Gross about all the pension funds he indirectly oversees). Supposedly Arrmagation happens, or at least to those who haven't gotten out of the system. Even those that have could very well face tough times.

On that cheery note, I'll saunter off.


Tue, 03/25/2014 - 20:53 | 4592423 yogibear
yogibear's picture

Fed's fractional reserve borrowing means it holds a lot more in European swapped debt as well.

Fed's mark to fantasy accounting.




Tue, 03/25/2014 - 21:06 | 4592427 the question
the question's picture



Can someone fill me in here? Where is this $415 billion coming from? I come up with $248 billion "Interest on Treasury Securities Held by the Public" on the Financial Report of the U.S. Government, Statement of Net Cost, on the Financial Management Service website. So what is the remaining $167 billion? Is this the amount the government pays "itself" for amounts owed to the entitlement programs?

Tue, 03/25/2014 - 21:10 | 4592473 harleyjohn45
harleyjohn45's picture

I think Tyler was clear, the 248 billion is the 17% they own up to, the other 167 billion is monies owed to the social security trust fund that they pissed away, but they don't count it.  As Tyler says, if it's owed it's owed. 

Tue, 03/25/2014 - 21:02 | 4592446 jjsilver
jjsilver's picture

Pay interest to who? and for what?

Tue, 03/25/2014 - 21:12 | 4592480 blindman
blindman's picture

to sustain the system of fraudulent induction
as the basis of commerce and the basic unit
of financial measure.
R.L. Burnside-"It's Bad You Know" from "Come on In"

Tue, 03/25/2014 - 21:23 | 4592510 Problem Is
Problem Is's picture

Obama Bin Lyin' Our Subprime Leader

Yep... Already burned through that 2nd HELCO and now we are feeding the kids and buying gas to commute with our 6th MasterCard from Biden Bank of Delaware... Since the other 5 credit cards are all maxed out...

Tue, 03/25/2014 - 21:43 | 4592555 AdvancingTime
AdvancingTime's picture

Making the ugly math simple to understand is no easy task, but lets have a go at it. Not lying about the numbers to arrive at a clear picture of reality is important.

In the article below is the formula I have worked out that shows how every billion dollars Washington spends cost $3 for every American. What is important it that this includes infants, children, teenagers, the non working-both self sufficient and those on government assistance, the retired, and the elderly in nursing homes.

Tue, 03/25/2014 - 23:44 | 4592806 Radical Marijuana
Radical Marijuana's picture

This runaway interest on the debt due to "money" made out of nothing as debts was originally inherent in the structural design of the system. Quite a few excellent quotes about the nature of the sort of monetary system can been found sprinkled throughout history uttered by those who were able to understand it, and state their opposition upon that basis. However, the international banksters were nevertheless able to persistently apply the methods of organized crime, such as bribery, intimidation, and assassination of those who could not be bribed or intimidated, in order to successfully corrupt governments to legalize private banks counterfeiting the public "money" supplies, in ways which were necessarily, due the basic structural design of those systems, going to drive debt slavery towards becoming debt insanities, at an exponentially accelerating rate. ... We have not seen anything yet! The overwhelming vast majority of people do not understand, because they do not want to understand, and that includes the vast majority of people who like to propose superficial idealized "solutions" regarding what the public money supply should be, instead of what it already actually became.

The American Democratic Republic has gradually committed suicide, bit by bit, as it led the rest of the world to join it in the rush to commit collective suicide. Of course, perhaps ironically, that was due to the history of the murder systems, which backed up the monetary systems being able to successfully get away with operating through the maximum possible deceits, which was the foundation of enabling financial systems which were built on the maximum possible frauds, of governments forcing everyone to accept and adopt the use of a public "money" supply that was created out of nothing as debts.

Such as system automatically and necessarily drives its debt slavery to grow until it becomes amplified to the magnitudes of debt insanities, which become mathematically impossible to ever repay, since nobody can keep up forever on the accelerating treadmill of such a system, which creates "money" out of nothing as debts in the first place. In that context, bothering to write articles about that problem, or to bother to write comments about that situation, appears to be practically pointless?

