There are those of us Americans who think that the USA is fine. It’s gliding along like a figure skater. Nice & smooth. Well, a figure skater post lobotomy – as they don’t seem to analyze anything. They’re spoon fed the 10 second news bits, and they digest the tiny morsels … perhaps because it’s easy to do. They don’t know how many states there are, where England is (or that it’s an island), and they are proud of themselves. Life just passes by happily.
Then there are those of us Americans who are worried by what’s happening in our country. This group of Americans may know that England is an island … or perhaps know where to put the equator, or may even be able to place twenty countries geographically on a globe. While they may analyze the errant data points that come across their television screen … they steadfastly refuse to analyze the information which may be in their brains… sort of like these goats.
I’d say that I find myself having left the second group. I’ve come to the opinion that I’m finding myself in a third group. A group that has started looking at owning gold over US Dollars. A group that I previously thought filled with a bunch of nut cases (Ruby Ridge, Wacko Texas, bomb shelters with food – or specialty insulated sheds with food & weaponry, etc).
While I don’t have the weaponry – nor the desire for such – I’m not so sure that this emerging third group is so far off. Far off balance that is.
I love politics.
Yeah … that’s true.
And maybe you do too.
Well, as strange as his name may be, there is an excellent article written by Fareed Zakaria posted here at ForeignAffairs.org. I’ve also PDFd it – just in case it gets taken down … the PDF’d version (maybe easier to read? is here).
Here’s the official summary of his article:
Summary: Despite some eerie parallels between the position of the United States today and that of the British Empire a century ago, there are key differences. Britain’s decline was driven by bad economics. The United States, in contrast, has the strength and dynamism to continue shaping the world — but only if it can overcome its political dysfunction and reorient U.S. policy for a world defined by the rise of other powers.
FAREED ZAKARIA is Editor of Newsweek International. This essay is adapted from his book The Post-American World (W. W. Norton and Company, Inc., © 2008 by Fareed Zakaria).
My Toilet Is Blocked Up
So why do I think that there’s going to be a sudden suction sound hitting?
Well, frankly speaking … we don’t have the right people running for office. As Thomas L. Friedman says in his Opinion piece here
America yearns for leader who will speak hard truths
While there were politicians who could say:
- We need to re-invest in America
- We need to have a SURPLUS – not a $9 trillion deficit
- We need to worry more about the physical as well as mental health of our country
- We need to look in the mirror – and acknowledge our needs (which are much more than worrying about the sheep in the USA …
My opinion is that we’re certainly painting ourselves into a very ugly corner.
Some questions for you to think about…
FIRST: Did you realize that the US National Debt is currently:
SECOND: What is the ratio of US Public debt to US GDP?
It is in excess of 60%.
It’s my opinion that this interesting, and pertinent (and you can see a few educational and non-biased webpages on this at wikipedia.com (which you may or may not know is a website that ANYONE can update/edit then) here. But here is a link (click on the image for more info) and the image:
THIRD: What’s the problem with owing Trillions of dollars?
The problem is that the Net interest on the U.S. national debt was approximately $240 billion in fiscal years 2007 and 2008. This represented approximately 9.5% of government receipts. Interest was the fourth largest single disbursement category, after defense, Social Security, and Medicare.
$240 billion dollars in interest. Paid each year. Paid to other individuals, companies, and countries.
Here’s the link to the paper that The Federal Reserve Bank of St Louis published entitled “Is the United States Bankrupt?”
Here’s the summary:
Is the United States bankrupt? Many would scoff at this notion. Others would argue that financial implosion is just around the corner. This paper explores these views from both partial and general equilibrium perspectives. It concludes that countries can go broke, that the United States is going broke, that remaining open to foreign investment can help stave off bankruptcy, but that radical
reform of U.S. fiscal institutions is essential to secure the nation’s economic future. The paper offers three policies to eliminate the nation’s enormous fiscal gap and avert bankruptcy: a retail sales tax, personalized Social Security, and a globally budgeted universal healthcare system.
Federal Reserve Bank of St. Louis Review, July/August 2006, 88(4), pp. 235-49
FOURTH: But the US Dollar is so strong.
First of all, the U.S. government uses fiat money – which means that the US government is free to print all the money it wants. And while the government cannot technically go bankrupt, its currency can DIVE in value due to currency traders ‘not wanting it.’
FIFTH: What in the world could suddenly happen that could have an impact on the Dollar?
First of all, as OPEC uses the US Dollar to price oil… every time there is a terrorist attack on any thing related to the world wide oil distribution network (from oil rig, oil tanker, all the way to the gas station) then you get something like this:
Mideast Attack Causes Oil Price Spike
By Pablo Gorondi
Associated Press Writer
April 21, 2008
CBNNews.com – Oil prices spiked to a record above $117 a barrel on Monday after a Japanese oil tanker was attacked off the east coast of Yemen
The above is from this page.
