Running out of Runway

Greg Hunter’s USAWatchdog.com 

It looks like even the mainstream media (MSM) can see a calamity if we are right on top of one.  Finally, the dire debt ceiling negotiations between Congress and the White House were covered wall-to-wall on all the major media outlets yesterday.   No comment better describes the frightful situation America faces over its debt problem than what Treasury Secretary Tim Geithner said yesterday on FOX, “. . . we’re running out of runway.  I never thought they would take it this close to the edge and let politics get in the way of demonstrating we will pay our bills on time.”  To extend that metaphor, even if the debt ceiling is reached just before the August 2nd deadline, doesn’t mean the government can get enough altitude to clear the trees.  It will take some time to implement the new bill, and time is very short.

Meetings in the nation’s capital yesterday did not produce a bill that can garner approval of the House, Senate and President.  At the open of the Asian markets overseas, gold was up $20 an ounce in the first hour of trading.  It hit another record high (with many more to come.)  Who knows if the yellow metal will hold onto the gains, but that amounts to a giant vote of no confidence from overseas consumers of our dollar and debt.  Remember, there are $12 trillion in liquid assets (treasury bonds and dollars) held outside the country.  A panic over the stalled debt talks in the United States could cause massive selling of those assets.  Interest rates would spike and the value of the dollar would plunge.  It would cause immediate pain for U.S. consumers and could disrupt markets worldwide.  The stakes in Washington D.C. couldn’t be higher.  What has been called a “cloud of default” could start hurling thunder bolts and producing torrential rain in the global economy.

To say the Democrats and Republicans are not on the same page is an understatement—they’re not on the same planet.  The argument between raising taxes and cutting spending has morphed.  It now includes a “must do” deal to take negotiations on raising the debt ceiling out of 2012 elections.  When the idea of a short-term debt increase was posed to White House Chief of Staff Bill Daley on “Meet the Press” yesterday, it was soundly shot down.  Host David Gregory asked, if “The President would veto a plan if it does not extend the debt ceiling into 2013?”  Daley quickly said, “Yes.”

Meanwhile, over on FOX, Speaker of the House John Boehner said, “I think the better path forward at this moment will be … to put together a process that’s doable.”   He’s basically talking about a short-term Republican plan that cuts some spending and pushes the debt ceiling up enough to pay the nations bills until the end of this year.  I don’t think the President will think that is “doable.”  That means no so-called “grand plan” and more debt ceiling debates in 2012.  Mr. Boehner says he will announce details of that plan on Monday.  On the other hand, Senate Majority Leader Harry Reid is getting a different plan together on the Democratic side.  It will reportedly cut the budget and raise the debt ceiling until after the 2012 November elections.  Does it sound like a deal is coming together to you?  Not to me.

Maybe that’s why the host of “FOX News Sunday,” Chris Wallace, asked Secretary Geithner yesterday, “What’s your plan for default?”  Geithner has already admitted he recently had meetings about this very subject with Fed Chief Ben Bernanke and others.  Mr. Geithner responded, “Our plan is to get Congress to raise the debt ceiling on time . . . we do not have the ability to protect the American people from the consequences of Congress not taking action.”  According to Geithner, 80 million checks a month are sent out by the government.  The U.S. borrows 42% of every dollar it spends, and a short-term default to some will happen.   Geithner repeatedly sidestepped the question of who will get paid and who will not.   I think Treasury debt, Social Security and the military will all get paid, but plenty of other commitments will not be.

I do not see how you tackle a debt problem by adding trillions of new debt.  I do not mean to sound like a Republican, but spending is the problem.  So where can you make some big cuts?  Neither party is talking about cutting spending for the military.  The U.S. spends more on defense than all other countries—combined.  I am not anti-military, but do we really need to start another war in Libya?  Do we really need to have bases in Korea and Europe?  Both parties are also mum on the continuing banker bailouts through Fannie and Freddie.  Why do taxpayers get the bill for $trillions in sour mortgage debt pumped into the failed mortgage giants by the big Wall Street banks?  Not a word about that by either party, let alone prosecutions.  To top it off, the big banks are in the process of negotiating immunity for their crimes!  You think I am kidding?  (Click here.)  Literally trillions could be cut in both areas, but that’s not what the debate is about.  Don’t expect the MSM to point that out because they all will get big bucks in political advertising for the 2012 election.

Most people are living like they are in the “blue pill” world of a Matrix movie.  I keep having this vision of a slow motion crash, and then, all of a sudden, someone flips a switch and bam!–we are at the speed of real life.  It’s sure looking like that switch is going to be flipped right around the beginning of August.

Comments
  1. Ron

    It seems to me Jim Sinclair hit the nail on the head when he said: “Calling increasing the debt ceiling a solution to a debt problem is too stupid to be stupid.”

    Of course it’s not too stupid for the depraved political class or their media shills. A country as badly run as this one can not long survive. And if it can’t it won’t. Buckle up.

  2. Steve

    Greg, if the federal reserve can hand out 16 trillion to their friends/subsidiaries w/o any congressional bills in 2008, how are the executive and legislative branches now suddenly relevant with regard to increasing the debt ceiling? Is “under the table” OK (i.e. federal reserve subsidiaries) but above board (i.e. payments due to the public in the form of social security, military, etc.) not OK? How is the constitution suddenly relevant with regard to money when it hasn’t been since 2008?

    What am I missing?