It is impossible to exaggerate the degree to which our monetary and taxation system has become almost inconceivably crazy and corrupt. Every economic decision is made inside of people being forced to accept the fundamental fraudulence of the accounting system that they operate through as a fact of life. Every economic decision is made on the basis of evil deliberate ignorance towards the overarching insanity of the established systems being based on making "money" out of nothing as debts. Every economic decision made in that context is made on the basis of deliberately ignoring and misunderstanding the basic laws of nature, because such a system will not admit nor acknowledge the radical truth about itself doing what it is actually doing, which is backing up frauds with force, in an ever greater spiral of increasing fraudulence!

That system of legalized lies, backed by legalized violence, depends upon the real history of the ways that governments are the biggest forms of organized crime, controlled by the best organized gangs of criminals. Each successive little step whereby the international banksters were able to capture control over the government of the USA, and most of the rest of the world, led one step further along the path of committing civilization to becoming collectively crazier. The basic problem with the triumphs of backing up frauds with force is that the force never makes those frauds become true. Instead, each time that the principles and methods of organized crime become even more successful in capturing control over the political processes, in order to legalize more lies, and back those up with more legalized violence, the society in which that is happening as a whole become more insane.

After more than a Century of that runaway, exponentially accelerating social insanity situation, we appear to be nearing the point where that established system can not double the debts yet again, one more time, in order to keep that colossal pyramid scheme growing, especially since the underlying natural resources have also be strip-mined to the point of becoming unsustainable. Therefore, we are on the verge of debt insanities erupting into death insanities, since each time that the murder system was incrementally able to operate through the methods of organized crime, to keep the fraudulent monetary system going, the overall debt insanities grew too. Since behind it all was the way that the debt controls were backed by the death controls, through the actually combined ways that the money/murder systems were operating, the civilization as whole become crazier and crazier.

As we reach the peak of debt insanities, we are reaching simultaneous Peak Insanity, which corresponds to the Peak Everything Else, which are all interrelated to the paths of exponential growth reaching their tipping or turning points. However, there is nobody within those established systems that is able to respond within those systems, because they would have to see the radical truth about those systems in order to be able to do that. However, their successes within those systems were always due to them being able to continue to operate through attitudes of deliberate ignorance towards the absurdity of the public "money" supply being created out of nothing as debts, which was always due to the triumph of the application of the methods of organized crime, both of which basic social facts were banished from being able to be perceived and/or admitted by everyone who was successfully operating within those systems.

Tragically, there is no real reset to the actually existing systems that can operate outside of what those ARE, namely organized systems of lies, operating robberies, in which money is measurement backed by murder. Those are obviously the actual social facts, and furthermore, those must necessarily be the actual social facts. However, almost everyone who is successful depends upon being able to deliberate ignore those basic facts, in order to successfully operate within those systems. Moreover, almost everyone who begins to understand those basic facts still then tends to promote bullshit "solutions" which are based on asserting that those should not be the facts.

We are collectively drowning under an exponentially rising tide and deluge of social insanities, which are due to the excessive triumphs, for too long, of operating systems of enforced frauds, wherein, and whereby, people were able to live through their participating inside of those systems of lies, operating robberies, which they were still somehow able to not perceive, and/or admit that they perceived. The overall runaway systems of debt slavery, built into the structure of the system where the public "money" supply was created by private banks, out of nothing as debts, necessarily generated debt insanities at an automatically exponential rate. Therefore, civilization is headed towards some series of psychotic breakdowns of the absurd state religions that have dominated and controlled it. However, in that context, it is practically pointless to bother to explain those problems, since one is attempting to reason with people who are collectively too insane to comprehend how insane they have become. Furthermore, that includes almost all of the controlled opposition groups to the established systems, just as much as it includes those who are operating the established systems.

