Painful look at the future of public debt

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investorzzo's picture
investorzzo
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Painful look at the future of public debt

Debt Projections
"From this exercise, we are able to come to a number of conclusions. First, in our baseline scenario, conventionally computed deficits will rise precipitously. Unless the stance of fiscal policy changes, or age-related spending is cut, by 2020 the primary deficit/GDP ratio will rise to 13% in Ireland; 8-10% in Japan, Spain, the United Kingdom and the United States; [Wow!] and 3-7% in Austria, Germany, Greece, the Netherlands and Portugal. Only in Italy do these policy settings keep the primary deficits relatively well contained - a consequence of the fact that the country entered the crisis with a nearly balanced budget and did not implement any real stimulus over the past several years.
"But the main point of this exercise is the impact that this will have on debt. The results plotted as the red line in Graph 4 [below] show that, in the baseline scenario, debt/GDP ratios rise rapidly in the next decade, exceeding 300% of GDP in Japan; 200% in the United Kingdom; and 150% in Belgium, France, Ireland, Greece, Italy and the United States. And, as is clear from the slope of the line, without a change in policy, the path is unstable. This is confirmed by the projected interest rate paths, again in our baseline scenario. Graph 5 [below] shows the fraction absorbed by interest payments in each of these countries. From around 5% today, these numbers rise to over 10% in all cases, and as high as 27% in the United Kingdom.

http://seekingalpha.com/article/202268-a-painful-look-at-the-future-of-p...

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DrKrbyLuv
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Re: Painful look at the future of public debt

Ouch!  The debt simply cannot be repaid which leaves us with three choices:

  1. Default on the debt and lose our collateral (public lands, infrastructure and private property).  This would cause the loss of our remaining sovereignty and subject us to IMF "austerity measures."
  2. Borrow more which will make the problem worse but it may push it down the road a few years.
  3. End the Fed and issue and control our own currency - pay back the principal on the national debt for free.

Larry

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Re: Painful look at the future of public debt
DrKrbyLuv wrote:
  1. Default on the debt and lose our collateral (public lands, infrastructure and private property).

Larry,

How exactly do you think a default on debt will lead to the lose of the collateral you mention?  (lands, infrastructure and private property)  Seems to me that we are talking about dollar denominated unsecured debt.  I can see how until we default, TPTB can use the monetary system to extract the collateral you list, but I don't see how default will not end that game for them.

We are not Greece or California.  Our debts are denominated in a currency that we control.  I don't doubt that the eventual outcome, after several rounds of quantitative easing of our debt based monetary system fails, will be to print our own sovereign currency.  I am just not convinced that solution will be any better.

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DrKrbyLuv
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Re: Painful look at the future of public debt

goes211 wrote:

How exactly do you think a default on debt will lead to the lose of the collateral you mention? (lands, infrastructure and private property) Seems to me that we are talking about dollar denominated unsecured debt. I can see how until we default, TPTB can use the monetary system to extract the collateral you list, but I don't see how default will not end that game for them.

Hello goes.  When a borrower defaults on debt, the pledged collateral is usually taken.  It is not much different when it comes to nations as collateral is taken though it usually is through deceptive "re-packaging" of the debt through the IMF.  We are seeing the beginning of this phase in Greece today and it inevitably includes "austerity" measures that means that pensions, 401-Ks, entitlements, education and health care are rolled back.  National sovereignty erodes and taxes are added and increased.

During this phase, infrastructure (e.g. highways, water works, utilities) may be privatized in order to reduce the debt.  Next are more drastic measures, here are a couple of examples that we have already agreed to: 

  • Congressional Record, March 9, 1933 on HR 1491 p. 83.  "Under the new law the money is issued to the banks in return for government obligations, bills of exchange, drafts, notes, trade acceptances, and bankers acceptances. The money will be worth 100 cents on the dollar, because it is backed by the credit of the nation. It will represent a mortgage on all the homes, and other property of all the people of the nation."
  • FOURTH WORLD WILDERNESS CONGRESS, which was held in Denver in 1987. Some of the precedings were withheld from the general public. With only the bankers in attendance, the topics discussed centered on the creation of a "WORLD CONSERVATION BANK" with collateral being derived from receipt of wilderness properties throughout the world.This bank would have central bank powers similar to the Federal Reserve. It would create currency and loans and engage in international discounting, counter-trade, barter and swap actions.