    • Greg

      Steve,
      You are on target and not mising a thing.
      Greg

    • james

      see ron pauls message today on ronpaul2012.com
      he answers your question.
      the aug 2nd deadline is irrelavent..
      on another issue.
      the people on this site can solve the problems in the country.
      RUN FOR OFFICE!!!
      we live in a oliegarchy not a constitutional republic,and esp not a democracy.
      if you had 90% of the vote to be elected your hands would be tied the day you entered office/step out of line,your dead.
      so get your food,water,guns and gold then head for the country caves, and hide out till the r f i d chip has conssummed our nation,and the rest of the communist countrys.
      or mass produce ron paul look alikes…lol

      just a thought among brillant folk, that you all are for being on this site.

      • george

        Sounds like someone didn’t take their meds this morning

  3. Ambrose

    Greg,

    Since it takes two to three days to implement new bill (if any), the latest to raise the debt ceiling is Wednesday (July 27th).

    Time is running out but I won’t be surprised if some kind of deal is made on or before August 2nd. Both Democrats and Republicans have been taking money from Wall Street and I don’t think they will do anything to hurt their donors. Although Obama talks tough to big corporations and big banks, he is still taking millions of dollars from his Wall Street buddies for his 2012 campaign. Keep in mind that Wall Street is controlling Congress and White House. Going default is not good to Wall Street.

    As you pointed out, there are many spending that can be cut. There are too mnay government wastes and unnecessary programs using up our tax dollars. I agree with you that military spending should be cut. War on terror feels distant when you are facing rising crimes in your neighborhood. While we spend billions of dollars on useless wars overseas, we are cutting our local police. I would rather keep our police to protect our families and homes. However if things get much worse and out of control, we might need our soldiers to patrol our streets. I hope that day never comes.

    Ambrose

    • Greg

      Thzank you Ambrose, James and Gregory.
      Greg

  4. James T

    If something is not done about the fuel prices none of it will matter anyway. There will be no recovery and most people will go bust. I’m convinced that fuel prices started the whole downward spiral in the first place.

    • TED

      Make sure your next car is flex fuel and build a still. (This not one of my humorous replies. Search for “Alcohol can be a Gas”.)

  5. Gregory D.

    I say Americans are fed up with political posturing, lies, corruption, deception & self serving bureaucratic inefficiency.

    These same people created this mess, let them get us out!
    We should refuse to have our taxes raised when all they do is squander most of the money. Let them “save” money by getting out of wars, getting rid of the huge bureauracy, cut all but the most necessary of programs(need/not want), & recoup the monies paid to criminals who benefitted from the so-called bailouts.

    Institute the policies of the Fair Tax Organization, strengthen the Independent(3rd) Party & immediately impeach all the incompetent policy makers who lied to us & got us into this situation. Prosecute where necessary. Clear the country of all illegals. Did I mention Tort reform? That seems to have been forgotten altogether by all.

    Form an independent Business Council that will create policies that are in the best interest of Americans both domestically & internationally.

    These items would be a “START” to fixing things….at least that’s the way I see things.

  6. nm

    This is an interesting piece. I was just talking to someone about America’s debt crisis and he said look….a guy we both know just had his software company sold for millions of dollars. He is going to get a windfall from it. So, my friends argument was that all this pessimism is missing a point and it is that there will always be entrepreneurs making money and doing well even during times like these. In other words, don’t let the pessimissm make you think that it’s all bleak, everywhere. America is still America. What do you think of this?

    After reading this quote, I no longer know what to think:
    “Both parties are also mum on the continuing banker bailouts through Fannie and Freddie. Why do taxpayers get the bill for $trillions in sour mortgage debt pumped into the failed mortgage giants by the big Wall Street banks?”

    Are the banks still being allowed to borrow money from the fed at 0% interest? What exactly is obama trying to do here? they’ve bailed out the banks twice and nothing positive has happened to the economy so why do they keep doing it?

    • Greg

      NM,
      The bailouts absolutely worked for the people at the top, it was the bottom that got screwed. Yes the Fed is still loaning money out at near 0%. Can you borrow money fore next to nothing? The bailout at the top (mostly big banks) continues.
      Greg

  7. Sandy

    If the Federal Government is looking for revenue, I like Ron Paul’s suggestion of defaulting on the $1.6 trillion dollar debt to the Federal Reserve. We could print our own money, why are we borrowing it from a banking cartel instead? President Kennedy started to do that and look what happened to him. Shows you who were dealing with.

    • Greg

      Sandy,
      Excellent point on Congressman Paul!
      Greg

  8. schweizer40

    CUT SPENDING, CUT SPENDING, CUT SPENDING. TELL THOSE ON THE DOLE THAT CAN WORK, TO WORK! CUT THE BANKS OFF, ARREST ALL THOSE WHO PERPETRATED CRIMES IN THOSE BANKS, PULL ALL OF OUR TROOPS HOME AND DO IT NOW. PROTECT OUR BORDERS FROM CRIMINALS AND DO IT NOW. GOD BLESS AMERICA.

  9. Norm Ezzie

    When we print,use and circulate counterfeit money seems to me we’re already in “default”! The question I must ask is: When the dollar dies and what will replace it?

  10. Art Barnes

    Greg, I don’t believe it, there will be a deal in the end, which no one will like so that each side can blame the other that they didn’t get what they wanted. The Republican truth came out last week where they want a short term deal to play with on the next election and the Whitehouse doesn’t because it will cost democrats votes & seats. Both of these idiots have got us here and your article discussed that the military, fanny & fredie, & the banks are not on any chopping block is spot on. What is troubling is just what is on the chopping block if not those three and why isn’t the MSM reporting what is up for cuts? Frankly, I am one of the minority out here that thinks a default would be good in the long run for this economy and its people, a reset if you will of some basic values. Once could look at the 1930′s a see whats in store for such an event, the people survived although some of the wall street elite didn’t make the fall. Just where will China puts its money if there is a default, in Mongolia? Come on America wake up, the default is just another scare tactic designed to continue the elite’s printing fiat money charade and its control over the American people.