The deeper depths of these debt insanities are to be found in the history of philosophy, and some slight enlightenment might be found through intellectual revolutions in the philosophy of science. The problems are quite profound, because the combined money/murder systems do make sense as expressions of the ways that general energy systems manifested through the forms of human civilizations. However, the heart of the matter continues to be the paradoxical ways that success in warfare depended upon deceits, and therefore, the financial system built on that foundation became successful on the basis of frauds. In the context, I continue to find guys like Simon Black, in the amusingly misleading blog entitled the Sovereign Man, may serve as a whipping boy to illustrate the ways that relatively good analysis of the nature of the problem can nonetheless be continuing to utterly miss the boat when it comes to "solutions." The bedrock issue is that sovereignty is based on the power to rob, which all human beings share to some degree, but which powers have been assembled and channeled through the history of warfare to take the forms we see now in our political economy.

It is practically impossible to exaggerate the ways in which, and the degree to which, we live in Bizarro Mirror World, where everything is being seen backwards, but almost nobody understands that. Given that almost everyone understands almost everything in backwards and distorted ways, but they almost all agree with each other about those delusions, including both most of those operating the established systems, as well as most of those in the controlled opposition groups, who claim that they are against those operations, tend to both agree on continuing to perceive everything in similarly backwards ways, there are no good reasons to believe we are going to be able to get out of this runaway entrapment into debt insanities other than through some series of psychotic breakdowns of our civilization.

Meanwhile, I have yet to perceive any good grounds to believe that it is worthwhile to publish articles or books, or make videos about these topics, nor to bother to comment upon those activities. I see no objective reasons to believe that the collective craziness of our culture could recover, without having first gone through psychotic breakdowns, due to its debt insanities, which it can not understand, because it does not want to understand, were due to the ways that its debt controls were backed up by its death controls. Rather, my bothering to do so is merely my own expression of how I have crazily adapted to living inside of an utterly crazy civilization.

The grand paradox of organized crime becoming and controlling the government is that it can never admit the radical truth about itself. Therefore, it is impossible for that kind of civilization to resolve its real problems, and thereby recover from its collective insanity. Instead, these numbers representing debt insanities, which are mathematically impossible to repay, and which automatically become more impossible ever repay, within the basic money-as-debt systems, keep on getting worse and worse, and therefore, keep on building up the potential for social storms of death insanities to go out of control.

There are no solutions which are genuinely possible that can be based on anything but the radical truths that money is based on measurement backed by murder. Since that basic fact, that the debt controls are backed by the death controls, is as deliberately denied and suppressed as it possibly can be, throughout every point of the compass of the established systems, as well as across pretty well the full range of promoted or tolerated state religions and competing ideologies, there are no politically practical ways to cope with society increasingly driving itself towards its own mad self-destruction, due to enforcing its own frauds, to drive itself onwards, to even greater crescendos of debt insanities, which nevertheless are mostly not admitted and/or acknowledged to exist, for the same reasons why that social insanity developed in the first place.

Wed, 03/26/2014 - 01:36 | 4592935 honestann
honestann's picture

Yes.  What you're talking about is one of the two realizations I had at age 4 that seems to have led to all the others.  That was the recognition that different people AKA "cultures" on different parts of the planet find exceedingly different ideas and conditions to be "absolutely normal" and acceptable.  And more than "acceptable".  Most people in most cultures believe "other ways are almost unthinkable"... even as they know people elsewhere live very differently.

While I suppose the domains and magntidues are these differences have lessened a fair bit over the past lifetime (3 or 4 generations), they still exist.

And the key observation for me was... most humans not only accept utterly arbitrary ideas and conditions as "the only and obvious way", they openly reject anything else.

Which is exactly what you say... in slightly different terms.

To fix these problems is HOPELESS... because the vast majority of humans accept, sanction, and even support whatever arbitrary NONSENSE is imposed upon them... even when alternatives and counter-examples exist, and are visible to them.

