Brace for Impact

By Greg Hunter’s USAWatchdog.com 

“Brace for Impact.”  I have thought about this economic collapse title for months.  I held onto it and figured I would know when the right time was to put it out there.  Today is the day.  Watching mainstream media (MSM) this weekend, you would think a one notch downgrade to America’s debt doesn’t really matter.  For example, former CNBC anchor Erin Burnett said Friday night on CNN the downgrade was “already priced into the market.”  The panel spoke as if the first U.S. debt downgrade in history was no big deal.  To that I say, positively absurd!

The gold market must think the same thing I do because when the Asian market opened, the price of the yellow metal shot up more than $27 an ounce, which is another all-time high.  At around 1:30 am today it was up $50 and ounce another all-time high!  I don’t know where gold will close in the U.S. market, but I think it is safe to say gold (and silver) prices are going much higher.  On the other hand, stock prices are headed much lower.  I’ll be shocked if the Dow doesn’t end 300 points lower today.  I wonder if the Plunge Protection Team (aka the Presidents Working Group on Financial Markets) will step in front of this runaway locomotive.

China also thinks the U.S. debt downgrade is a big deal and a big negative future trend.  CNBC reported yesterday, “The man who leads one of China’s top rating agencies says the greenback’s status as the world’s reserve currency is set to wane as the world’s most powerful policy makers convene to examine the implication of S&P’s decision to strip the United States of its triple “A” rating.  In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is “gradually discarded by the world,” and the “process will be irreversible.”  (Click here for the complete CNBC story.) 

There are those, this week, that said the downgrade of the U.S. credit rating will be a “wake-up call” for Washington politicians.  Some pundits claim this might pull both parties together, get something done for the good of the country, and finally deal with the immense problem of debt spending and entitlements.  I think this will end up becoming a battle cry for both Democrats and Republicans in the 2012 election.  Both are blaming one another for the downgrade.  Yesterday on “Meet the Press,” Senator John Kerry (D) trotted out some new partisan language and called the S&P action on U.S. debt a, “Tea Party downgrade because a minority of people in the House of Representatives countered even the will of many Republicans in the United States Senate who were prepared to do a bigger deal.”  Speaker of the House John Boehner (R) said this weekend, “Unfortunately, decades of reckless spending cannot be reversed immediately, especially when the Democrats who run Washington remain unwilling to make the tough choices required to put America on solid ground.”   

The political sniping over the weekend signals that both parties know the economy cannot be fixed anytime soon, let alone before the 2012 election.  So, the blame game is what we will be stuck with as the American economy continues to sink.  Forget about the “Select Committee” of 6 Democrats and 6 Republicans getting any deficit reduction deal.  The fight over spending cuts and tax increases is stuck in a feedback loop.  That is part of the reason why S&P cut the credit rating of the U.S.  Nothing is going to get done on the debt, at least not before the country goes off a financial cliff.  In cutting U.S. debt, S&P also ultimately cut the value of the dollar.  Almost all borrowing costs at all levels will rise, and the dollar will sink right along with the slowing economy.

Economist John Williams of Shadowstats.com has been warning for months about a sudden dollar sell-off.  According to Williams, $12 trillion liquid dollar assets are held outside the U.S. (dollars and Treasuries).  If the holders of these assets throw in the towel and cash out, there could be a severe dollar sell off.  That could spike inflation, cause interest rates to surge and eventually plunge the country into a hyperinflationary depression, according to Williams.  A special Shadowstats.com report put out yesterday said, “Lack of confidence in the U.S. dollar has been pushed to a new and more dangerous nadir in the last two weeks.  Dollar selling has been exacerbated by the contentious and virtually meaningless debt deal negotiated by the President and Congress, by Standard & Poor’s downgrading the rating on U.S. Treasuries to “AA+” from “AAA,” and by mounting market recognition of the ongoing U.S. economic and systemic-solvency crises.  Pending still is the Fed’s move to QE3.   
The dollar’s back is close to being broken.  Despite near-term interventions and extreme volatility, the heavy dollar selling that follows will be highly inflationary. . . “

The kind of impact we are going to have will not be like flying into the side of a mountain.  It will be the kind of crash that skids over land, clipping trees and buildings until the plane ends up wingless in a smoldering heap.  I just hope the fuel tanks don’t ignite when the long rough ride is over.

Comments
  1. Steve A.

    Greg:

    Permit me some random thoughts. God forbid another round of QE but it’s just about the only bullet uncle has. I feel if there is, especially in an upcoming election year, QE will be direct to consumers ie: free checks for all! My, think of all the votes Obama could buy.

    Thinking of individual credit FICA scores I’d be willing to guess 750-800 is excellent, 650-750 good a little lower than 650 iffy and less than that poor. My point is how in the world have we kept S&P’s blessing with a triple A when the village dolt can see it should have been downgraded long, long ago.

    If 75% of the budget is SS, Medicare, Defense and debt interest it could be argued that if all other programs were cut (42% of current spending is borrowed money) then we would still be deficent spending mode.

    Could the Feds be playing this no win game so the people will give them their approval to cut SS, Medicare and defense? I firmly believe we are being set up for this.

