Fiscal cliff this and fiscal cliff that. Mathematically it is game over. Tax the rich, cut benefits to the needy; it doesn’t matter because the debt itself is un-payable not to mention the interest. Let’s assume that the Congress does “cut a deal,” it will buy some time only (maybe very little) and cannot avoid the final resolution. The final resolution being default, whether it be non payment or devaluing the currency it will still be a default where someone somewhere (many everywhere) loses “value” and does not get paid.
Whether a “deal” gets done before Jan. 1 is a moot point because whatever is actually done will do nothing. As a side note, I find it revolting (typical) that Congress plans to adjourn before the first of the year and President Obama plans a 3 week Hawaiian vacation whether or not a deal is struck. I am not saying that the current bankruptcy is this President’s or Congress’s sole fault; it is not (but they did help put the cherry on top). What I am saying is that it is THEIR job to at least TRY to find a solution. That is what “the people” entrusted in them when they voted for them. In my opinion, the president and Congress should lock themselves in a room (viewable with full audio on C-SPAN) and come up with something…anything… because that is their job and they do get paid taxpayer money for their “work.”
That said, if I were “king,” I would have a different solution with much less drama leading up to Jan. 1. I would tell the public (I try through my writings) that “game over” has arrived and the “reset” button needs to be pushed. I would tell the whole country, “Let’s everyone hold hands and jump off the fiscal cliff together singing Kumbayah!” We have been kicking the can into the wall at the end of a dead end street for years, no matter how hard you keep kicking the “can” it can go no further and do no good. It is time to “fess” up and admit failure (if not fraud).
Follow this through, actually “going over the cliff” is THE only way to balance the budget, REALLY and TRULY balance the budget. If the federal government doesn’t have the revenue… they can’t spend it can they? Add to this a NO vote on raising the (unlimited) debt ceiling and presto, we have to live within our means! Yes I know, the financial world will come to an end as will our standard of living. The economy will contract AT LEAST 8% (which is the amount of current deficit spending) plus the ripple effects from this “stimulus withdrawal.” The economy very well may contract 50% or more initially when things grind to a halt and possibly level out at a level 25-35% lower than where it (falsely) is now. At least it will then be “real.” “Paper pushers” will need to get real jobs and the economy will morph its way back to one of actual production rather than being one of paper speculating.
Virtually ALL financial institutions will be bankrupted. This is simple logic, if the government is bankrupted… that means the currency is worthless (because it is full faith and credit fiat)… which means all savings and paper collateral are worthless. As I have said before, “everything is worth nothing” and no matter how hard you kick the can or fraudulently shroud this fact, it is nevertheless FACT. The only missing piece to this becoming “known and understood” is perception. People today know in their gut that something is really REALLY wrong but just keep going forward because they know nothing else to do. They don’t want to admit to themselves (because it is just too horrifying) the reality of the situation. “This” can never happen in the U.S. because it never “has” and…”this is the U.S.”
One way or the other, this exact scenario WILL happen, it has to per the laws of Mother Nature. The U.S. is not immune to the laws of Mother Nature any more than any other individual, state, province, country or previous empire. So, as I said earlier, let’s JUMP off the fiscal cliff together and let EVERYTHING come down in a smoldering heap. We should have done this 10-20 years ago and the actual economic hardship would have been far less but we didn’t. No, instead we decided to “blow the bubble” higher and higher through the use $ trillions upon $ trillions (eventually over $1 quadrillion) of derivatives. These derivatives were employed time and again to HIDE reality by rigging markets. The realities of what free markets would have exposed. Now, everything everywhere has already been “hocked” and the ability to “lever up” further is no longer available. The inability to lever up further is exactly what each kick of the can was made of, because of the current inability to lever further we may miss the can entirely with the next kick. It’s time to go over the cliff with our eyes wide open! When it comes to “austerity”, sooner is always better than later, unfortunately, the current time frame is definitely later… much too much “later”.
Print currency, not borrowed, just printed , send it out to everyone like you said yesterday. but require it be used first to pay pay off any outstanding debts….eventually back this new unborrowed currency with gold and silver….Result: sound money and in effect a debt jubilee…..inflationary,yes, but better than alternative don’t you think?
Yes, the reset will require several “zeroes”.
So global rush to PM as currency devalues.
People will never own a PM in their lifetime if they don’t have it before the crash, but the whole point of this is to make you so poor you will have to spend it to survive.
If you make it through, you will need about 80-90 ounces of silver to be rich?
Question is, with the balance sheets of everything rushin into safety, wouldn’t all of that money need to be “destroyed” so it doesn’t make its way into PM’s?
How would they destroy it? And after it is destroyed people will still be making an income and investing that currency into PHYZZ.
Does everything go to 0?(paper)Do they just Bernie it all and say eveything is gone and we dont know where it went?
Imagine govt’s, banks, pension funds, ETF’s, savings accounts, just about anything 0.5% of all that money into physical silver. India China Russia, just keeping up with their current imports this can not last more than 3 years which is frightning.
That amoount of currency is rediculous.
Jim Willie on 250$ silver is laughable, in todays purchasing power. 6,000$ gold, no way. everything would have to be devalued by about 80%.
WAY TOO LOW
There will be no reserve Chinese gold backed currency, gold will be the new currency and every country will “peg” to it accordingly.
The only thing is a wild card, is that silver can also been seen as an investment also. gold –> money.
So purchasing power in todays dollar for gold /silver, make up a number because you could justify anything.
Im calling a ratio 2:1 silver to gold.
I am not in the “it will keep its purchasing power” camp.
How can gold and silver go to these heights and still buy the same number of goods and sevice? explain that!
I can buy 10 loaves of bread at todays prices with 1 ounce of silver and then a rush to PM the prices will keep up with PM, i don’t think so. This will be multiplying your wealth effect.
Silver is not money today, it is in an investment, very different than gold.
plz respond, i think your awseome, if i have any holes with my analysis please fix it. i would much appreciate your thoughts.
plz get some sgt reports again. rally the troops!
2-1 Silver to Gold ratio…maybe. PM’s should actually gain in purchasing power when “reset” in my opinion. I do not believe putting any number on Silver or Gold is possible today and believe that they will both trade far higher than ANY numbers that you have already seen published so far.
thanks for the reply
see you on the othe side
2:1 its a dream anyways.
count to down July 15, 2015
2 to 1 sounds like a giant leap now…it very well could happen under certain circumstances. Especially if the medical usages were to kick in. I think 10 to 1 will surely become reality.