Which is why I always come back to the notion of "frontiers", where the tiny fraction of human beings who are willing to "entertain and attempt other ideas and methods" can go... and given them a try.  Absent "frontiers"... no hope, because the predators will crush anyone who attempts to avoid the ideas and conditions of the status-quo.

I know that you RM prefer to study the petri-dish (culture) you and other humans live in every day, and you may of course do that.  But your own conclusions point to the fact that the dynamics of the current system push it to make insanity and existence worse, not better.  Which is why such "extreme" ideas as are proposed by "far out kooks" like me may be worth consideration.  Because even if they ARE "far out", the alternative is... exactly what you say.  And that sucks.

When the only possible way to survive is to attempt risky action, then risky action may not be as stupid as it may appear on the surface.  In fact, more than anything else, it is the same kind of "normalcy bias" that causes these problems that prevents most people from considering unusual, risky actions to escape the existing closed loop paradigms.

Wed, 03/26/2014 - 02:33 | 4592992 Radical Marijuana
Radical Marijuana's picture

I agree with you, honestann.

Lucky for me, I grew up in British Columbia, Canada, which was as much on the barbaric fringe of the British Empire as it was possible to be. (The Pacific Northwest was one of the last places put in detail on the European maps.) Therefore, in my youth I enjoyed about more real freedom than is now actually available almost anywhere else that I am aware of. Pretty well everywhere that people can live, there are already too many people there. The places where I grew up no longer exist in the way that they existed when I was young. For a while, I went looking for other places, but eventually I gave up, not being able to find anywhere that airplanes did not fly over, or boats did not visit.

Despite my initial efforts to do so, I have been forced to conclude that there are NO "frontiers," in the sense of no places which are not already subject to claims, backed by coercion, of somebody else. I have ended up doing what I do because I found that there is nowhere to escape from other people, especially if they go completely crazy and do something like start a war with atomic bombs. Worrying about that was the main reason why I ended up on my particular path, which has resulted in proving more and more what you also concluded in your reply to my comment.

Tragically, therefore, you are probably right "Absent "frontiers"... no hope!"

Wed, 03/26/2014 - 20:18 | 4596519 honestann
honestann's picture

Yeah.  I'm guessing from your voice that we are both "not very old yet".  But both of us have seen a very substantial reduction in day-to-day liberty (in any even slightly populated area), and vanishingly few areas that are no longer populated [to any significant degree].

As to the notion there are no "frontiers", I suppose that depends upon how completely independent and secure from later "invasion" you demand of a place to qualify as a [viable] "frontier".  Where I live, nobody knows I am there, nobody lives within ~125km, nobody can reach me by ground vehicle, nobody can recognize any habitation exist at my place from overhead (unless they are flying very low, very slow and being very observant).  Nonetheless, I am [of course] somewhere nominally considered "inside a nation".

OTOH, I spent a lot of time, and well over half my life savings to establish these self-sufficient digs in the extreme boonies.  Thus very few people are willing to do something like this, even if they had sufficient savings ($400K, plus or minus).  Plus, I also had the practical advantage of living at a remote self-sufficient (except food) scientific outpost for several years, which forced me to be aware of, keep care of, debug and repair on occasion, self-sufficient systems (like solar-panels, wind-turbine, battery-banks, high-power DC-to-AC systems, water-collection, water-storage, water-purification, and so forth).  That experience greatly increased my confidence I could create and maintain my own systems.

Still... not many people are willing to escape [what they consider] the comfort of their familiar status-quo.  That's the part that remains AMAZING to me.  I've always wanted to explore NEW and DIFFERENT-AS-POSSIBLE domains.  I know that makes me seriously "weird", but given how bad the status-quo is getting, I remain surprised that so few people are willing to consider alternatives.