    • Greg

      Art there will be a deal, but I think it will be after August 2nd. I hope I am wromng on this.
      Greg

  11. slingshot

    “…we do not have the ability to protect the American people from the consequences of Congress not taking action.”
    T. Geithner aka Butthead
    Protect us from what consequences? Wasn’t thinking about protecting the American People when the big banks were going down. Don’t forget the overseas banks. Just your own arse and banking buddies. What you fear most is retribution. I see it in your face and hear it in your voice. The American people have an 80% disapproval rating. Highest ever. I also see that Pelosi was adamant about getting in on these talks. Notice that she now heads home to do some campaigning. Her numbers must be low.
    I want you to know that I am angry and not mad, as mad indicates one not of sound mind. I am tired of this Mexican Standoff which plays Russian Roulette with our nations existance.
    What are some of those Consequences?
    1. The US Dollar goes down in value.
    2. Dollar can be devalued. 50%?
    3. World Reserve Status lost. Headed for third world status.
    4. New currency issued. 1 good one for 10 old.
    5. Bank Holiday. “THEY” decide how much money you can withdraw.
    6. ATM’s shutdown.
    7. Credit cards systems shut down.
    8. Stock markets takes a dive. U.S and around the world.
    9. Added pressure on welfare.
    10. Added pressure on unemployment.
    11. Food riots?
    12. Martial Law?
    13. Crime.
    Those that say this can not happen , I do hope you are absolutely right. Just that all my indicators are, that we are hanging on by a thread.
    Keep up the good work, Greg. Come hell or high water.

    • Greg

      ling,
      You are scaring me but you are absolutely correct in your thinking. Some bad stuff is going to happen.
      Greg

      • Oldguy

        Greg, This is truly the worst administration I have seen in my life, (77years). I include congress, (both parties).
        I retired at 65, but never quit working until I developed cancer at 75. To raise the retirement age by 3 years does not seem drastic. There are so many other cuts that could be done that would bounce us up to world leader status again, and I include getting rid of government perks too. Why pick on the rich while ignoring these perks. The prez is so ignorant about life, I worry about him being the carrier of the “FOOTBALL”. Like I said before, getready for mid-november!!

        • Greg

          OG and Willard,
          Obama is (as Gerald Celente says) out Bushing Bush. Thank you for the comment guys.
          Greg

    • george

      Hi Slingshot,
      Liked your post. What are some of those Consequences?
      1. The US Dollar goes down in value.
      Happening everyday
      2. Dollar can be devalued. 50%?
      We are at about 11% inflation now
      3. World Reserve Status lost. Headed for third world status.
      100% correct. The world is looking for a viable replacement
      4. New currency issued. 1 good one for 10 old.
      I hope you are right on this one. I am thinking more along the lines of 100 to 1
      5. Bank Holiday. “THEY” decide how much money you can withdraw.
      Likely have to do #5 so you can do #4
      6. ATM’s shutdown.
      same
      7. Credit cards systems shut down.
      same
      8. Stock markets takes a dive. U.S and around the world.
      get out while you can
      9. Added pressure on welfare.
      10. Added pressure on unemployment.
      11. Food riots?
      12. Martial Law?
      13. Crime.

      Like you said, many believe it cannot happen here in America. Even when presented with the facts of New Orleans after Katrina or riots and looting because some sports team lost; most say either the economy will get better [this isn’t happening in the near future and maybe not our lifetimes] or that it will never get as bad as it did during the Great Depression.
      Quoting Tiny Tim Geithner, “This is a very tough economy. And I think for a lot of people it’s going to be – it’s going to feel very hard, harder than anything they’ve experienced in their lifetime now, for some time to come.”

      For once this is Geithner telling the truth! Believe him. And be afraid, very, very afraid

    • Ken

      slingshot — not saying that I disagree about what’s ahead.. but as for the Reserve Currency status that the dollar enjoys — you do realize that this isn’t really a fair policy to the rest of the world, right? Then again, going to a sound money (gold/commodity-backed) isn’t fair to the countries that don’t own much gold or exports per capita.. Eventually, however, I think that a break from floating currencies would be better than what we have now. The Reserve Currency concept is a scam no matter how you look at it. Perhaps there is something to say about an organizations effectiveness at promoting economic vitality around the world, but if there is no periodic reevaluation process to determine if they are continually employing a strategy that equally benefits all nations…

      • slingshot

        Hello Ken,
        I agree with you that the US Dollar as the World Reserve Currency, combined with Fractional Reserve Banking is one hell of a racket. One that has exceeded its usefulness in the rebuilding of Europe after WW2. As for the International Money Fund and the Exchange Stabilization fund, they are just alterative means of extracting money. The big question is, for who’s benefit. People don’t really care about anything till it affects them directly and that is how these programs and institutions get power. Nothing more I would like to see is an audit of the Federal Reserve and the Gold at Fort Knox. Not holding my breath on that one.
        I want to point out that things are so screwed up that even the Powers That Be, do not have a firm grasp of what is happening. The Wiz Kids on Wall Street have created many avenues of investment that off set risks and makes it impossible to determine the soundness of financial structures they had created. People brought them because that was where the money was going. Hedge Funds, derivatives, MBS, MBO, GSE and more. Just about everybody on the planet brought into it. Then hyped it and sold again. No wonder they do not want an investigation. Let alone stricter guide lines to follow, that could benefit all nations.