    Rothschild personally conducted the monetary matters and the creation of this WORLD CONSERVATION BANK. This bank would refinance by swapping debt for assets. A country with a huge national debt would receive money to pay off the debt by swapping the debt for wilderness lands. The plan was to swap one trillion dollars of Third World Debt into this new bank. In the long term, when the countries won't be able to pay off the loans, governments from around the world will give title to their wilderness lands to the bankers.

The land is desirable as it may contain valuable resources.  The plot is not just to run up our debt, it is to use the debt to take total control of lives and property.  We have no way of knowing what other secret collateral and terms may be in place.

There is some precedence for U.S. bankruptcy as it took place in 1933.  In the 1920's, the U.S. had 26,000 metric tonnes of gold.  After the bankruptcy, we had little if any left.  Private gold was also seized at a rate well below market value.  The IRS was turned over to the IMF to collect the old debt and congress was superseded by a new imperial presidency.  The U.S. Treasury came under the auspices of the international bankers to ensure repayment.  And, there were many foreclosures on property and businesses.  You may not have known this but, the U.S. has been under "emergency martial law" since 1933.

This time it will be far worse...

Larry

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Re: Painful look at the future of public debt
DrKrbyLuv wrote:

Hello goes.  When a borrower defaults on debt, the pledged collateral is usually taken.  It is not much different when it comes to nations as collateral is taken though it usually is through deceptive "re-packaging" of the debt through the IMF.  We are seeing the beginning of this phase in Greece today and it inevitably includes "austerity" measures that means that pensions, 401-Ks, entitlements, education and health care are rolled back.  National sovereignty erodes and taxes are added and increased.

During this phase, infrastructure (e.g. highways, water works, utilities) may be privatized in order to reduce the debt.  Next are more drastic measures, here are a couple of examples that we have already agreed to: 

  • Congressional Record, March 9, 1933 on HR 1491 p. 83.  "Under the new law the money is issued to the banks in return for government obligations, bills of exchange, drafts, notes, trade acceptances, and bankers acceptances. The money will be worth 100 cents on the dollar, because it is backed by the credit of the nation. It will represent a mortgage on all the homes, and other property of all the people of the nation."

Notice the key word "represent" in the above statement.  The statement "It will  represent a mortgage" is not binding and and has no direct legal ramifications.

What eactly is the pledged collateral?  Seems to me that our obligations are in dollars which don't have any real tangible value now that we are off any commodity standard. 

Once again you are compairing the US to an IMF bailout like Greece and Argentina.  If the IMF tried to bailout an economy of our size, don't you think even the common man would start asking questions about where the IMF gets that kind of money?  My guess is that it would only go to show that the emporor has no clothes and a mass uprising would quickly ensue.  I guess our corrupt politicians could try and sell us out to the IMF but I don't see why they would when our debt is denominated in dollars which we can control.  We won't even technically have to default if we choose to destroy our own currency instead.

I expect when the SHTF we will get exactly what you want.  That is non-debt based dollars printed to meet our obligations.  We will just get it later than you would like because we will be left with no other choice.  I fear the end results will be the same: deflation followed by inflation followed by hyperinflation followed by monetary collapse followed by ?????

I also don't know what to make of your "World Conservation Bank".  Seems a bit far fetched to me.

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Re: Painful look at the future of public debt

Kirby.  I respect your opinion, but did the bankers seize Russian land when they defaulted?  Would they seize Chinese land when they default?  The key is that these countries like us have military power.  Although the US military does what they're told, I don't think they would allow seizure of US lands, nor do I think they would fire on peaceful US citizens.  All ontracts may be broken by the governments that issue them.  Greece hopefully will follow Iceland's example and say: "we aren't giving you squat."

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DrKrbyLuv
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Re: Painful look at the future of public debt

docmims wrote:

I respect your opinion, but did the bankers seize Russian land when they defaulted? Would they seize Chinese land when they default? The key is that these countries like us have military power.

Thanks for the nice words, the respect is mutual.  My understanding is that Russia's crisis (1998 Ruble crisis) was actually a currency crisis.  I think the default came later, after repackaging.  The Russian default was not on their own bonds but on special bonds which were issued based on the restructured debt.  Ultimately, those who accepted the restructured bonds got their money and a nice profit within three years.  Defaults are not uncommon, for example the U.S. defaulted on their redemption obligations with France in 1971.

