Why U.S. debt matters to you


Hyperflation In The United States
posted by Blogger at Marc Faber Blog - 45 minutes ago
“I am 100 percent sure that the United States will go into hyperinflation. The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they ...




There Will Be Inflation.
posted by Blogger at Jim Rogers Blog - 51 minutes ago
Well, there will be inflation. First, you have to have inflation before you can have hyperinflation. I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance ...

Jim Sinclair’s Commentary
A crisis anywhere is a crisis everywhere in this Global economy. Wherever a financial problem occurs gold finds willing and eager buyers. This is why the hedgies and the dirty tricksters will not take the day this time.
Nothing has been fixed. All that has happened in the West is "Extend and Pretend" with the money bunnies of F-TV acting as the great pretenders.
Kicking the can of problems down the road has finally run into a dead end. OTC derivatives continue to grow as they destroy all things financial in their unholy demonic path.
The West’s financial system is broken. Like Humpty Dumpty, all the kings men cannot put it back together again, nor do they really seem to care.
The answer to the last question is "QE to Infinity" as it requires NO economic foundation to create money out of thin air.

Three Signs That Europe’s Enormous Bailout Has Already Failed Vincent Fernando, CFA Jun. 2, 2010, 9:22 AM
An enormous show of strength from both the Eurozone and IMF may have stemmed the previous Eurozone credit rout, but it seems that its effects are fading.
1) Yesterday credit default swap spreads exploded higher for Europe’s periphery ‘PIIGS’ economies, approaching the dangerous record highs pre-Eurozone bailout.
Those spreads continued to expand today, reflecting even higher default risk.

2) Moreover, the Wall Street Journal reports today that ECB overnight deposits have hit a record high. Usually banks just park a few hundred million euros with the Central Bank using this facility, since they get subpar interest on their capital. They have now chosen to place 316.4 billion euros in ECB deposits, as perceived counterparty risk (the risk between banks) is soaring.
3) The euro is now breaking below $1.22.

More…

Jim Sinclair’s Commentary
The predatory beast of the OTC weapon of mass financial destruction, the CDS, is now consuming its next meal.
One by one the fiat currency system is unraveling while others are making trillions in the process.
Gold is the ONLY answer. If you do not own it you perish. If you trade it odds suggest you will not be fully positioned on payday.

Sovereign Credit-Default Swaps Surge on Hungarian Debt Crisis By Kate Haywood
June 4 (Bloomberg) — Credit-default swaps on sovereign bonds surged to a record on speculation Europe’s debt crisis is worsening after Hungary said it’s in a “very grave situation” because a previous government lied about the economy.
The cost of insuring against losses on Hungarian sovereign debt rose 63 basis points to 371, according to CMA DataVision at 3:30 p.m. in London, after earlier reaching 416 basis points. Swaps on France, Austria, Belgium and Germany also rose, sending the Markit iTraxx SovX Western Europe Index of contracts on 15 governments as high as a record 174.4 basis points.
Hungary’s bonds fell after a spokesman for Prime Minister Viktor Orban said talk of a default is “not an exaggeration” because a previous administration “manipulated” figures. The country was bailed out with a 20 billion-euro ($24 billion) aid package from the European Union and International Monetary Fund in 2008.
“The comments out of Hungary have really spooked the market,” said Rajeev Shah, a credit strategist at BNP Paribas SA in London. “Investors are interpreting it as bad sign for trying to tackle Europe’s debt crisis.”
The euro dropped below $1.21 for the first time since April 2006, stocks tumbled and the cost of insuring against corporate default rose on speculation Hungary will weaken the EU’s willingness to rescue the region’s indebted nations.
Credit markets were also roiled after data showed U.S. employers hired fewer workers in May than forecast, signaling slowing economic growth.
More…

Jim Sinclair’s Commentary
Up until now the friends of power have been buying the broken banks with major guarantees from the FDIC. It is a risk-less deal because the guarantee is so high.
Either this entity is a roaring disaster without salvageable value or the game of getting the inside gang richer is over for some reason.