    • Tom H

      So let it happen Slingshot. As long as the criminal psychopaths that run our government and banks are in power, every thing you listed will always be a threat or a reality. The only way we can get back to a constitutional form of government is to let the bigs fail and then hang them all for their crimes. Only then will we have our country back. I don’t know why so many fear the solution that returns liberty to our once great nation.

      Timmy Geetner is lying when he says if we don’t raise the debt ceiling we will default. There is plenty of revenue to service the debt. If we don’t raise the debt ceiling, choices will need to be made about which bills we do pay, but there is plenty of federal income to service the debt. With that said, why should we pay the debt? Why should we pay for debt that was created out of thin air by a private bank and loaned into existence, spent on a bunch of shit we never asked for, and the burden passed to the people while the Oligarchs stole the wealth of our nation?

      While everyone lives in fear of a fictitious situation (kind of like the war on terror), my first choice would be default. I don’t want to be a slave leading generations of slaves to pay back a bunch of fake paper bullshit.

      • Texasberry

        Tom H says:

        “Timmy Geetner is lying when he says if we don’t raise the debt ceiling we will default. There is plenty of revenue to service the debt.” -July 26, 2011 at 8:01 am

        Why would you say the Treasury Secretary is lying when he says we need to increase the debt ceiling? This is the same thing I heard Michelle Bachmann say on Bill O’reilly’s show. Where is the proof? where are your numbers?…Saying we have enough revenue is too vague. If you are going to accuse someone of lying you better bring proof. A lot of proof!

  12. Sam

    Dear Greg,

    Well, if the LSM is just barely getting it, overseas traders certainly are.

    Yesterday, when the precious metals market opened, the charts on Kitco for gold and silver went vertical before they settled back down again. More and more people in increasing numbers are not only dumping the dollar, but their own currencies, for the safe haven of gold and silver.

    Currently on eBay, you can buy a “tube” of 20 Silver Eagles (that’s one pound, two ounces of silver after factoring out the alloy), for $750. A year ago, when I bought my last tube, I paid $250.

    What does my rant on precious metals have to do with the “drama” about the budget “crisis?” The fact that BO’s drama queen act has caused more people to lose faith in the dollar, to sell dollar-denominated assets, and to invest in real money, gold and silver.

    The temper tantrum BO showed over the weekend demonstrated that the U.S. cannot get its act together, and that it’s time to switch to something safer.

    • Greg

      Sam,
      Nice reporting man! PM’s will go much higher in the years ahead. The polls want to fix a giant mess with little or no pain. That isn’t going to happen.
      Greg

      • Sam

        Gee…

        • Greg

          Sam,
          I don’t know what this means but I’ll post it.
          Greg

    • Ken

      The Republican/Democrat cheerleaders (both your average Joes and the pundits on TV) remind me of sports team fanatics. Go team go! But I am certain that, as you imply, foreign traders see through the farce.

  13. Frank Brady

    Hi Greg.

    The politicians, the Federal Reserve, the rating agencies, and the news media are all lying about the alleged danger of an imminent U.S. government default.

    If the U.S. defaults on its debts on August 2, it will because the administration made a deliberate decision to do so. The U.S. government will have plenty of money to pay its debt obligations. It just won’t have enough to pay everything else. That means it will have to do what families have to do in similar situations. Make decisions. Perhaps we will have to stop sending money to foreign governments. Maybe we will have to abolish some of the cabinet level agencies that have been created over the last few decades. Maybe we’ll have to examine the wisdom of borrowing money from countries in Asia and Europe so we can pay for the defense of countries in Asia and Europe that are perfectly capable of paying for their own defense.

    • Greg

      Frank,
      You got that right.
      Greg

  14. Charles Allen

    Hi Greg,

    This all sounds like politics as usual. Both sides are not really addressing the problem. The United States needs to significantly reduce its spending and then control it in the future.

    If everyone has noticed, the Democrats are showing their real face to the public. The one that has the TAX, TAX, TAX, the public to death hiding in the wrinkles just under their eyes. They definitely are the party for the working man!

    The Republicans are showing their concern for their BIG CORPORATE friends, as usual, but they have a possibility of “REAL CHANGE” in their plan (at least they have a plan). One that would limit future spending. Since “We The People” can’t make the necessary “REAL CHANGE” our country needs, that sounds like the right direction to me. However, our country is so divided I personally don’t think the states would be able to ratify an amendment.

    Once again Greg, you have made the situation in Washington, D. C. a little clearer for “We The People”.

    Thanks,

    Chuck

    • Greg

      Chuck,
      The one thing I left out in my piece is we did go to war under a tax cut. If the people in charge really think it is necessary to take the country to war, then we should all sacrifice. That means pay for the war through taxes. There should also be a draft. War should not be just for the people currently serving in the military at the time war breaks out. I think the only way we would go to war was if it was absolutely necessary. You are correct about taxes in general. The nation has a spending problem, and you do not fix that by giving politicians more money to spend. Thank you for your comment and support.
      Greg

      • Charles Allen

        Greg,

        I agree, but the bigger question about war is who has the authority to place our country into a state of war? The constitution is clear that congress is the branch to allow war. Once again the constitution is being abandoned and no one is even challenging our government. How much responsibility will congress give up?