    • Greg

      Thank you Steve and James!
      Greg

    • jo veno

      i’m with martin armstrong, there will be no wholesale dumping of dollar treasuries. it’s too difficult for countries that hold hundreds of billions of it. what will happen is that one night while america sleeps the BRIC countries and their allies will wrest the power to issue and govern the dollar from the fed reserve and u.s. treasury. all without firing a shot. from then on the u.s. dollar will be a virtual reserve tied to the floating market price of gold and maybe the currencies of the strongest creditor nations. this will fulfill sinclair’s prediction but without the dislocations of a collapsing dollar. the u.s. will create another currency that works only nationally. they will be apportioned some of that new gold tied reserve currency as befits a debtor nation.

      the chinese said as much when they blasted the americans after the debt downgrade and demanded an international committee to handle the dollar instead of the u.s. government.

  2. James T

    I don’t think the government ever intends on paying the debt down. They will milk the dollar for what its worth. I believe we have a new currency on the horizen.

    • james

      brother james :
      YOU HIT THR NAIL ON THE HEAD… good shot
      im amazed the mediaostitutes are not pionting this out more.
      china is wanting the worlds money to be the sdr
      my question to greg is what would happen to gold if the sdr get put in place quickly.

  3. Lynn

    As for the “immense problem of debt spending and entitlements” I would say that military spending is contributing to the debt as much, or more, than entitlement spending. It cannot be called “defense spending” either. Much of it is just plain wasted. As anyone who has worked for a defense contractor knows, multi-million dollar projects turn out to not work and are scraped. Boondoggle after boondoggle occurs.

    In addition to this, the U.S.’s “intervention everywhere” foreign policy is making America more hated and subject to attack, not less.

    I personally do not believe there is even a concern among the powers that be with defending our country; if there was, our borders would be secured. Anyway, my point is that there are far more problems than just entitlements. But you were totally correct in seeing the economic crisis coming, Mr. Hunter! Keep up the great work!

    • Greg

      Lynn,
      I totally agree. The U.S. spends more on defense than ALL countries in the world combined.
      Greg

      • Thomas

        Correction… You mean the U.S. spends more on offense than all other countries combined. Let’s call it what it is… It is an offense department. It is NOT a defense department.

        • Greg

          Thomas,
          Ok, Thank you for the comment.
          Greg

    • joe

      At least defense is a mandate of our federal government and was set in place by our founding fathers. Entitlement spending wasn’t even on their radar screen.

      With that said, obama promised to get us out of the wars if he was elected, but only put us into more. Just another lying politician…

      • anne winn

        The sort of military/industrial complex (making war for profit) was never a mandate set in place by our founding fathers and come to think of it neither was the Federal Reserve. When this country was founded most of our wealth came from agriculture, congress was not a career path but a brief stint in public service, and corporations were not regarded as citizens with the rights SCOTUS has granted them via their appalling Citizens United decision. We have moved so far from what was envisioned in the late eighteenth century as to render the United States of American in its present disfunction as unrecognizable by Franklin, Adams, Jefferson and even Hamilton.

        • joe

          I didn’t say that “making war for profit” was a mandate set in place by the founding fathers. What I said is that it IS a mandate of the federal government to provide for the DEFENSE of the United States…and I stand by that comment. I also said that entitlements were never a mandate of the federal government. Until the 20th century, it was understood that people made their own way. Along came FDR and the Federal government became a babysitter which repeatedly encroaches on our liberties in order to accommodate those who falsely believe life owes them something just for being born.

          I do agree with everything else you said with the possible exception of Hamilton, who was an advocate of a strong central (Federal) government.

  4. Brent

    For once Greg, I am actually getting scared. My normalcy bias is now going away and I actually think Alex Jones was right all along with his new world order theory. God help us all.

    • wisefool

      The Bible said it first. I would look there before Jones. Jones can’t save your soul.

    • james

      its ok brent.
      its a scary time for everyone. brother were going to be ok.
      we will continue to take of each other.
      make sure you give more then you take. you will be ok.

  5. iknowbetter

    Nobody really knows what this downgrade means or what it will lead to. We’ve never been in this situation before.

    For a counterpoint to the hysterical, try Martin Armstrong’s latest posting which suggests S&P shot itself in the foot on this call…

    http://www.martinarmstrong.org/files/USA%20Debt%20Downgrade%2008-01-2011.pdf

    You must know Armstrong, Greg, since you’re a Jim Sinclair fan.

    …ikb

    • Greg

      IKB,
      I am a big fan of Armstrong. Thank you for the comment and link.
      Greg

  6. Sandy

    Greg,
    Great analogy, but you can’t blame poor money honey Erin, she’s just doing her job of trying to keep the confidence game going. Lie to me, tell me everything is alright, it’s what most people want to hear. The sad thing is, feeling good now won’t help you prepare for the future. When the inflationary fires start, everyone will be forced to face reality, the con game will be over and poor Erin will be out of a job. The S & P downgrade stated the obvious, the amazing part is, that they had to state it for anyone to hear it.

  7. Davis

    Well this is what happens when the engines start to fall off at 30,000 ft! The Rumors on the banking front in Europe this morning are that SocGen in France and UniCredit in Italy are about to go belly up. Couple this with the Credit Default Swaps against B of A jumping 10% this morning and it would seem to lend credence to the additional rumor that JP Morgan is getting ready to make a run at B of A for a not so friendly takeover. So what could possibly go wrong with the “Morgue” then controling such a huge chunk of the global financial market? The political suckling pigs will no longer just be latched to the bankers teet, they will be surgically attached!

