U.S great 2009-2010 depression is more likely now

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As U.S has less power to borrow money, struggling to pay for the interest, more layoffs keep coming from every corner of U.S, more seller&less buyer in the housing market, more ineffective economic bailouts and a collapsing banking system, Great depression II looks more obvious going to happen than it was in 2008.

In earlier posts: A Great 2008-2009 Depression, 2008-2009 depression is worse than 1929, we can’t create demand like what we did in WWII., and U.S 1929 Great Depression vs. 2008 financial, housing, credit crisis, I’ve stated something about coming depression and some comparisons between this one vs 1929. Now I want to elaborate more about current situation with new sources.

Now we have 1/2 a trillion interest. That is about 4% just for interest. We don’t grow our economy 4% even in good times so how do we ever get ahead. AND, if you use real inflation, we not only didn’t grow GDP 4% but have been negative for 8 years now, except for only one quarter out of the whole 8 years.

The Gov. Accounting Office and others have warned Congress for years, we had placed ourselves on an unsustainable course and face the loss of our standard of living. The Congress heard testimony we can’t grow or tax out of this.

So, why are we doing this? Because we are in denial in Congress and among the voters. I hear it daily. “We always find a way.” or “We are too big to fail.” or “The world can’t get along without us.” “They won’t let the dollar collapse.” “They have to do something.”

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a
million is able to diagnose.”
– John Maynard Keynes
(1883-1946) British economist
Source: “The Economic Consequences Of The Peace”
http://quotes.liberty-tree.ca/quote_blog/John.Maynard.Keynes.Quote.B248

“(The Great Depression resulting from the Stock Market crash) was not accidental. It was a carefully contrived occurrence….The international bankers sought to bring about a condition of despair here so they might emerge as rulers of us all.”
– Louis McFadden
(1876-1936) US Congressman (R-PA) (1915-1935), Chairman of House Banking and Currency Committee. Poisoned in 1936.

Source: testified in Congress (1933).

There were at least two attempts on his life by gunfire. He died of suspected poisoning after attending a banquet.

http://quotes.liberty-tree.ca/quote_blog/Louis.McFadden.Quote.B24D

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So, we have a President that either unknowingly or knowingly has appointed the very people that got us into this mess. For 95 years we have had people just like he has appointed, in both parties leading us to this point and his solution is to appoint more of them. They are from the CFR, Trilateral Commission and Bilderbergs which are all creations of the Central Bankers.

He has appointed people who are going to use more debt to solve a problem created by too much debt by people, cities, states, and corporations by doubling the national debt even faster than Bush doubled it.

quote:
But who is going to keep funding this expansion of Treasury debt issuance? The American public is broke and cannot offer its capital in return for terrible yields. Foreign nations don’t have the means or will to continue financing our debt. Commodity prices have collapsed, cutting deeply into foreigners’ export revenues. Oil is down from highs around $150/barrel this past summer to around $40/barrel now.
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In 1971 when Kissinger, Cheney and Schultz got OPEC to sell oil in dollars to save the dollar from collapse, the agreement included loaning the excess profits back to the U.S. With oil down and those nations addicted to oil revenue for social spending in their own nations, they don’t have “excess” to lend us, nor due the nations whose export revenues have dried up.

Then you have Geithner making statements to anger the Chinese who have lent us so much? Yes, I would say the President has started running in the wrong direction in this race and he knows it, we know it, the economists around the world know it, so why is he doing it?

$825 billion economic stimulus package.

“This week the House is expected to pass an $825 billion economic stimulus package. In reality, this bill is just an escalation of a government-created economic mess. As before, a sense of urgency and impending doom is being used to extract mountains of oney from Congress with minimal debate. So much for change. This is déjà vu. We are again being promised that its passage will help employment, help homeowners, help the environment, etc. These promises are worthless. This time around especially, Congress should know better than to pass anything of this magnitude without first reading the fine print. There a many red flags that I have found in this bill.

At least $4 billion is allocated to expanding the police state and the war on drugs through Byrne grants, which even the Bush administration opposed, and the COPS program, both of which are corrupt and largely ineffective programs.

To help Big Brother keep a better eye on us and our children, $20 billion would go towards health information technology, which would create a national system of electronic medical records without adequate privacy protection. These records would instead be subject to the misnamed federal “medical privacy” rule, which allows government and state-favored special interests to see medical records at will. An additional $250 million is allocated for states to nationalize individual student data, expanding federal control of education and eroding privacy.

$79 billion bails out states that haphazardly expanded their budgets during the bubble years, but refuse to retrench and cut back, as their taxpayers have had to, during recession years.