Perhaps it is just my unique experiences that make me this way, but I'm not afraid.  I live 125km from the nearest human being, and pretty much nobody could come help me even if I needed help and was stupid enough to ask.  When I flew 4000km lets back and forth between south-pacific islands and south america in my little 250kg airplane (empty/dry), I was not afraid.  Well... not really afraid, or at least only for a few seconds now and then when I focused on exactly what I was doing and the situation I was in given worst case possibilities).  But solitude... boy... that's the situation that is least scary to me.  It is humans who are dangerous, not NOTHING.  Okay, when I finally live in outer-space, in a sense, NOTHING is what I might worry about now and then.  Hahaha.  As in explosive decompression.

Yes, you are correct to say "there is no escape from humans".  I suppose you could make the case that even when I move into space, live in my spacecraft behind asteroids (or sometimes 5 to 50 meters inside an asteroid)... that theoretically some human could figure out where I am, and decide to mess with me.  But the chances of that are so close to zero that other potential dangers (from simple physical inorganic aspects of outer space) will be thousands if not millions or billions of times more dangerous than human predators (or more generally, organic predators).

I guess there is one other possibility that we both know about, but don't mention very often.  It is POSSIBLE, albeit very unlikely, that if the predators-that-be completely blow up the current system in spades (more than we generally envision), that perhaps they will so disable their own capabilities that perhaps non-predators might either be able to establish effective defenses... or enjoy a repeat of the phenomenon of "frontiers" for awhile.  The problem with this, of course, is that the predators will simply recreate the framework of global predatory domination, returning everyone back to the current state of affairs yet again.

What most people don't realize is this.  AFTER any disaster (small, medium, large, enormous), the predators will retain massive superiority of technological and military systems.  Not because "the rest of us" couldn't take it away, but because the rest of us WILL NOT take it away.  It would be trivial to take away now if even 1% of the population would make a firm decision to do so, but only 0.0001% (if that) are willing to take actions against the predators-that-be... because they still believe the utterly insane notion that somehow these predators have some kind of legitimate claim on everyone else.  That is so stupid the very thought makes my brain spin in disbelief, yet I know it is absolutely true nonetheless.  Which is why were both understand the current state of affairs is already game over.  At least in any earth-bound paradigm.  Which means, the entire story of mankind will come down to... can we get off this rock and establish a self-sufficient existence in this solar system --- or not.  And since it is possible that humans are the only sentient beings in the universe, the fate of the entire universe may come down to this question.  Which is revolting as hell, but also indicates how worthwhile the effort is.

Wed, 03/26/2014 - 20:25 | 4596544 FredFlintstone
FredFlintstone's picture

honestann, are you really a hot asian chick living in the remote wilderness who can fix things and fly planes?

Wed, 03/26/2014 - 21:38 | 4596800 honestann
honestann's picture

Whether I'm "hot" or not is definitely a matter of opinion!  Maybe I was a bit in my 20s, or so I might almost be able to believe.  But yeah, I do live in the remote wilderness and fly... well... only one dinky little 250kg airplane (dry/empty), namely my own.  I used to rent and fly small Cessnas before finally someone made an aircraft I could afford and was efficient and high-tech enough.  That is the pipistrel virus 100 sw with 912iS engine, extreme range tanks (and fittings for additional in-cabin fuel blatters), and full-bore glass cockpit with GPS, autopilot and etc.  At best economy speed (~240kph) it gets about 75mpg, which is amazing!  At top speed (~290kph) it gets just over half that.  Actually, "top speed" is 302kph, but... that's a huge waste.

I'm definitely not as amazing as I may seem, though I certainly am an extreme outlier in a great many ways.  My interest and expertise in astronomy since age 4 put me in many unusual situations at young ages, and made my gradual development into "total wacko" a lot easier.  Seriously.  Nothing like spending whole nights (and later "years") alone at remote sites to help one get comfortable with solitude and learn to take care of oneself (and learn to be prudent, and prepare for potential dangers in advance).  I definitely can't fix everything, but I did learn to design, debug, implement all sorts of electronics and computer devices at a young age, and that helps.

Oh, when I said "create my own self-sufficient systems", I did not mean to imply that I did anything like "fabricate solar cells" or anything like that.  In fact, everything was off the shelf, and I merely assembled existing subsystems that anyone can buy.  But yeah, I can debug and fix many electronics devices.