  8. Baja Bryan

    Greg,

    I completely concur with your assessment. I’ve thought about this moment for some time and often hoped I was wrong and it would somehow be avioded. In usual fashion the politicians (clown show) continue to point fingers and avoid accountability. We are no longer in wait and see mode, reality is here and she ain’t pretty.

  9. Lara

    Great summary. I just wish I had an ejection seat with a parachute.

  10. Davis

    Interesting that both the DAX and STOXX markets in Germany opened down almost 20%. Nothing to see here! Load up on Netfilx and Treasuries!

  11. matslinger

    THE DIRTY DOZEN + ONE = “THE MASONIC 13″
    I DONT BELIVE THIS GROUP WAS COAGULATED TO SOLVE ANY BUDGET PROBLEMS,
    MORE LIKEY, THEY IN CONJUNCTION WITH THE “BOARD OF 10 GOVERNORS” HAVE
    BEEN DELEGATED TO IMPLIMENT THE END GAME, AND ORCHESTRATE A MILITARY
    REAPONSE TO “DE-COMATIZING AMERICAN SHEEPLE.
    THERE HAS NEVER BEEN ANY REAL EFFORT, RECOGNITION, OR DESIRE TO FIX
    THIS COUNTRY, ONLY A CONCERTED EFFORT TO KEEP HER CONSCIOUS LONG ENOUGH FOR EVERY POLITIAN TO GET A TURN.

    THE KEG HAS BEEN MAKING FOAM FOR QUITE A WHILE NOW, SOME STILL STAND’IN LINE WITH THEIR PLOYETHYLENE CUPS, HOPING TO PROLONG THE BUZZ… THE FAT LADY IS HUMMING REAL LOUD NOW !

  12. Elliot

    Hi Greg, I always look forward to your comments and greatly appreciate them. Keep up the good work!

  13. Richard

    Thanks for another timely article, Greg.

    Major absurdity of the day: US credit rating lowered, US bond prices HIGHER. Are we living in Alice’s Wonderland??

    A close 2nd in the “go figure this category”: Gold mining stocks. They trade lower when the price of gold retreats, they trade lower when the price of gold soars. Dare I say manipulation??

  14. PC Wyte

    Mr. Hunter – thank you for your commentaries. I appreciate them as they are helping me prepare for what is coming. I’m Canadian and figuring out how we will be affected by this “correction” is not easy. We often joke that when America gets a cold, Canada gets pneumonia. The reason is our dependance on the US’s purchase of the majority of our goods and resources. You have always been a well balanced commentator. I can see what is happening by reading your articles. So, thank you again and yes I like your cartoons and captions. “Get ready for impact!”, may turn out to be the most ominous of all.

    Paul

    • Greg

      Thank you Paul.
      Greg

  15. Sam

    Dear Greg,

    Good analysis.

    As to the “blame game,” I think the American people have had it with that stuff. More and more I read and hear everywhere for cries of “leadership” for both parties. More and more, the people want the president to “man up,” take responsibility, and LEAD. But, that will not happen from the blamer-in-chief, will it?

    As to gold and silver prices, it seems the “powers that be” don’t want a panic. Yesterday, I went to my favorite precious metals site, Kitco, at 4:00 p.m. PDST. Now ordinarily, Kitco shows prices when the markets open, but to my shock, they said that the markets were CLOSED. I had to glean what I could last night from Fox and Bloomberg.

    Blaming and censorship will not stop what is going on about us. We need real leadership, NOW.

    • Greg

      Thank you Sam for the comment and reporting.
      Greg

  16. Jerry

    Yes, my Gold and Silver have been wise investments. I am sure that gold will go up beyond $2,000 an ounce, and Silver over$100 by the time Geitner and company finish their plan to destroy the economy along with the dollar. But my most valuable assets besides my family are farmland, in two areas. Heirloom organic seeds, great soil, good water, wind and solar power systems, electric vehicles and lots of every day household items by the case. My other investments and cash reserves are not in American dollars. I have been bracing myself for a while now Greg, I’m sure a lot of your readers have prepared or will start now. Everything the U.S. government does along with it’s war machine, monetary policy, etc. proves to be predictable, and the wrong thing to do for America.

    • james

      many can wish they were you.
      i want to be you…lol
      all i need is the land,creek,and seed
      someday soon everyone will repeat this.

  17. Jay

    Just a couple of observations. First of all Greg, betting on the exact day of the final collapse of the American Dollar is like making rapture predictions. It’s kind of like predicting how long it will take for a mile long freight train to finish crashing. As they used to say at hog killing time, “it’s all over but the kicking and the screaming.” You can cut the hogs throat, but it still takes a while before he bleeds out and quits kicking. That’s how it is with the US dollar.

    Secondly, I think it is important to remember the articles we were reading about a year ago on this subject. One year ago European banksters were telling us that one of two currencies has to go in order for the other to stand a chance at surviving. Either the Euro dies and the dollar lives, or else the dollar dies and the Euro lives. Of course we know that eventually both currencies will go the way of all fiat currencies, but in the short run, it is true that there’s not enough chairs for both of them to sit down when the music stops.

