Loading ...Heed the Warnings …
Mike Savage, ChFC Financial Advisor
2642 Route 940 Pocono Summit, Pa 18346
I came across an article last night that explains well why I am so sure that we here in the US are on borrowed time economically just like our friends in Japan and across Europe. Many times I have said that our debt is an albatross much like we are seeing in Japan and Europe even though the prevailing sentiment is that the US is recovering.
Of course, all the major media outlets are trumpeting the “fact” that our deficits are being reduced and that good times are right around the corner. This has been the mantra for the last three years.
Let’s forget for a moment the reported numbers for inflation, unemployment, etc. and focus on a report by the US Treasury itself. I don’t believe this is a report that anyone wants to get out so it was released on Wednesday November 26, the afternoon right before our Thanksgiving holiday. I don’t believe any more than a mention would have taken place if it were a Monday morning anyway because this shows our true state of affairs and does not fit in with the recovery story at all.
I would not have found this out myself if I didn’t see it on David Stockman’s Contra Corner website. This was reported by Terrence P. Jeffrey at CNSNews.com:
“The US Treasury has been forced to issue $1,040,965,000,000.00 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government”.
Let that sink in. Even with $341 billion in revenues the Treasury was forced to conjur up over a trillion dollars in 8 weeks to pay current bills and retire maturing debt because there are no assets to pay it off.
Does this sound like we are being fiscally responsible or at best reckless?
You may be asking how I could say we have no assets to pay off our current spending and bills. I will refer to a Senate Financing committee testimony by Jack Lew, Treasury Secretary on October 10th. of 2013 which will explain it better than I could. “Every week we roll over approximately $100 billion in US bills”, Lew told the committee. “If US bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we could unexpectedly dissipate our entire cash balance.” “There is no other plan other than raising the debt limit that permits us to meet all of our obligations”, Lew said.
Let THAT sink in. It is my opinion that we have no hope other than going deeper and deeper into debt which has gotten us to where we are today.
We are now “printing” money to pay current bills and retire maturing debt at a clip that, if it stays the same for a year, would equal over $6 Trillion dollars!
The “deficit is decreasing” line appears to me to be a mirage and is meant to get people to feel better but it is worse than an illusion because an illusion is meant to amuse while this is meant to deceive.
Many people are going about their business and making decisions based upon the belief that a recovery is right around the corner and that we are out of the woods economically. This information, in my opinion, makes a strong statement that the truth is the crisis of 2008 is not over- just postponed to a later date and those that fail to take action soon may find themselves unable to protect themselves when the reality of this situation presents itself.
What are governments doing? Many are asking for gold that is being held in foreign countries to be brought home. (Denmark, Germany, France, Venezuela to name a few.) Many, like Marine LePen, opposition leader in France, are asking for audits on the French gold to make sure it actually exists as it is being reported.
Russia, China, India and many other Asian and Arab nations are buying as much gold as they can get their hands on. (King World News many reports including Stephen Leeb 8-26-2014)
I recently read a report by Jim Rickards that included statements by the International Center for Monetary and Banking Studies, ICMB in its annual “Geneva Report” said:
“Contrary to widely held beliefs, six years on from the beginning of the financial crisis… the global economy is not yet on a deleveraging path. Indeed, the ratio of global total debt…over GDP has kept increasing …and breaking new highs.” “The report then goes on to warn about the “poisonous” impact of that debt today.” –Rickards
More from Rickards … “The message is impossible to ignore. The world’s most powerful financial institutions and think tanks, the BIS, G-20, ICMB, IMF and the Fed are all warning about excessive leverage, asset bubbles, slow growth and systemic risk.” “Are the global elites trying to tell you something? Actually, no. All of these reports and press releases noted above are written in highly technical language and were read only by a relatively small number of expert analysts.” “The power elite were not signaling you- they were signaling each other”.
Quote from the BIS – “Time and again … seemingly strong balance sheets have turned out to mask unsuspected vulnerabilities”.
Quote from the G20 – “We are mindful of the potential for a buildup of excessive risk in the financial markets, particularly in an environment of low interest rates and low asset price volatility.”
Quote from the IMF – “Downside risks arise from … increased risk taking amidst low volatility in financial markets and heightened geopolitical tensions.”
“These elite warnings serve another purpose in addition to giving fellow elites a heads-up. They insulate politicians and officials from blame after the crash. When the collapse comes, you can be sure that the BIS, G20, IMF and the rest will point to the statements I just told you about and say “See, we told you it was coming. Don’t blame us if you didn’t take action.”
Anyone wondering about Rickards qualifications – the CIA called him in to do a “financial war game” simulation and he was called to help resolve the LTCM (Long Term Capital Management) debacle that almost brought down the financial system in the late 1990s.
There is plenty of evidence that now is not the time for complacency but it is time to be ready for anything… Be Prepared!