Default or No Default, Deal or No Deal

By Greg Hunters

I have been telling you for the past few days that I am not so sure Congress and the White House will get a debt ceiling deal done to avoid default on August 2nd.  The grand plan was to raise the debt ceiling around  $2.5 trillion to allow the U.S. to borrow money and pay all of its bills.  Just this week I said, given the polarization between Democrats and Republicans in the House of Representatives,  a debt deal is not going to be easy, if they can do one at all.  I think eventually there will be a debt deal, but not until after August 2nd and not until things turn really sour in the economy.

I am talking about a spike in interest rates, inflation and unemployment, and that’s just for starters.  Senator Ted Kaufman from Delaware gives the “no deal” scenario a 60% chance.  I think its higher than that, and maybe the Fed does too.  Now, we find out the Federal Reserve has been quietly working with the Treasury Department for the past few months to come up with a plan of action if the debt ceiling is NOT raised.

The headline in a story yesterday said it all: “Fed Prepares for Doomsday as Debt Deadline Nears.”  The story went on to say, “The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government’s $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday.  Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world’s biggest economy runs out of cash on August 2.  “We are in contingency planning mode,” Plosser told Reuters in an interview at the regional central bank’s headquarters in Philadelphia. “We are all engaged. … It’s a very active process.”  Plosser said his “gut feeling” was that President Barack Obama and Congress will come to an agreement to increase the Treasury’s borrowing authority in time to avert a default on government obligations.”  (Click here to read the complete News Max story.)

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  1. Mitch Bupp

    After the news I just saw on about the FED and that they lent $16 trillion in lend from 2007-2010! This will undoubt push the American taxpayer into outrage mode! This is just nuts ….. the bankster cartel does control the money and the USA ….. not the people or government ……

    give them 30% or nothing and call in all bonds …….while abolishing the FED!

    • Greg

      Thank you Mitch for your participation in this site.

  2. g.johnson

    i like the way mitch thinks. i am a bit more inclined to the “nothing” part of his equation however. if i was potus, the u.s. marshal service would have already raided the fed, locked up bernanke, paulson etc., and sealed the building and all records for a good combing.

    and that’s just for openers. deep and thorough investigations on corruption in the state department, justice department, both houses of congress, the aba, ama, main stream media and the two major political parties. criminal charges would ensue.

    prior to all of this, heads of state of all countries plagued by the red shield fed would be put on notice to take similar actions or risk all out war.

    if this sounds radical to you, then perhaps you do not understand the severity, depth and breadth of the very present tense situation that we find ourselves in today.

    three of our presidents have died and one miraculously escaped death for trying to insittute similar plans. do we the people really need such a sword of damocles hanging over our heads?

    • Greg

      Thank you G. Johnson for all your comments on the site.

  3. Wayne

    As the old saying goes ‘there’s more reality in professional wrestling than there is in politics’ and that seems to be the case once again. We’re supposed to believe that they same set of characters that’ve been spending us into oblivion over the past 2-3 decades are now so wrapped up in their ‘concern for the budget process’ that they can’t find common ground to end this (alleged) impasse? How stupid do they think we are?….uh, I think we know the answer to that.

    The question remains…..what’s the REAL reason for this little kabuki dance between both parties? Are our Communist Chinese creditors putting pressure on for a debt for equity swap? Is it to spook the markets so that the sheeple start bailing out of their 401K’s, etc? Inquiring minds would like to know.

    • Greg

      Thank you for making us all think out of the box!

  4. cossack55

    Since many want to go after the Fed’s multiple sets of books, we batter take more than a peek inside Ft. Knox. The politicians are slaves to the banks and the taxpayers are slaves to the politicians. Status quo, baby. Welcome to hell, glad you finally are waking up.

    • Greg

      The sooner the better.

  5. Frank Brady

    Is it not obvious that the people who will benefit from default are the people to whom the resulting higher interest rates will have to be paid?

  6. Geo

    What is obvious is that “deal or no deal”, unless major changes in the way we do things i.e. debt and having a group of private banks hold our “money bags”, we are headed for a financial melt down. I don’t envision either of those things happening. That being the case … if you don’t own precious metals, you will be screwed big time.

    • Greg

      Wise words my friend! Thank you.

  7. Rider I

    How Communist China Economic Espionage Units the MSS use proxy agents. Then after the economy is destroyed invade via WTO treaty breaking SOE’s to create Free Trade Zones to colonize.

    How the Communist Chinese Party and their espionage unit fund terrorist and genocidal dictators that oppress world women’s rights.