$200 million expands Americorps. $100 million goes to “faith-and-community” based organizations for social services, which will further insinuate the government into charity and community service. Private charities are much more efficient and effective because they are directly accountable to donors, while public programs tend to get rewarded for failure. With its money, the Federal Government brings its incompetence and its whims, while creating foolish dependence. This is sad to see.

Of course the bill is rife with central planning projects. $4 billion for job training, much of which will be used to direct workers into “green jobs”. $200 million to “encourage” electric cars, $2 billion to support US manufacturers of advanced batteries and battery systems, which is yet another function of government I can’t find in the Constitution. Not to mention $500 million for energy efficient manufacturing demonstration projects, $70 million for a Technology Innovation Program for “research in potentially revolutionary technologies” in which government, not supply and demand, will pick winners and losers. $746 million for afterschool snacks, $6.75 billion for the Department of Commerce, including $1 billion for a census.

This bill delivers an additional debt burden of $6,700 to every American man, woman and child.

California is just the first state to prepare stop paying bills.

CALIFORNIA IS LEADING THE WAY with a revolution in monetary policy.

“California prepares to stop paying bills” By Drew Zahn

“The state of California has run out of money.

Facing a $42 billion budget deficit, State Controller John Chiang told the Sacramento Bee he has already borrowed $21.5 billion to try to cover the state’s checks, but by Feb. 1, there will be no more options left but to simply stop paying some of the bills – including tax refunds, welfare checks, student grants and other payments owned to California citizens.

“It pains me to pull this trigger,” Chiang said at a news conference held in his office. “But it is an action that is critically necessary.”

Federal law requires that many school and healthcare programs – a total of about $6.6 billion in California – must be paid, the Los Angeles Times reports, so Chiang has announced an expected payment freeze on $3.7 billion worth of the state’s bills, most of it refunds owed to taxpayers.

But even with the freeze beginning next week, the Times reports, California will still fall $346 million short for the month of February, forcing Chiang to consider something only done once since the Great Depression: issuing IOUs.

US Treasuries no longer attractive

US Treasuries are in difficulty as Mondays sale didn’t go as well as expected and the absolutely large amount of US debt has only just been started to be offloaded on to the market:

http://uk.biz.yahoo.com/27012009/323/treasuries-short-end-underperforms-auction-eyed.html

Treasuries fall again as US starts trying to sell huge amount of debt. Reaction to the first day of debt sales is “It was a little sloppy,” Jamie Jackson, who oversees government debt trading at RiverSource Investments in Minneapolis, said of the auction. The firm manages $90 billion of bonds. “People were of the mind that this was going to be a raving success. Expectations were a little too high.”
http://www.bloomberg.com/apps/news?pid=20601103&sid=aZumxWK9Pmm4&refer=news

“Government securities tumbled 2.2 percent in January, heading for their biggest monthly loss in almost five years, according to Merrill Lynch & Co.’s U.S. Treasury Master index”
http://www.bloomberg.com/apps/news?pid=20601103&sid=aP2flP7_pJfc&refer=news

Denninger website sums this up well
http://market-ticker.denninger.net/archives/747-Bernanke-Game-Over.html

The Madoff Economy

The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.

Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?

Federal Reserve is unable to absorb the losses:

The estimated losses in America resulting from the off-the-book derivative fiasco is being estimated from 40 to 75 trillion dollars here in the US, world-wide is at 400+ trillion. No real asset base underlies those numbers since they were derived from the Wall Street suits imagination. There will be no unwinding of those financial instruments, because most of the suits know that there is nothing there. The entire world of financial suits are trembling in fear of a disastrous popping of that world-wide bubble. Will the Federal Reserve want to absorb those losses? Can the government? Can any government?

Future: the coming new currency, Amero

That evaporation of loss will occur when the ratio of the existing currencies will be set to the new currency. 1,000 to one, 10,000 to one, whatever is required to allow the suits to retain their money/power so they can set up the next “bubble”.
Related posts about Amero: U.S. Ships 800 Billion “AMEROS” to China; prepares to De-Monetize U.S. Dollar, I HAVE OBTAINED AN ACTUAL “AMERO” FROM THE SHIPMENT SENT TO CHINA, and “AMEROS” Hasn’t Officially Announced YET But It’s Coming

Although another great depression is likely to happen, but I still wish U.S the best and expect a quick recovery for the economy. If you have any good idea to rescue the economy, your welcome to speak up here.

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Related Posts:

• The great depression and this crisis have to be viewed from the perspective of the run up to the crisis.
• How about no recovery for a decade?
• China’s nowadays is similar to the 1920’s and 1930’s.
• 15% of all mortgages currently in default or foreclosure (CNN Money).
• As long as you have stops to protect from a big drop and you got in early, you should be ok.

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