        Spending is a huge problem. Responsibility in government is a huge problem. We The People are the biggest problem. While we (fiddle) listen to the main stream media and play our computer games, our country is going down in flames.

        I don’t know if it is a generational issue, where people over 55 can see what is happening and the younger generation cannot, or cares not; but we are in very serious circumstances.

        Thanks again for your enlightment.

        Chuck

        • Greg

          Chuck,
          Point well made and well taken! Thank you.
          Greg

        • Tom H

          With all due respect Chuck, it seems to me that the over 55 crowd is the crowd mainly rsponsible for facilitating this trainwreck by electing a bunch of overspending panty waists for the last 50 years that stole the wealth of our nations while they thumbed their nose at the constitution. Meanwhile, we the under 55 crowd are left to clean up the ashes and rebuild the country. Evil triumphs when good men do nothing, and your crowd was busy living well above their means all the while electing people that promised you a bunch of shit paid for by someone else. I am 42 and have been well aware that this was coming since I was in my early 30′s, because I know the government can’t continually give stuff away unless they first steal it from someone else. Your crowd should have manned up, stormed Washington, and demanded constitutional money in 1971. But, in your defense, in 1971 our attention was diverted by yet another banker created war to scare the crap out of you.

      • george

        Greg,
        I agree with you about taxes but suggest you rethink the draft. It takes time to train troops and build cohesion.

        • Greg

          George,
          If someone wants to take the country to war, then they should not only pay for it but send their children. This is the meaning of truly shared sacrifice. The only people ending up in body bags and missing limbs cannot consist of only a narrow group of citizens. We won WWII with people drafted into the military. If you did war this way, I bet there would be less of them. Good men can disagree. Thank you for your comment.
          Greg

          • Tom H

            If it is less wars you are looking for, start hanging bankers.

          • Mungo

            I agree with you most of the time Greg and I get your point about shared sacrifice. But we have plenty of capable volunteers to adequately win any war we decide to get into. That is provided we fight a war to win, which we do not do anymore. I for one would not want to share a foxhole with someone who is being forced to serve.

          • Greg

            No problem Mungo, Most folks don’t agree on every detail. Thank you for the comment and for supporting the site.
            Greg

  15. Brian

    “why oh why didn’t i take the blue pill”.
    Its an overwhelming thougt to try and prepare for this. This isn’t something a middle class family can truely prepare for. Sure we bought food and precious metal but not enough to survive the tsunami of inflation and potential double dip depression. Here is the choice. Do you take a limb off with one quick blow ( adjusting our goverment to live within its means. Or do you slowly saw through it (raise the debt ceiling again without serious cuts and eventually collapse under massive debt)
    Either way there is pain. Perhaps, if we cut now, we, the adults, can suffer for a time to benefit the next generation that is to come.

    • Greg

      Brian,
      I think the best way to address a problem is immediately and head-on. Of course that is not what’s happening in the U.S. debt ceiling talks. Thank you for the comment.
      Greg

    • Tom H

      I suppose the answer to that depends on what timeline you will except to become truly free. Every dollar is born out of debt, debt is the money of slaves. My opinion is we don’t kick the debt slavery can any further down the road.

      • Tom H

        whoops, “accept”.

  16. g.johnson

    nice job greg,

    “the u.s. borrows 42% of every dollar” not! the united states government borrows every dollar it spends. 100% with interest from the fed.
    the internal revenue system is no more a government agency that the fed. in fact irs is a branch of the fed. all you income tax dollars go directly to the fed. the government gets its operating capital from the fed collateralized with treasury bonds. these bonds are also backed by deeper collateral. that collateral is two stages of the same thing. stage one is the overall productivity of the nation. stage two is the perceived ability of the individual to be productive and be taxable.

    this is all illegal under the constitution. the u.s. government no longer works under the constraints of the constitution. constitutional law has been replaced by the uniform commercial code, which is under the umbrella of the maritime law of the crown.

    the goverment does not distribute treasury bonds abroad. the fed does, thereby creating the illusion of u.s. debt.

    as most of you are aware, the first stage collateral (national productivity) has been systematically removed from the landscape. the american people have been lead to believe that the reason that manufacturing has “left the building” is because the cost of american labor became too high. this had little to do with reality. manufacturing got out of dodge because of overly burdensome regulation and taxes and at the cajoling suggestions of multinational fed investment banks.

    long story short the greatest nation that ever existed on planet earth gas been overthrown by a handful of sociopathic, self proclaimed “elites” who actually believe that they have the right to determine who starves and who thrives, who live and who dies.

    a new new deal is coming down the pike. you are not going to like it.
    not at all.

    • Greg

      Thank you G. for the insightful comment.
      Greg

    • Tom H

      100% true! The United States Gov’t is a corporation. Mr. Johnson, are you over or under 55?

  17. brian

    I think you relly nailed it when you described golds price rally as a vote of no confidence in the masters of our dollar. Everything from silver and copper to honesty and hard labor will soon be trading at a premium leaving the paper makers and debt shufflers where they belong…..scratching their heads and wondering what the hell happened to their elaborate schemes.

    • Greg

      Thank you Brian for the comment.
      Greg

  18. Mark

    It is ridiculous to say that this is a “spending problem.” The deficit comes from both too much spending and too little tax to cover everything.

    I am not in favor of ending the Bush tax cuts all at once, but in addition to the $multi-trillion spending cuts we should phase out these tax cuts over a period of five or 10 years.