    Over four years ago, America suffered the worst terrorist attack in its history, caused by a terrorist group largely known as al Qaeda. About a month after the attack, it was first reported that Communist China bought unexploded American cruise missiles from al Qaeda in order to “reverse engineer” them, i.e., use them to advance its own cruise missile capabilities. That report was just confirmed on Nov. 29. The subsequent silence from mainstream media has been deafening. What gives here? For over four years, as the democratic world has fought the War on Terror, Communist China has managed to stay out of sight and out of mind, despite the information above and immediately below. Even the pro-democracy, anti-Communist movement has largely been quiet on this. This remains a terrible and dangerous mistake. For those new to this topic, what follows is a quick synopsis of Communist China’s actions regarding al Qaeda and the Taliban. 1998: After the American cruise missile attack on al Qaeda, Communist China pays up to $10 million to al Qaeda for unexploded American cruise missiles. 1999: A book by two Communist Chinese colonels presents a battle scenario in which the World Trade Center is attacked. The authors recommend Osama bin Laden by name as someone with the ability to orchestrate the attack. September 11, 2001 (yes, that date is correct): Communist China signs a pact on economic cooperation with the Taliban. Just after September 11, 2001: The Communist press agency makes a video “glorifying the strikes as a humbling blow against an arrogant nation.” Also after September 11, 2001: According to Willy Lam (CNN), the Communist leadership considers al Qaeda to be “a check on U.S. power,” and only decides to back away from it after deciding that “now is not the time to take on the United States.” Also after September 11, 2001: As Pakistan mulls a request from the United States to allow its troops to be based there for operations against the Taliban, Communist China—a 50-year Pakistan ally—announces it would “oppose allowing foreign troops in Pakistan.” Also after September 11, 2001: U.S. intelligence finds the Communist Chinese military’s favorite technology firm—Huawei Technologies—building a telephone network in Kabul, the Afghan capital. November 2001: As U.S. Special Forces and local anti-Taliban Afghans are liberating Afghanistan, Communist China, through public statements and behind-the-scenes actions, tries to prevent what it calls “a pro-American regime” in Kabul. 2002: Raids of al Qaeda hideouts by U.S. Special Forces and allies net large caches of weapons from Communist China, including surface-to-air missiles. This comes weeks after the U.S. government warns that al Qaeda terrorists in the U.S. would try to use said missiles to take down American planes. April 2002: Then-Communist Chinese leader Jiang Zemin, while visiting Iran, rips the U.S. military presence in Central Asia. Late summer 2002: Almost a year after Afghanistan’s liberation, a three-man delegation from the Taliban—led by Ustad Khalil, purported to be Mullah Omar’s right-hand man—spends a week in Communist China meeting with cadres, at their invitation. August 2002: Intelligence from the post-Taliban Afghan government reveals that Communist China has turned a part of Pakistan deemed under its control (most likely “Aksai Chin,” the piece of disputed Kashmir that Pakistan gave to its longtime ally in the 1960s) into a safe haven for al Qaeda. May 2004: Media reports expose how the Communist Chinese intelligence service used some of its front companies in financial markets around the world to help al Qaeda raise and launder money for its operations. Yet Communist China continues to claim that it is our friend in the War on Terror, and foolish supporters of “engagement” continue to believe it. Nothing could be further from the truth. It’s not merely al Qaeda that has received Communist support (for more on Communist China’s extensive ties to terrorists, check out my book on the subject), but given the nearly universal acceptance of al Qaeda as an enemy of the democratic world, one would think that the above information would be enough for a serious and thorough reexamination of our relations with the Communists. After all, Communist China’s reasons for supporting anti-American terrorists are not difficult to ascertain. The U.S. is the main obstacle to the Communists’ plans for conquering Taiwan, replacing Japan as the lead power in Asia, and replacing the U.S. as the lead world power. If Communist China fails in any of these, its reliance on radical nationalism—the regime’s raison d’etre since the Tiananmen Square massacre—will backfire badly. Thus, the Chinese Communist Party sees the United States as the chief threat to its power, and its survival. Yet President Bush has not once demanded that Communist China end its support for al Qaeda—indeed, he has not even acknowledged the existence of that support. Sadly, he is not alone. In fact, those of us who insist on spreading the word about this are in the distinct minority. If we are to win the War on Terror, this must change. The War on Terror is, in fact, part of the Second Cold War—the cold war between Communist China and the democratic world. As such, the War on Terror can not and will not be won unless the free world sees the Chinese Communist Party for what it really is: an enemy. The road to victory in the War on Terror ends not in Kabul, Baghdad, Tehran, or Damascus, but in Beijing. America and her allies will never be secure until China is free. D.J. McGuire is President and Co-Founder of the China e-Lobby, and the author of Dragon in the Dark: How and Why Communist China Helps Our Enemies in the War on Terror.

    Rider I

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