Terrorists Attack Oil Tankers And We Could Go Into A Second Depression?
So, everytime terrorists attack an oil tanker, the US dollar’s value falls in worth. So those selling the oil get paid in a currency that’s value is in decline. This is why in November 2007 national headlines were like this:
Will OPEC Dump the Dollar?
The fall of the U.S. dollar—and the domestic unhappiness this creates—is causing oil-producing nations to reassess links to the greenback
You can read the story here as published in Business Week
Second of all, ask yourself if YOU would invest in a country where there is ever increasing debt? Yes, initially, receiving large payments (totaling in excess of 240 billion US dollars in interest) would look cool. But what do you do as the debt continues to balloon? You’d downgrade the credit. Then you’d continue to downgrade the credit – wanting higher interest … and you’d SLOW down your desire to lend money to the out of control borrower.
Eventually, you’d stop lending money… and when your BONDS came due, you’d take your money back – meaning the borrower would actually have to PAY principal out. Paying BILLIONS is easier than paying TRILLIONS.
SIXTH: Dumping US Treasury Bonds?
The US debt in the hands of foreign governments is 25% of the total, virtually double the 1988 figure of 13%. Despite the declining willingness of foreign investors to continue investing in dollar denominated instruments as the US Dollar has fallen in 2007, the U.S. Treasury statistics indicate that, at the end of 2006, foreigners held 44% of federal debt held by the public. About 66% of that 44% was held by the central banks of other countries, in particular the central banks of Japan and China. In total, lenders from Japan and China held 47% of the foreign-owned debt.This exposes the United States to potential financial or political risk that either banks will stop buying Treasury securities or start selling them heavily. In fact, the debt held by Japan reached a maximum in August of 2004 and has fallen nearly 3% since then.
In 2006, the central banks of Italy, Russia, Sweden, and the United Arab Emirates announced they would reduce their dollar holdings slightly, with Sweden moving from a 90% dollar-based foreign reserve to 85%. On May 20, 2007, Kuwait discontinued pegging its currency exclusively to the dollar, preferring to use the dollar in a basket of currencies. Syria made a similar announcement on June 4, 2007.
Read more about the preceding here.
It is rumored that China has recently started re-evaluating its US dollar holdings.
Why investors fear a China Treasury dump
One of the big questions now being debated is, “What would happen if China were to dump its entire Treasury portfolio in one fell swoop?” Caroline Baum addressed that question in “China Doesn’t Steer the U.S. Interest-Rate Ship”:
“Like a highly contagious virus, fear that foreigners will dump all their U.S. Treasury securities spreads through the market at periodic intervals.
“The fear is not totally unfounded.
Wacko Lunatic Conspiracists Thinking About World Domination
Then there are the people like Alex Jones … people who think that there are those that ‘run’ our government along with all the other governments of the world.
I’d say, if you’ve made it this far, before you dismiss the rest of this as complete lunacy … just press play … and instantly fast forward to minute 34:00 of the movie and just watch it for five minutes. It’s the best place to start if you’ve only got a few minutes … in the video are so many of the heavy weight politicians as well as many other ‘captains of industry’
Interesting is the point at 35:15… 38:00
Here’s the wiki The Bilderberg Group (aka Bilderburgh Group)
The movie is entitled Endgame and it’s about the take over of the world … a movie by Alex Jones … it’s an interesting movie to watch. It is full of quotes and video clips of history … and Mr Jones certainly has his ideas.
Personally, his tone is scary – but the video is compelling.
The following quote comes from Amazon.com regarding the movie Endgame.
In typical Alex Jones fashion, this film provides an eye-opening account of a shocking aspect of history. End Game is very thought-provoking and presents an ideas that could impact most of the world’s population.
In the film, Jones attacks the alleged New World Order and their attempts to establish a world government. Though this has been a common theme in many of his past films, End Game focues on the “elites” attempt to exterminate 80% of the world’s population via advanced technology and diabolical plans.
The film highlights controversial topics such as:
- The Bilderburgh Group
- The North American Union
- Eugenics programs that have been explored by governments
I, personally, cannot say that I agree with everything promoted in the film, but I do think Jones brings up some interesting topics that are backed by credible information. I admit that the ideas that are brought forth can sound outlandish, especially since Jones has long been criticized for his fiery radio shows and his beliefs in conspiracy theories. However, the film seems to be the work of a substantial amount of credible evidence and is presented in a very high-quality manner.
I give it 5 stars because it is one of those films that are very thought-provoking (whether you agree or disagree with the issues), and these thought-provoking ideas are so shocking that you have to watch the film more than once.
I hope that you educate yourself.