    • Greg

      Mark,
      They can and probably should cut lots of tax incentives but we are in such deep trouble that will not really help. We are quite simply in the middle of a debt implosion. Thank you for the comment.
      Greg

  19. Jan

    I wish more Americans would resign their party afficiations and send a message to our elected representatives. The one thing the special interest do not control is our votes. Yes, we only have D’s & R’s to vote for, but don’t let them count on your vote via a party affilication. They need to work for our votes and honestly, is there a difference these days? The D’s work for the unions and the R’s work for big business. No one works for the people.

    • Greg

      Thank you Jan and Rob.
      Greg

    • Tom H

      Both D’s and R’s work for the bankers. The rest is an illusion meant to control you.

      • TED

        You basically summarized my entire post (below) in one sentence!

  20. Rob

    Hi Greg!

    Yes this birthing from the matrix we are now living looks set to come in September/October. The economic events will proceed and could possibly be like a switch thrown in August to set in motion the covenant I mentioned in an earlier post. The speed at which default accelerates will be maddening but it is only the beginning. Much worse is to come over the next 7 years and the 8th will bring worldwide destruction. At that time the cartel and their cohorts will throw their gold and silver into the streets knowing that it will not save them. For a better understanding of these spiritual events please check out our web site: http://www.unleavenedbreadministries.org

    In CHRIST! Rob

  21. Gil

    Greg, I’ve been reading your stuff since you started down this road and I would like to say thank you for all that you do. Cheers!

    • Greg

      Thank you Gil
      Greg

  22. czzi

    Greg,
    You are a right winger w/o a doubt. The Republican-tea party is at fault. A small minority of the repub party is going to flame this country. How funny all of these so called fiscal conservatives are NOW worried about raising the debt ceiling, when a majority voted several times under g w bush to raise it w/o a thought, approved massive tax decrease for the wealthy, massive military spending (I noticed that you did not report that this same tea party just passed a defense bill of massive proportions, actually increasing the budget for that!)Yet no comments? This will lead us to nowhere very fast. You conservatives should shut up and take the blame that you deserve!

    • Greg

      CZZI,
      I am of neither party and hve said many times on this post that BOTH parties are to blame for the position we now find ourselves in. I also said in the current post (“Running Out of Runway”) that neither party is talking about the ongoing banker bailouts or cutting military spending. Your accusation, “You are a right winger w/o a doubt. ” is unfounded. I can back that statement up with multiple examples on this site. I post ideas from all sides of the issue. Thank you for your comment.
      Greg

    • slingshot

      Hello CZZI,
      It all began with the Great Society of Lyndon Johnson. How much did this family have in ARMS Manufacture? Who escalated the War in Vietnam. Tolken Gulf ring a bell? Over 58,000 killed in that baby. How many wars are we in now? If your son was in one of those wars would you like the support pulled out from under him? Who let fall into Chinese hands the most complex nuclear warhead blueprints , Clinton. Who bows before others in the world? Our President no less. Let us not bring up our most famous President, Jimmy Carter. What were the interest rates then? Plenty of blame to go around.
      Well I am a conservative and I am not going to shut up! I take the blame when it is due.
      You will find that it way beyond democrat/republican, liberal/conservative. Follow the money.

      • Tom H

        It all began much earlier than that. The great society programs were a major step though. What a government subsidizes it gets more of and what it taxes it gets less of. The powers that be knew this universal law when they passed the Great Society programs, yet they decided anyway to subsidize poverty and tax the middle class to pay for it. Now, 5 decades later, poverty is rampant and the middle class has disappeared. Who’d a’ thunk?

      • czzi

        Sir,

        I am a disabled vet and mys son and daughter in law are serving att.

    • Frank Brady

      czzi, perhaps this quotation will help put things into perspective for you.

      “The fact that we’re here today to debate raising America’s debt limit is a sign — is a sign of leadership failure. Leadership means the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.” Senator Barack Obama, 2006.

      It was criminally stupid to raise the debt limit under Republicans and it remains criminally stupid to do so today.

      Frank

      • czzi

        Hokey stuff there my man! They all say that when they know something is going to pass anyway (OH that was another GWB increase!). You conservatives are going to feel the economic depression as much as the rest of us. AND what makes U think I support Obama? I do not did not and will not support any major party candidate.

  23. Roderick

    My garden grows carrots. They take 4 months of hard work to grow. I can sell them for $2.50 a bunch now. Its a slap in the face to any market farmer. Why?

    Because in my world money does not grow on trees.

    The Federal Reserve and the policital arena keeps this charade going. We work harder for less! The elderly have no dignity now and it will get worse as they become completly dependant on the system. The system will continue to screw them.

    I wait for the day my carrots are auctioned up in price until the day and i am offered hundreds of dollars for one bunch of them. That day justice will be served for my toils. Those parasites who derailed the true economy will not be able to trade their paper dollars for my garden produce. I can and I will call the shots then. My labour will be seen as valuable.

    I am the producer. On that dsy production will be seen for what it is. Production is real wealth. That day parasites will be the ones who suffer.

    My garden is just a way to explain real economics and the market place. Like Sly Stone sang in “stand” giants are about to fall and beside him a midget stands tall”.

  24. John

    Anyone that is looking…even remotely….can see that, as a country, we have steadily moving to the precipice of calamity for some time now. I fought and served for this country and it is sad to realize that we are almost beyond repair. The momentum of corruption and self-interest is so large amongst our public officials and representatives that it is hard to identify any group capable of turning us around before falling off the edge. In some respects, we have the most part already fallen off it….but I still like to have a bit of hope.