    Last of all, keep in mind that in previous crashes of the stock market, there was an extreme high before the crash. But let’s also remember that the stock market is not the tool of an economist, but rather the propaganda piece of manipulated news agencies. In fact the stock market has little to do with the actual health and well being of a nations currency and economy because it is based on debt and speculation rather than real goods and services output. The best indication that a person can derive from a stock market to determine the health of an economy is observed in how many people depend on the stock market for an indicator of health. When people demonstrate that they have become economic ingoramouses by guaging the status of their nations economic well being by the condition of the stock market, then you can truly say that the nation is in peril financially because people are too ignorant to manage their own affairs and they have all become gamblers.

    • Greg

      Thanks Jay for the comment and analysis.
      Greg

  18. Vess

    I beg to disagree. The downgrade *is* no big deal. Think about it.

    The US economy is just as crappy today as it was on Friday. What’s the difference? That some rating agency with a reputation for sloppiness has finally bothered to admit that the outlook of the US Treasurys is not-so-stellar? C’mon, we both know that the US debt is no better than the Greek debt. One of them can’t print money and will default, while the other will print its currency into oblivion and will end up paying cents on the dollar. Same thing.

    Do you notice that the dollar, while down a bit, isn’t exactly in freefall? Do not underestimate the PPT – and not only them. They haven’t even begun to fight in earnest. Expect the powers that be all over the world to engage in massive bond buying, currency interventions and whatnot. Expect a smackdown of gold, too.

    So much noise has been made about the mutual funds whose charter allows them to invest only in AAA bonds. Well, guess what? Charters can be changed. Heck, they changed even the FASB rules to cover up the fact that the majority of the banks are insolvent. What do you think happened when Japan’s debt lost its AAA grade? A major sell-off in Japanse bonds? Not at all.

    There will be no “impact”. The end of the world will not be televised. There will be just a slow, grinding, painful and seemingly endless slide down into oblivion.

    • Greg

      Vess,
      I keep hearing about Japan and that is a poor comparison to the U.S. The Yen is not, and has never been the world’s reserve currency. Japan did not have to sell its debt to the world. It sold its debt to its own people because it has an extremely high savings rate. That is not the case in the U.S. The U.S. downgrade was the first in history and all the ratings agencies have the U.S. on negative credit watch. There will be more downgrades and that is a fact, but it is not the downgrade of the debt that is the real problem. In reality it is the downgrade of the dollar. You can disagree all you want but the economy is in a tail spin and so is the buck. The U.S. will not pull out of this anytime soon. Thank you for sharing your perspective.
      Greg

      • Vess

        I didn’t mean that Japan is similar to the USA. I just used it as an example of virtually no impact of the downgrade, despite the fact that many funds who held Japanese government bonds had charters that allowed them to hold only AAA bonds. After the downgrade their charters were changed and that was that. The same will happen in the USA.

        I don’t disagree with your general conclusion about the direction of the US economy and the dollar. I just disagree that the current downgrade is a significant event on this path.

        • Greg

          Vess,
          You are a very smart guy Vess and I love your comments. Please keep them coming. You make us all think! Thank you. I do have to say the 600 point loss in the Dow says the downgrade was significant. Peace bro.
          Greg

      • Josey Montana

        Saying the “downgrade is no big deal” because “the markets already understand” is disingenuous.

        It is a label. A tag. It is the concept Orwell’s “newspeak” attempts to eliminate: AN IDEA THAT MUST NOT BE GIVEN LIFE.

        Now even the common man has a word to make his palpable but undefinable uneasy and even sickness tangible: DOWNGRADED.

        Do not live in the Wall Street bubble! There may be gazillionaires in Connecticut and wannbes in Jersey making fortunes off the game. But the other 320,000,000 souls in this country are only now realizing they’ve been played for fools.

        You see, their granddaddies left the Old Country as they thought they deserved more than toiling unto death as a serf for some asshole with a title.

        Now, barely a hundred years later, they find themselves toiling for more assholes with a title — and most of these are “immigrants” themselves!

        Understand this: when this becomes generally understood, the outcome will make Madame Defarge look like a UNESCO worker.

        • Greg

          Josey,
          Good stuff!
          Greg

      • james

        greg for congress.
        see, this is why i read your articals. you always piont out the info some like me missed.

        • Greg

          Thank you James!
          Greg

  19. Stan H

    Obama is no Sullenberger.

  20. M SMITH

    Greg, what S & P did was bone a headed move. All of us will be paying higher taxes, you wait & see. Obama will let the Bust tax cuts expire & Americans will not even know it until it has already happen. Obama will get get his way, higher taxes to spend,spend,spend.

    There’s no dought we have a Sovereign Debt Crisis, however if that was the real reason for S & P’s downgrade, then it should apply to all Countries & the real ratings should be below JUNK STATUS! Why? THERE IS NO COLLATERAL. We borrowed our way into this mess. I have read Armstrong’s 8/6/2011/ writing and he make more sense what the S&P downgrade has done & it’s not pretty! I am waiting on a answer I submitted to Martin, if he answers it, I will pass it on right here!

    There is a political fire storm brewing in Washington DC, the tea party has no tea in their cups & a third party may rise up & give Obama 4 more yrs to finish off the USA, banana republic here we come!