FDIC Finds No Buyer For Failed Arcola Homestead Savings of Illinois By Bill Zielinski on June 4th, 2010
June 4, 2010 – Arcola Homestead Savings Bank, Arcola, IL became the 80th banking failure of 2010 after the bank was closed by the Illinois Department of Financial Professional Regulation. Illinois has now had 12 banking failures this year, trailing only Florida with 13 banking failures.
The FDIC, appointed as receiver for the failed bank, could find no willing buyer for the bank. Accordingly, depositors will be paid off with checks from the FDIC that will be mailed on Monday. When the FDIC is unable to find a buyer for a failed bank, depositors with funds in excess of FDIC insurance limits face the potential loss of all funds in excess of insured deposit limits. Future recoveries of depositor losses will depend on the amount of proceeds from the final disposition of the bank’s assets. In the case of Arcola Homestead, the FDIC said that there did not appear to be any uninsured funds.
Another potential nightmare for depositors of Arcola Savings arises from the fact that customers will have no access to their funds until they receive FDIC payout checks which will be mailed on Monday. When a bank fails and is purchased by another institution, it is generally a nonevent for most customers. The biggest thing that customers of purchased failed banks will notice is that the name of their bank will change when it reopens on Monday. In the case of Arcola Homestead, the FDIC could find no buyer, and the banking operations of Arcola were terminated. The closing of Arcola was classified as a “payout” and depositors have no access to their funds until they receive their payout check from the FDIC.
Arcola Homestead was a very small bank with only $17 million in total assets and $18.1 million in total deposits. The FDIC estimates that the cost of closing Arcola Savings will amount to $3.2 million. Arcola is the 80th banking failure of 2010 and the 12th banking failure in Illinois this year.
Customers of Arcola Homestead Savings Bank who may have questions about the bank’s failure can contact the FDIC toll free at 1-800-238-8209.
More…

Euro Zone Faces Zero Growth, US Facing Trouble: Roubini
"Greece was just the tip of the iceberg...And the Americans too will run into the wall at some point if the carry on the way they are," he said in the interview published in German.

















What is money?





To quote Murray Rothbard:
"...Money is a commodity. Learning this simple lesson is one of the world's most important tasks. So often have people talked about money as something much more or less than this. Money is not an abstract unit of account, divorceable from a concrete good; it is not a useless token only good for exchanging; it is not a "claim on society"; it is not a guarantee of a fixed price level. It is simply a commodity. It differs from other commodities in being demanded mainly as a medium of exchange. But aside from this, it is a commodity--and, like all commodities, it has an existing stock, it faces demands by people to buy and hold it, etc. Like all commodities, its "price"--in terms of other goods--is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. (People "buy" money by selling their goods and services for it, just as they "sell" money when they buy goods and services.)"

















Another Worry: What Happens When Stimulus Ends? The stimulus CANNOT END or the game will be over...The ONLY way stimulus can end, is when jobs and manufacturing starts producing things the rest of the world wants to buy...





FACT...The stimulus CANNOT STOP or the house of cards implodes...





FACT...33 States are BANKRUPT.FACT...1,141 TRILLION DOLLARS worth of DERIVATIVES need to be unwound...(impossible)they are ticking time bombs...designed to destroy ALL currencies and ALL countries...





FACT... The U.S.A. is NOT repeat NOT IMMUNED...





FACT... WE ARE FREAKING DOOMED...Prepare and start reading about Weimar Germany and Zimbabwe HYPERINFLATION...





FACT...You are warned...





That is all...

















depressionary box

















For Some Homeowners in Foreclosure, a Rent-Free Approach. Trent's comment: "This attitude is astonishing and disappointing. The attitude that 'the banks are crooks', and thus its okay to behave similarly is frightening."

















Federal debt tops $13 trillion mark. (And that doesn't include the massive future obligations like government pensions)

















Why a 'new euro' could be the saviour of the European dream.

















This story is the Chinese giving obama the finger...





The Chinese will do what the Chinese want to do and when the Chinese want to do it...Period






China ready to say goodbye to dollar
Sun, 07 Mar 2010 10:09:55 GMT
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Zhou Xiaochuan, governor of the People's Bank of China
The head of China's Central Bank has declared that the country is ready to end pegging its currency in dollars, but said that any changes would be gradual. Zhou Xiaochuan, governor of the People's Bank of China, described the decision as a "temporary" response to the global financial crisis, but gave no timescale for any change in policy. "If we are to exit from irregular policies and return to ordinary economic policies, we must be extremely prudent about our choice of timing," Zhou said. "This also includes the [yuan] exchange rate policy." His comments come as the US administration accuses China of artificially keeping the value of the country's yuan low. "China and its currency policies are impeding the rebalancing [of the global economy] that's necessary," President Obama had told Bloomberg last month. "My goal over the course of the next year is for China to recognize that it is also in their interest to allow their currency to appreciate because, frankly, they have got a potentially overheating economy," Obama said.

















Iran to Dump 45 Billion Euros for Gold Bullion and Dollars

















Chronic Joblessness Bites Deep