    I am only hoping that with each passing day more people are waking up the realities of the looming collapse and are starting to prepare in any way they can…..food, protection, and hard money. As a country, we may need to let the disease continue to spread and amputate our leg before sepsis kills us. There are no scenarios that exist which do not include a major hit to our standard of living. The years ahead will only get harder and your friends, neighbors, and family along with what preparations you make today and tomorrow will make the difference.

    This debt crisis is one of many events which have and are leading us to some form of a Socialistic Dictatorship….remember, they don’t want to waste a good crisis. Wake up! :-}

  25. Denarius

    -
    Norm Ezzie says:
    July 25, 2011 at 9:23 am
    “When the dollar dies and what will replace it?”
    Set your search engine to find “fractional silver” for the answer.

    My favorite quote from The Ahnold, fmr Calif gov.
    “We have got to learn to stop spending money we don’t have.”

    My favorite solution to all budget-busting problems is to
    ———-> Spend Like a Drunken Sailor STOPS SPENDING STOP DIGGING <————–
    -

  26. Denarius

    ???????????????
    My favorite solution to all budget-busting problems is to
    ———-> Spend Like a Drunken Sailor STOPS SPENDING STOP DIGGING <————–

  27. nm

    Greg:

    The friend I described works for a software company, not a bank and they did not get any bailouts. They just produced a piece of software that was in high demand and as a result, were able to sell the company for a profit. My basic point here is that there is still some industry and production taking place and if you produce, you can sell (to others in the world, not just Americans).

    People still have to eat, they still have to drive their cars and dress up and basically survive and someone is producing all these things they need to survive. Government is almost irrelevant and that’s how people in third world countries survive — inspite of the government, not because of it. Americans will soon learn this lesson.

    • Greg

      NM,
      Thank you for the comment. Do you think your friend would have sold his or her company if all the hedge funds would have gone under? In some way, I’ll bet your friend got a piece of the bailout. That said, you do make a very good point. Thank you for making it here.
      Greg

  28. M SMITH

    Greg, another great article to start the week off on. This was put out Friday at goldseek.com; Profitably Playing Manipulation, http://news.goldseek.com/GoldSeek.com/13111346800.php, the real stats that we should take as truth is gov CPI 3.565 v true CPI 11.13% JUNE 2011. US unemployment 9.2% v true 22.7% July 2011. US GDP 2.33% v -2.60% June,24,2011. US M3 unreported by Gov v 2.29% June,2011.

    Ran across this video on silver manipulation many might want to view. http://silvergoldsilver.blogspot.com/2011/07/blatant-slv-options-manipulation-caught.html. You know it’s pretty bad when bloggers tell the truth of what’s going on in the markets while the MSM seems clueless on how to tell right from wrong. As Timmy went on all the talk shows on Sunday I keep asking the same question to all the MSM’s talking heads but they never pose the question I beg them to ask, please Timmy explain how the ESF works & were is main operations located? How did it get it’s 1st 2 billion dollars in 1934? I will not hold my breath on any answers from the MSM or my Representatives I have wrote many times. It seems they are embarrassed to answer what the actions & results of SEVENTY-THIRD CONGRESS S.2366 GOLD RESERVE ACT OF 1934. When the gov devalued the dollar congress had a 2 billion windfall & it was gave to the Treasury to fund the ESF. After many searches of US Congress archives the Gold Reserve Act has been brought up many times to only die a quick death. If the intentions of the bill was to protect the dollar it has failed big time, would you not agree?

    A default will not happen, the only way we would default if Obama or Geithner lets it happen! Do you think Obama would put his butt on the chopping block, no way, his hunger for power is over the top and the facts of union, bankers and corporations have Obama in their pockets should reassure the progressives. The only people not getting hurt are the super rich & political connected, the rest are own their own! BY the time this is over, we will need higher boots to muddle through the crap put out by the MSM, congress & White House!

    • Greg

      Thank you M. Smith for the comment and content.
      Greg

  29. p. wydler

    just the other day, we received a bulletin from the local bank (zürich kantonal, CH). briefly it stated that the bank is moving out of € investments and recommends its clients do the same. it also stated that it recommends its clients to overweight in gold. we’ve been in this game for 15 years now. i’ve never heard them recommend gold investments before.

    • Greg

      P. Wydler,
      Is this a German bank you are talking about? This is very interesting, thank you for posting it here.
      Greg

      • p. wydler

        no, this is a swiss bank. –zürich kantonal bank (kanton = state)

        +

        one sees many more posters in front of jewelry shops, even on the Bahnhof str., (high rent district ala 5th ave, michigan blvd) offering to buy ‘old gold’. i’m waiting for the same posters to start advertising to buy silver. although gold is more of a favorite here than silver.

        • Greg

          P. Wydler,
          A few months ago a few stores started advertising “buy silver” in my town in the U.S. Thank you for the info on the bank!!
          Greg

  30. Hugh

    Remember what Rahm Emanuel said, ‘Dont let a good crisis go to waste’ . The ‘crisis’ *cough-cough* that dc (along w/ their msm cohorts) is trying to create (in the sheeples’ minds) will be cover for the dc gangsters to somehow expand their control/powers with the last-minute ‘deal’ they will rush through right before the mythical ‘deadline’ … for example something like this ‘Super Congress’ bs I’ve been hearing about. We probably won’t even find out what they’ve snuck through for weeks after the ‘deadline’. By then most sheeple will have erased the whole debt-ceiling-crisis thing from their minds and will be focused on more important things like the new season of The Bachelor or Real Housewives.