  21. Mac slavo

    This can’t be happening because mr. Geithner said that a US debt downgrade would never, ever happen. Yet, here we are. It will be like nothing we’ve ever seen in our life times, according to trend forecaster Gerald celente. Perhaps all of those pessimism porn disseminators in alternative media were on to something back in 2007 – you remember, back when everything had triple A ratings – and we were recommending that investors consider wealth preservation assets like gold and silver, or non traditional investments like direct commodity food purchases (such as wheat, rice, beans, etc.)…. At this point, the only question is how bad is this going to get over the course of the next decade? Unfortunately, it’s highly likely that The fuel tanks will ignite, destroying any semblance of normalcy in America…. Some might call it TEOTWAWKI… The end of the world as we know it.

    Great article. Thanks.

    Mac
    SHTFplan

    • Greg

      Thank you Mac.
      Greg

  22. Diane Carol Mark

    Greg,
    I read that it takes 2 agencies to downgrade before the downgrade actually applies. Would you comment on this?

    From the NYT:
    http://www.nytimes.com/2011/08/06/business/us-debt-downgraded-by-sp.html/
    “But many analysts say the impact could be modest, in part because the other ratings agencies, Moody’s and Fitch, have decided not to downgrade the government at this time…Some investment funds, too, often treat Treasuries as a separate asset category, so that there is no need to sell Treasuries simply because they are no longer rated AAA. In addition, downgrade of long-term Treasury bonds does not affect the short-term federal debt widely held by money market mutual funds.”

    Thanks,
    :) Diane

    • Greg

      Diane,
      The downgrade was in reality a downgrade in the U.S. dollar because the we can print money to pay the interest. As you can see, gold is reflecting this fact.
      Greg

  23. Bonnie

    Brace yourself! The Falking gold and silver “aint” nothing!
    Who taught Humanity, that gold and silver were valuable, and to be sought and fought for, to kill for, to spend your last bit of money on?

    Was it some Aliens from another world? Talk about Anunnakis (spit spit!).

    More valuable is water and bread!

    More valuable is friendship, someone to watch your back!

    Land! Earth (black earth) to plant crops!

    You can’t live without those!

    And as a bonus, add family and friends, eh!

    TO HELL WITH THE ROTTEN METALS!

    • Greg

      Thank you for your perspective Bonnie.

    • james

      LOL LOL LOL
      glad you found this site bonnie. i look foward to you next statement.

  24. Anonymous

    Some good points are raised here. I’d like to add that if you’re going to talk about the waste of ‘entitlements’, please don’t ignore the immense spending on ‘defense’, a term which has been twisted into justifying unending wars of choice and profit for military contractors.

    Bringing our troops home makes more sense for the American people as an immediate step to correct the budget mess, than does cutting off food and heat for the elderly. After we have cut out the F-22, F-35, the wars in Central Asia and the rest of the military boondoggles that do not benefit the people in any way shape or form, we can look at what is left for our elderly and poor, and we might be surprised at how little Granny’s heating gas bill costs in relation to G.I. Joe’s fuel bill.

    • Greg

      Anonymous,
      Agreed.
      Greg

    • james

      omg
      tell it like it is.
      you sound like ron paul
      ronpaul2012.com

  25. Erik

    Thank you for telling the truth. I’m a college student who has endured endless lectures in politics and economics, which map out a scenario that the U.S. is indestructible, and that nothing can harm us. But I know the truth, and am tired of hearing the “NEWS” telling us the sugar coated version of the story. I’m definitely going to bookmark this website as a trustworthy reference.

    • Greg

      Thank you Erik!
      Greg

  26. markm

    Hey Greg,

    “Speaker of the House John Boehner (R) said this weekend, ‘Unfortunately, decades of reckless spending cannot be reversed immediately, especially when the Democrats who run Washington remain unwilling to make the tough choices required to put America on solid ground.’”

    You wrote:

    “I think this will end up becoming a battle cry for both Democrats and Republicans in the 2012 election. Both are blaming one another for the downgrade.”

    I did not read any sniping in Boehner’s quote. I am sure you could have used a better quote of Boehner using red-meat to gin-up tea-baggers!

    Please tell me what is wrong with Boeher’s quote? He, in affect is blaming both parties for decades of reckless spending.

    S&P did not call for increased taxation of 4 trillion over ten years. They said we need to bring-in-balance by 4 trillion. Cut, cap, and balance has passed the House. The Senate and Obamageddon need to get onboard with cut, cap, and balance.

    No new taxes until Washington makes a down payment of 4 trillion in hard cuts!

    Boehner’s point regarding Democrats not wanting to make tough choices is correct; the status-quo is unstustainable. Simple math and history proves this point. Debt-man needs to get-with-the-program.

    markm

    • Greg

      MarkM,
      The point here is there is going to be gridlock in Washington. I think they should not have raised the debt ceiling and we should have been forced to meet our financial problems head on. Expect gridlock was my point but your point is well said and well taken.
      Greg

    • Bob

      How long has Boehner been in Congress, I could care less what he thinks.

    • james

      im offended by the term tea baggers. its as if you dont agree with what i say your intitled to be given a tag name.
      this is why i dont like the republicrates…lol
      not to forget the demopublicans
      let us just agree to disagree in respect.
      as men and women, adults in care of the GOD given opertunity to love.

