by David Pierre
First off, this amount is basically a “ham sandwich” compared to what the real problem is.
This $1.5 Trillion is over 10 YEARS so it amounts to a mere $120-150 Billion per year.
To put this in perspective, we have already spent an additional $600 Billion+ in just over 3 months since the debt deal so the concept really is laughable. What is even more laughable will be when they they deadlock and cannot come up with any cuts!
Assuming that they do actually come up with a plan,… What will “normalized” interest rates do to these plans?
If interest rates were to rise to the lofty levels of say just 5%, how much is that on $20 Trillion (where we will be in less than 3 years) worth of debt? The calculator says…$1 Trillion per year…EVERY YEAR in interest alone! Heck, 5% on an additional $5 Trillion is $250 Billion which dwarfs these proposed fantasy cuts by this super committee.
The immediate problem is that this fiscal wrangling will bring the U.S. back into the financial spotlight, something they can ill afford.
Better to point fingers at European deadbeats so the world is distracted fom looking under our hood where the real problem is!
Complacency abounds everywhere … face the fact of a 100% mathematically assured financial collapse that ends with new currencies being issued.
It is only a matter of time and “how many zero’s” are added to Gold and Silver’s prices when the current currencies go the way of the Dodo bird.
How anyone can miss this as it could not be more obvious. Governments far and wide including… especially the U.S. have debt levels (denominated in already fake and worthless pieces of paper) that are unsustainable and cannot be paid back even with interest rates at zero. Factor in “real” interest rates that are not negative and the top blows off this baby!
Were the U.S. to back just it’s debt held by foreigners, Gold would need to be priced at nearly $20,000 per ounce. If it were priced to back the admitted and “on the books debt”, that number is over $60,000, expand it to cover the “off books debt and obligations” and you arrive a tover $400,000 per ounce.
Of course this assumes that we have the Gold that we say we do, …likely or unlikely?
Today’s bond buyers are “investing” in entities that cannot be paid back in even the current worthless currencies. They will be paid back in EVEN MORE worthless, if that’s possible, paper!
It makes no sense. It is this very core belief, namely that “government bonds are the height of safety” that will be the undoing of the whole system.
The “lunatics”… those who believe in hard and real currency… will finally get to run the asylum in a fair and just manner where “settlement” is actually real and accomplished for trade and payment of wages and debts!