    • Greg

      Hugh,
      Please post with another last name. You know what I am talking about. Thank you for your comment.
      Greg

    • TED

      I think that the expansion of power that you (Hugh) speak of is the “super committee”.

  31. nm

    Greg:

    They did get millions in VC money to start so you could be right — The VC money may be linked to hedge funds, which are linked to banks and it’s all connected.

    Why do you think he got a piece of the bailout? just curious…

    • Greg

      NM,
      Thank you NM.
      Greg

  32. TED

    It bothers me that so many of you who are enlightened enough to read this site still believe the Democrats vs. Republicans, liberal vs. conservative NONSENSE. There is no difference between the 2 parties! It’s all a big charade. They are just playing a huge game of ping pong out front to distract the people while they (both Democrats AND Republicans) are making dirty deals in the back room.
    We’ve seen this (phony) party bickering many times and this time is no different. All the decisions have already been made by the global elites and world banks! There is virtually no chance that the debt ceiling will not be raised. (The only possibility that I can think of is if the elites have decided that the time has come to crash the dollar in order to implement a new currency such as the “Amero” or some other multi-country currency.)

    Here’s how I think this so called “crisis” will play out. On or around August the 3rd we will see leaders from both parties on TV telling us how late they stayed up and how hard they worked to hammer out the agreement that was voted in just before the midnight deadline. They will brag about how they saved us all from the crisis. Each side will talk about how they had to make the hard choices in order to get the other side to compromise. They will assure us that they made the best possible deal in order to save the country from certain disaster. Then in a few days after the smoke has cleared and most of the American public has forgotten that there was a crisis we will find out what really happened on alternative news sites like this one. We will see that they passed a HUGE piece of legislation (probably 2000 pages or more) that not only raised the debt ceiling, but also gave a lot of money away to the friends of the politicians. In the “fine print” we will see the part that applies to the average citizens like us. It will contain measures to extort our money, reduce any services or benefits we might be entitled to receive, and of course to further erode our constitutional rights. (Expect a few draconian measures to be hidden away amongst the pages.) It will be painfully obvious that congress did not hammer out this 2000+ page “agreement” in the wee hours of August 2nd. It will be obvious that it took months to create the hundreds of pages of legislation and that the crisis was simply a bunch of hype used to further divide citizens along (phony) party lines. Unfortunately by this time most of the American public will be mesmerized watching the ball go back and forth in the next game of congressional ping pong (or perhaps watching the latest “reality” TV show).

    • Greg

      Ted,
      I hope you are correct but I see no deal until after Aug 2nd and the stuff hits the fan. Thank you. By the way the Democrats and Republicans are just one ugly body with 2 heads.
      Greg

  33. Will

    I’m sure others caught the words in Boehner’s reply to the President. He said that the two step plan would “delay the default” and could set up a congressional committee to address the cuts. Was this a slip of the tongue? Isn’t that the whole point to “delay the default” until they can’t?

    • Greg

      Will,
      Good point man!
      Greg

  34. M SMITH

    The two speeches last night were more smoke and mirrors, Obama was selling his re-election, asking his base to attack the Republics. The other speech was adding more debt any way you look at it. Neither had a solution to stop the flow of money from the pockets of tax payers to the IRS(FED) & Treasury’s(ESF). The central banks & their front banks(JPM)are squeezing every last penny from the European nations as fast they can as they move on the U.S. to wipe them clean. nothing really changed except we know where both parties stand, they do know a damn thing about economics or running a business & the ones that do are pushed aside by the old guard.

    Reading back to the actions of all the congresses back to 1934, many times members of congress brought a bill to the floor to admend the Reserve Gold Act of 1934 & it was shot down time after time. In one of the nations pristine papers(NYT) in the political sections is was pointed out that many train loads of Gold had be shipped to Fort Knox under complete secrecy out of the NY Feds many vaults located in NYC & other locations across the USA. In the reports it was said the amount of was huge but it never said where it really came from? The time lines vary, some before & after WWII, the way it was written, it made the impression the US held 2/3s of the world gold. The papers really were the mouth piece of the Fed & Treasury to push their propaganda machine. Soon after that many other such stories were printed, always saying Fort Know was so full of gold, it would take weeks to count & assay it. Now that Ron Paul has asked for a full audit of all the gold the US holds, many keep putting up road blocks & excuses to keep the people from knowing the truth. The most lame excuse is it will cost so much at time when the nation is broke, well heck, if they took the money the EPA or any other agency wastes in a week, it would more than pay for a full audit of Fort Know & every vault the Treasury & Fed claims it holds gold in! Then we would know how much was used to send to the open markets to suppress the price of gold all these years. Now that the dollar & other fiat currencies are on death spiral, holding large amounts of cash would be a windfall for the gov if they fail to keep the dollar on the top as the worlds reserve currency, a reset would take place & as a unit, a $100 bill would be traded for a single unit that = $1. That is 99% lost to the holder of cash & a gain of 99% for the Fed & treasury, right? Kingworldnews.com is going to post a interview of Marc Faber today, it’s worth your time as he explains the many different ways the gov will react to reap another massive windfall just as they did when FDR de-valued the dollar & congress amassed a 2 billion windfall that went to the newly created ESF & the people got the shaft. Could this be in the works now? These people are desperate & that’s when they are the most dangerous to the public & any wealth you have left. Also zerohedge.com has some great comments on this subject. Just another day in uncertain times we all live in!

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