  27. Phil Fleming

    And the Pesident says, What the S&P thinks doesn’t matter. We know we’re great and that’s all that matters. Smoke and Mirrors, just more Smoke and Mirrors.

  28. Bob

    Inflation is the old friend of governments, cut the gold coin in half. It don’t matter what the little person plans , the people in power will always control the sheep with gold are paper money. You uses the kings money you stay in the flock and take what they dish out to you. Kings and government will always end up taking from the producers they have no other way of making a living. What happens over time the Kings family are the government insiders just keeps getting bigger and bigger. Soon the sheep are being eaten faster then they can reproduce. Soon the few fat sheep, pension funds , gold will be gobbled up by the top feeders. Crazyyyyyyyyyyyyyyyyyyy grab some leather an hang on.

    • Greg

      Bob,
      Right on target man!

  29. Traze

    I really hate to say this… but I think the American people deserve whatever we have coming to us. We can blame the banks, speculators, hedge-fund managers, Obama, defense contractors, Tea Party, etc…

    However, the only people we can truly blame are ourselves. We’ve lost our ability (if we ever had it) to critically think… and as a result we are witnessing the beginning of the internal collapse of a superpower­.

    Personally I think caused by the ruling power’s greed, and pursuit of profit and dominance through any means… and permitted by the inability of the mass majority of Americans to critically think. The complacent­, brainwashed, and sheer ignorant American population has forfeited their ability to reason by allowing their education system to be turned into a how-to-max­imize-prof­it internship from kindergarten to graduate school. The American citizen b/c of sheer incompetence in basic understand­ing of how the world works has become a slave in mind.”

    I love my fellow Americans… but I fear we’ve lost control of our minds, literally.

    A personal question for Greg… I know both politcal parties are corrupt beyond recognition… and implore tactics that are extremely rather less than honest… but without naming names… is it not obvious that one of the two major parties is pressing forth full steam ahead, by any means neccessary for a banana republic, coup d’etat of the World gov’t (USA)?

  30. Geo

    Washington is so messed up it’s time to scrap it and start over.

  31. Marcel

    Greg,
    It’s much more than just an economic collapse.
    As it was With the Roman Empire the barbarians are at the gate.
    You can be sure that our enemies will be there to kick us when we are down along with some old friends.
    I first heard this message in 1991 from Romanian Christian Dimitru who was sent her to warn America of what was coming.
    Ever since then I have been watching and waiting for this part (below) of his prophecy to happen here.
    I don’t think we are too far away. We are already seeing roaming blackberry,flashmob gangs targeting whites around Chicago,Wisconsin and elsewhere.
    This growing unrest all comes with the economic collpase now under way.
    The liars and manipulators in the media and government will not be able to hide the truth much longer and the duped masses will turn into enraged mobs.

    ‘from the middle of the country, some of the people will start fighting against the government.The government will be busy with internal problems….
    http://www.handofhelp.com/vision_1.php

  32. Jan

    Greg,
    I agree, it will be total grid-lock and vote buying spending leading up to the election. Who knows, OEIII may give the the people “the
    Obama money” like they thought they would get when he was elected, no more rent, house, or car payments, Obama would take care of all their needs. They voted for Obama and will do it again if they get their checks.

  33. Joel

    I feel badly for the ordinary American who has no idea his life is about to be turned upside down (and mine too). But sooner or later, the truth will prevail, gold and silver will become America’s money again, government will be bound again by the chains of the Constitution, and we’ll go back to being the greatest country on Earth. I truly believe that. God bless America.

  34. William

    DON’T Load up on treasuries….they are one of the dogs waiting to be put to sleep (killed). If you are going to load up, make it silver or gold…. As soon as the margin calls are gone their stocks will be off to the races. Any one stupid enough to have been out on margins are dead on arrival. WARNING: China has been wanting to clean our plow for a long time and if this begins to look bad enough for us they will make a run at us. Their war manual says clearly to wait until your enemy is on their back economically before you jump in and start wailing. If they make a run expect Iran, Lybia, Russia, and others to be in the mix (read Eze. 38,39). Good news….We Win!

    • Greg

      William,
      I’ll bet the win will cost us all dearly. Thank you for the comment.
      Greg

  35. george

    I see Axelrod and the dishonorable Senator J. Kerry calling this the “Tea Party” down grade. How in the world is me asking for a fair tax system and the Government to stop reckless spending. So, my asking for a “live within our means” system caused a downgrade? How can these dumba$$ in congress and their minions spew this pooh-pooh and get anyone to believe them?
    Everyone, we are bankrupt as a Nation financially and the government is bankrupt morally. Remember the old saying, ”Fool me once, shame on you. Fool me twice, shame on me”.
    They even say that one person can’t make a difference. Just remember they lie and hold them accountable in the next election, if there is one.

  36. Jim

    Greg,
    Add me to the list of those who haved feared this endgame for many years….closing the gold window in ’71 which led to the ability to run consitent deficits ever since, shipping our best manufacturing jobs overseas, repealing Glass-Steagall that protected depositors, bailing out the banks that created risky derivatives, allowing the Federal Reserve to exist as the enabler to these very crook banks….while at the same time destroying the value of our dollar …..is there anybody who does not believe this was a planned destruction…….anybody ????