Technically, I don't think the U.S. ever needs to default on debt denominated in it's own currency as there is always the option of printing more money to repay the debt.  If our debt were denominated in another currency, like many nations, this would not be so easy.  Zimbabwe for example, created money to buy foreign currency to repay debt which led to abusive exchange rates.

Like the U.S. and Russia; China has the option of printing more money to avoid any default.  So the question that must be asked is why was there a Russian default and a much bigger U.S. default in 1933? 

Unlike the U.S., China still holds her financial sovereignty as they do not allow private banks to create money and they do not allow private banks to act as regulators or to control the amount of currency being created.  China owns and controls the Central Bank of China while the U.S. owns no part and has no control over the operation of the private Fed (the Federal Reserve by charter, is an independent organization).  It would seem that national defaults are more political than economic and by choice, not necessity. 

Such was the case with Russia...Yeltsin, like all of our recent presidents, was a traitor - a political puppet under the control of international bankers.  Under his regime, criminals took over Russia to bring in the New World Order which is code for global governance by international bankers and the end of the nation state.  At the time, Treasury officials, such as Larry Summers, played a major role in twisting the IMF's hand into giving Russia a significant loan even though the IMF did not think it was needed.

But why would American officials want to spend the U.S. taxpayers' money (the U.S. is by far the largest contributor to the IMF) to prop up another country; especially one which was considered an enemy of sorts?  The answer is that they were not doing it for the people of Russia or the U.S. - they were doing it to extend the might of the international banking cartel into Russia - at our expense.

The plan is to purposely sink the U.S. under debt and then to default.  Agreements already exist as I mentioned in my earlier post and I strongly suspect that there are other onerous agreements that are being kept secret.  For example, China instantly got $80 billion when Fannie and Freddie went down, before anyone else.

It is an historical fact that the Great Depression of the 1930's was purposely contrived.  There was no need to to take the private gold of the people.  There was no need for the depression to rage on for a decade.  And, there was no reason for the U.S. to default.  It was all by choice...and so it will be again.

docmims wrote:

Although the US military does what they're told, I don't think they would allow seizure of US lands, nor do I think they would fire on peaceful US citizens. All contracts may be broken by the governments that issue them.

I agree with the first part, the "US military does what they're told" which is why the military was taken over in the U.S.  Our leaders pretend that threats exist that warrant the loss of our freedoms and a military budget that exceeds 54% (2008) of our Federal outlays.  This huge military is not sized defend the people of the U.S., it is sized to fulfill two important missions.  First, it is the muscle for the international banking cartel to be used when and where needed.  Second, it is designed to keep the people in the U.S. subservient.  

Will they kill, if ordered, U.S. citizens?  My opinion is yes, they will kill as many as needed though there would be many who will choose to desertion.  Before ordered to do, you can bet there will be more false flag attacks - worse than 911.  The false flag attacks will be used in part to motivate the troops.

And, in Afghanistan, the U.S. "private army" of the future is emerging.  Earlier this year, a congressional report suggested that "Estimates of the total number of security contractors in Afghanistan, including those that are not licensed, are as high as 70,000."  These mercenaries do a lot of the dirty work as reported by the New York Times "Under the cover of a benign government information-gathering program, a Defense Department official set up a network of private contractors in Afghanistan and Pakistan to help track and kill suspected militants, according to military officials and businessmen in Afghanistan and the United States...hired contractors from private security companies that employed former C.I.A. and Special Forces operatives."  

We saw that Blackwater, ISI and the Mossad were used to "keep the peace" in New Orleans after Katrina.  You can bet these resources will be used as needed in the U.S. to kill as many as they see fit.

http://www.youtube.com/watch?v=TUzrV0lJ-0A 

Larry

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DrKrbyLuv
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Re: Painful look at the future of public debt

goes211 wrote:

Once again you are compairing the US to an IMF bailout like Greece and Argentina. If the IMF tried to bailout an economy of our size, don't you think even the common man would start asking questions about where the IMF gets that kind of money?

No, I don't think the "common man" will ask those questions.  I base this on the fact that the vast majority of common men do not ask or even wonder where money comes from now.  If they did, we would not have the private Federal Reserve running our once sovereign nation.  How many people realize that the national debt is a national fraud?

goes211 wrote:

I also don't know what to make of your "World Conservation Bank". Seems a bit far fetched to me.

Do your homework....you will be very surprised.

Larry

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