Wed, 03/26/2014 - 21:39 | 4596857 FredFlintstone
FredFlintstone's picture

You are pretty cool. I like the way you dealt with MeelionDollarBogus on AGW. Your viewpoint on how others try to control us is enlightening to a reformed corporate slave. My hat is off to you. Stay safe out there and enjoy your tranquility!

My oldest son just bought a sailboat and now lives on it in Key West with his GF. I am jealous.

Wed, 03/26/2014 - 23:05 | 4597151 honestann
honestann's picture

Did you see the photos of the huge yacht I almost purchased ~3 years ago?  I had links in one of my messages several days ago, along with links to several properties I and others were trying to find collaborators to buy (cuz none of us could afford them ourselves).

I made my offer 1 day too late.  My life would be quite a bit different today if I had managed to purchase that gorgeous 40-meter (129-foot) vessel.  Getting that might have been the biggest mistake of my life... or possibly the opposite.  I swim like a fish, but had no significant experience with vessels, so... asking for trouble!  I would probably have needed to hook up with some sailor dude or dudette for a year or three to get myself up to speed.

Wed, 03/26/2014 - 03:48 | 4593040 jubber
jubber's picture

Can't wait to see this discussed on CNBC later ...Yawn

Wed, 03/26/2014 - 03:54 | 4593042 pcrs
pcrs's picture

Does not matter fed recycles all interest income back to the treasury

Wed, 03/26/2014 - 05:08 | 4593066 Disenchanted
Disenchanted's picture


Wed, 03/26/2014 - 06:36 | 4593092 Atlas Crapped
Atlas Crapped's picture

Understand who governments "pay interest" to and understand who the narrators are.

Wed, 03/26/2014 - 06:36 | 4593093 Atlas Crapped
Atlas Crapped's picture

Understand who governments "pay interest" to and understand who the narrators are.

Wed, 03/26/2014 - 06:49 | 4593101 Ace Ventura
Ace Ventura's picture

Unless I'm misunderstandalizing something.......we're already well past 26%. Consider that AT LEAST since 1984, 100% of income tax was going to pay interest on the debt. That was 30 freakin' years ago, people. You can imagine what the numbers must be like today. For instance, the TOTAL national debt was $1.5 trillion in 1984, with an annual deficit of $185 billion. What's it up to these days, something like $17+ trillion? And don't we monetize about half that 1984 deficit EACH MONTH these days?

Read the 1984 Grace Commission Report. Yeah I know, it's a gubbermint 'commission'......but that only makes the issue more dire, since the situation was likely WORSE than noted in the report.

When this goes, it's gonna go like a Christmas tree that's been sitting in the living room for 4 months.......and zippo lighter.

Wed, 03/26/2014 - 07:06 | 4593111 jubber
jubber's picture

Huge ramp acroos everything this morning, article getting no coverage by anyone

Wed, 03/26/2014 - 07:56 | 4593151 earnulf
earnulf's picture

While the numbers viewed in this way are staggering, it's just the tip of the iceberg.    That 415 billion dollar figure is based on an interest rate that is 1/3rd of where it has been historically.     Multiply that 415 billion dollar figure by 3 and you'll see why the FED is still trying to hold things together with spit and rubberbands.

1.2 Trillion dollars in interest at 6%.    Heaven forbid we hit 10-12%.    With the FED holding Treasury rates, now would be a very opportune time to start generating a surplus and begin paying things down, but no one likes the pain.    3% would be all it would take.   3% less spending, 3% increase in taxes.   Thing is balanced in 4 years, suplus in five.   Problem is that everything would have to take a cut, including corruption and cheating.   Forget defense, the waste and corruption is where the big dollars are being flushed.    Drug and means test anyone getting federal aid for anything.    3% is easy.

Problem is that we may not have five years, we may already be airborne over that cliff, waiting for the sudden stop at the end.

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