    • Greg

      Jim,
      The 40th anniversary of Nixon closing the gold window is 8/15/11… Isn’t that an odd coincidence?
      Greg

    • Eagleye

      ELECTION FIXES
      How the Globalist Bankers, the owned Media & Politicians scammed the voting public for decades.
      How OUR REPUBLIC has been sold out
      There are too many bought politicians. Many are members of David Rockefeller’s Council on Foreign Relations (CFR) & Trilateral Commission (TC)
      – Quite a Partnership! Both parties have given us a $14.4 TRILLION DEBT, paying interest to THE FED for the use of our own money since 1913.
      – Congress has the power and responsibility to uphold the Constitution (Article 1;Sec 8)
      – Issue US Notes with no interest to the parasitic globalist Banksters.
      Here is how “THE FIX” works: Dems nominate a globalist/socialist & RePubs a globalist/fascist; both associated with Rockefeller’s Council on Foreign Relations (CFR) & Trilateral Commission (TC). (ALL> FordVsCarter KerryVsBush, BushVsGore, BushVsClinton, ObamaVsMcCain) Then the duped voters, vote for “the lesser of two evils”. All other parties and candidates are eliminated with the help of the owned Lame Stream Media (LSM).

  37. Art Barnes

    Greg, the rating had to go down or else the rating agencies will become not relevant. The other agencies are looking like the MSM and hoping to cash in from the government’s investigation of S&P’s downgrade; frankly, the other agency fools want S&P out of the game so they are holding back their downgrades and getting praise from Congress & the govenment. CNBC is seeing all kinds of buying signals as the market took a crap. Tomorrow we will see the sneaky Feds deliver a small, short coded quote about their intervention of QE3 or atleast their strong understanding that it might be needed in the short term (or bullshit words of that effect) and the markets will stabilize and a short “bear” rally will insue about 500 or more points (all the while gold continues upwards – go figure that). I believe MSM, the other credit rating agencies, the Fed and CNBC have atleast another year or so that they can continue to fool the people about their theft of the great middle class and the Greek status of our nation. Their continued bullshit about the economy will work a little longer because they know we all want to hear good news. Inflation we will suffer, but not a crash in my mind, its a year or so off. Thanks Greg for your blog.

    • Greg

      Art,
      Thank you for the coment and support.
      Greg

  38. Skip

    Look out the New World Order is on the way!

    • Eagleye

      Obama filled his cabinet with CFR/TC members & “The Fix” continues.
      CFR members are very tightly affiliated with the U.S. government. Since 1940, every U.S. secretary of state (except for Gov. James Byrnes of South Carolina, the sole exception) has been a member of the Council on Foreign Relations and/or its younger brother, the Trilateral Commission. Also since 1940, every secretary of war and every secretary of defense has been a CFR member. During most of its existence, the Central Intelligence Agency has been headed by CFR members. Virtually every key U.S. national security and foreign policy adviser has been a CFR member for the past seventy years. Google: CFR,TC,Bilderberg

      The Repub Party NEOCON “leadership”, is the Fascist/Warfare arm of the Banker’s CFR/TC/Bilderberg NWO agenda. With unlimited financing & LSM control, Repub voters choices are limited to CFR members with the same NWO agenda. Obama continues the Banker’s NWO agenda. The Int’l Banksters got what they wanted either way; the further elimination of our liberties and Constitution, and the continued raiding of our treasury.

  39. A ROBINSON

    EVERY BODY IS SAYING WHAT IS WRONG. WE CAN DO SOMETHING ABOUT WHAT IS WRONG, THERE IS AN ELECTION COMING UP, WE SHOULD START OPERATION CLEAN SWEEP AND VOTE THE REST OF THE SOLD OUT BASTERDS OUT THAT IS IN HOCK UP TO THERE BLIND EYE BALLS TO BIG MONEY. THAY HAVE GIVE THIS COUNTRY AWAY TO GET RELECTED. YOU THAT HAVE VOTED FOR THEM FOR YEARS AND EXPECTED A DIFFERENT RESULT LOOK IN THE MIRROW YOU ARE THE MAN.

    • Montage

      You have a lot to learn my friend. Thinking you can simply vote the bastards out is too simplistic in nature and if you understand how things really work you’ll know that option has not truly been available to us for many decades.

      Puppets controlled by the same masters

      • Eagleye

        ELECTION FIXES
        How the Globalist Bankers, the owned Media & Politicians scammed the voting public for decades.
        How OUR REPUBLIC has been sold out
        There are too many bought politicians. Many are members of David Rockefeller’s Council on Foreign Relations (CFR) & Trilateral Commission (TC)
        – Quite a Partnership! Both parties have given us a $14.4 TRILLION DEBT, paying interest to THE FED for the use of our own money since 1913.
        – Congress has the power and responsibility to uphold the Constitution (Article 1;Sec 8)
        – Issue US Notes with no interest to the parasitic globalist Banksters.
        Here is how “THE FIX” works: Dems nominate a globalist/socialist & RePubs a globalist/fascist; both associated with Rockefeller’s Council on Foreign Relations (CFR) & Trilateral Commission (TC). (ALL> FordVsCarter KerryVsBush, BushVsGore, BushVsClinton, ObamaVsMcCain) Then the duped voters, vote for “the lesser of two evils”. All other parties and candidates are eliminated with the help of the owned Lame Stream Media (LSM).
        Obama filled his cabinet with CFR/TC members & “The Fix” continues.

  40. woody188

    Markets were already falling before the downgrade and the “plunge protection team” was unable to shore them up. An excuse, a scapegoat, had to be created to blame for the sell-off. So S&P was told to downgrade the US debt as an excuse for the already occurring market sell-off.

    Reality is the US market is in a tailspin thanks to global labor arbitrage disguised as “free trade.”

    In other words, the rich have traded our shared future prosperity in return for their own personal short-term gains. Contrary to Wall Street belief, greed isn’t good for the vast majority of people.

    Global corporatism is currently promoted as the only form of trade and international law. This is actually better referred to as fascism. Hard to believe we are fighting a “War on Terror” with a system of global fascism as the planned outcome.

  41. MikeD

    I’m still not understanding what is going on with the price of silver. I expected $50 by now given where gold is today. Is this a supply/demand thing?

  42. Ed the Grocer

    Greg,
    Do we really need a reserve currency? If actual money needed for ‘trade’ is considered, then currency swaps should be quite simple. Or is the fee structure just too darn profitable to change?
    Ed the Grocer

  43. Lawrence, UK

    No one should be surprised bu recent events. The writing has been on the wall for a considerable amount of time. Gold will be the last man standing. Buy it (physical) while you still can.

  44. Greg M.

    Well, it appears that the Plunge Protection Team went to work in the early am as the futures did an abrupt turnaround. Either that or someone got a heads-up that Helicopter Ben is preparing more “aid”.
    The 300 points down you mentioned will probably come later in the week. I’ll be amazed if it’s only 300.
    The bottom line on our politicians is that we vote for them, but they represent someone else.

    • Greg

      You are right Greg M.
      Greg H.

  45. Morris

    Greg…

    You appear to be such a smart guy, but I have come to the conclusion that you are seriously flawed in your analysis on just about everything precious metals related (not news wise though) and here is why…

    I also hope you take my following points as constructive criticism as that is what it is intended to be. I am a straight shooter and don’t ever BS anyone – as that is how I want to be treated too!!

    Here goes:
    1-) You have normalcy bias towards the PM markets. You weirdly believe what others are preaching just because they say so??? That is hogwash. As you have said, we are in unprecedented times and previous correct predictions by all of your so-called experts – – including past history of PM’s performance is 100% meaningless…do you not get this Mr. Hunter????? Do you not understand that all history to date is BS as what is happening now will re-write all of history!! What do I mean? Gold/Silver will be controlled and manipulated to no end and your sources have no clue on what/where they will go. THEY WILL NOT go to the numbers you or your experts predict…read above before you say history or someones track record say otherwise.

    2-) Where do you get your PM facts from specifically? Your friends in the industry that continue the fallacy of prices going to the moon – when they are basing everything on history…again read above.

    3-) I am not saying that PM’s won’t go up, but I can guarantee you this…just when you think PM’s will shoot to the moon – - they will be controlled and come back down – as big business and the wealthy don’t want the masses to wake up.

    So Greg please…wake up to this reality and stop with your normalcy bias of what history says and what so-called experts say…as it is meaningless in uncharted waters.

    Got it now??

    Morris

    • Greg

      Morris,
      You say I have flawed analysis, but offer no real analysis of your own. I quote the people who put their capital at risk, and have a track record of being correct. You say all that is “100% meaningless.” I consistently quote facts, figures and bring analysis that tries to guide people through historic economic times. Your comment brings nothing to the table. What would you invest in? What is your track record. Do you have a body of work to read? You comment is nothing more than an out of control rant It is you that has “normalcy bias,” and you ignore a 5000 year history of gold and silver being used as money and a store of wealth. I am not Jim Cramer! I do not offer trading advise or make market timing calls. I never have and never will. I have said that physical PMs should be a part of every-one’s portfolio (core position) and I tell people to hold PM’s for the long term and consider them an insurance policy not a trading position. This is advice that has worked well. I am open to criticism but please do not waste my time with unsubstantiated accusations. Thank you for the comment eve if I (and the facts) totally disagree with you.
      Greg

  46. A ROBINSON

    MONTAGE IF VOTING IS TO SIMPLE HOW DID EIGHTY SOMETHING NEW CANDIDATES GET UP TO WASHINGTON AND CHANGE THE WAY THANGS ARE DONE SO IT CONFUSED THE OLD BASTEREDS SO MUCH THAY DID NOT KNOW WHAT TO DO OR SAY.

  47. Patrick Warren

    It will be a long and slow death, and most people will not notice until it’s painfully clear in plain view that the recession not only never ended, but we’re living in a depression.

    The tricks the Fed resorts to- QE and no interest rates- protect the financial industry and Wall Street long enough for them to prepare for the transition to a non-USD world reserve currency. The result is all the middle class and lower class Americans get to suffer through high inflation that really hits home.

    The politicians will blame each other, but the Democrats have no leg to stand on in accusing the Tea Party, saying that a small minority infected an otherwise sensible GOP majority. That is utter nonsense.

  48. GoldenYahoo

    Thanks for all of your work, Greg.

    Like a slow motion train-wreck, we edge toward severe societal and economic impact. It can’t be stopped at this point.

    • Greg

      Thank you GoldenYahoo.
      Greg

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