European Debt Crisis: DeathficitsBy Greg Hunter’s 

I was a guest on the nationwide radio show Coast to Coast Am last week, and a listener commented that, at one point, “it sounded like” I said “death-ficits” when talking about the European debt crisis.  The commenter chalked it up to a possible “Freudian slip?”  Maybe it was, but it is certainly a good way to describe what is going on today in Europe and in the U.S. as well.  Just about every financial problem the world is facing right now has something to do with too much debt.  It seems everyone is running huge budget deficits.  There is too much mortgage debt, too much local debt, too much state debt and too much national debt in just about every country on the planet.  The debt is so large in many countries in Europe a sovereign default in just one of them could cause another financial meltdown, bigger than what the world experienced in 2008.

The “death-ficits” term sums up the dire situation pretty well, and I think renowned economist Martin Armstrong would agree.  In a post last week, Armstrong said, “The Eurozone is severely destabilizing the global debt situation as Italy is now the world’s third largest bond issuer and one of the original six founders of the modern European project that created the Euro. . . . in the end game, the bankers exist based upon the confidence of the people in their sound management of their deposits. Bankers are finding it increasingly difficult to maintain that CONFIDENCE after the Greek haircut and now Italy is the THIRD LARGEST debt in the world that is TOO BIG to be bailed out even at a 50% off sale.” (Click here to read the complete Armstrong post.)  Armstrong is predicting money will leave European banks and the Eurozone.  I don’t see any way the world can avoid another crash and credit freeze.  I hope I am wrong.

But, not everyone sees the dark clouds I see.  In a Wall Street Journal poll last week, most economists were downright optimistic.  The WSJ story said, “The 52 economists surveyed in November . . . put 1-in-4 odds that the U.S. will experience a recession in the next 12 months, down from a 1-in-3 chance they were seeing just two months ago, when concerns were at their highest level since the recent recession ended in June 2009.  The economy has shown resilience since the summer, with numbers on consumer spending. . .”  (Click here to read the complete WSJ story.)  

I wonder what data these economists are looking at.  According to the latest data from, foreclosures hit a new 7 month high.   The report last week said, “The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” said James Saccacio, chief executive officer of RealtyTrac.”  (Click here for the complete report from  Another recent report says, “10 .4 million families are sliding towards failure and foreclosure.”  Still another says, “Half of US Mortgages Are Effectively Underwater.”  A record number of Americans (45.8 million) are on food stamps.  The true unemployment is 22.9%, if it were calculated the way BLS did it in 1994 or earlier.  The odds are “1 in 4 that the U.S. will experience a recession in the next 12 months.”  Really?  It looks to me that many Americans are experiencing a depression right now with no end in sight.

Tax receipts are plunging while government spending is soaring, and that is causing the U.S. annual deficit to explode.  According to the government, the 2011 budget deficit came in at nearly $1.3 trillion, but the true deficit, according to economist John Williams of, was much higher.  In his latest report, Williams says, “. . . the 2011 GAAP-based U.S. deficit likely fell in the $5-trillion to $7-trillion range, a circumstance that is beyond control and appears to be uncontainable in the current political circumstance.  With the economy in ongoing crisis, with no prospect of a turnaround in the foreseeable future, the implications for the federal budget deficit, U.S. Treasury funding needs and prospective banking-system stability, in the year and years ahead, are horrendous.  The current, relatively happy forecasts for each of those areas are based on assumptions of solid economic growth going forward.  That growth simply will not be forthcoming.”

 If you think the European debt crisis is a bigger problem than the U.S. has, then think again.  Williams goes on to say, “The sovereign solvency crisis in the United States easily could move to the center of global financial-market attention in the weeks ahead, depending on how the federal deficit reduction negotiations evolve.   The systemic solvency crisis that continues to unfold in the U.S. is of a relative magnitude that eclipses the rolling financial crises in the euro area.”  (Click here to go to the home page.)

The European sovereign debt crisis will probably be the one that blows first.  Who knows how much central banks will print to try to stop the fall, but when this finally blows up, one will surely take down the other.  Then, we will see if the “death-ficits” term really sticks.

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  1. Herman Gerbils

    Well, now that the Trilateral Commission’s “economic hitmen” have taken over Greece and Italy everything will be just dandy (yes I’m being facetious). And to answer a question you had on Coast to Coast Greg, the reason the Fed bails out Chase Bank is that they are owned by the same people, and Goldman gets bailouts because they are in cahoots with the same factions.

    • sky

      type in professor murray sabrine admits Ron Paul is silenced by the media because video

  2. Brad


    I think you’re spot on with your observations.  I spend a lot of time
    looking at the pieces and looking for patterns.  In logic, you remove the impossible, and, ultimately, one is left with the answer.  You spoke about gaming and putting all options on a table.  One comes up with a lot of options.  A lot also gets thrown in the trash. 

    One might ask why is the Iran agenda getting pushed regardless of how
    reckless it might be?  I am reminded about what Lindsey W. said about
    $150-$200 oil.  You can definitely make people beg for with that price level.  If that is a sub-goal along the road, how does one achieve that price, among
    other goals, all in one blow?  You said it the other night.  The strait.  We
    also know that Iran is a wild card that doesn’t want to play ball.  Well, so
    is N. Korea.  What’s the difference?  I think it’s like in real estate.
    Location, location, location. 

    The other question is why do we keep threatening, then all goes quite,
    threatening again, then all goes quite?  Why risk tipping off the opposing team, especially when surprise is a great advantage?  There are numerous
    outcomes to this strategy, but it may very well be the public is being
    slowly acclimated to the fact that we may have to go to war with Iran.  It’s
    also a chance to test the public opinion waters each time and garner
    feedback, as well as, to induce Iran into believing it’s all a bluff so they
    are not prepared.  This is all conjecture and me thinking out loud, but this is the same strategy governments use.  Many of the strategies are
    multi-pronged as well. 

    I realize that a $200 oil price level is not lost on you.  There are too
    many ramifications to list in that kind of scenario.  What happens when it
    cost more to get to work during a week than one makes?  It becomes a basic
    cost/benefit then.  This whole situation is a lot like the emperor with no
    clothes.  Even though individuals can often see what is taking place, no one wants to say anything publicly. I feel the 800lb gorilla is not only in the room, he is moving towards us at
    60 mph.

  3. Samantha in Tucson

    I believe John Williams’ data; he’s a smart guy and isn’t reporting the “smoke and mirrors” line that the MSM pundits do each and every day.

    I am very discouraged by Obama’s speech to China. He thinks that trading with the Chinese is GOOD for the U.S. economy! What a back-stabber he has become to the middle class who help get him elected to office!

    It is ironic that during the McCarthy-era, we were concerned about Communism and Communists in our country…we even executed people who we suspected were Communist sympathizers (i.e. Rosenbergs), but we now have no compunction in trading and selling our souls down the river to Communist manufacturing! My how times have changed.

    If we trade our products in other countries, we have to pay tariffs. Why is it then that China doesn’t pay tariffs (or very little) to bring products into our country? Can anyone logically explain that to me? I know lobbyists have a lot to do with it; I understand that part, but why are our elected representatives not saying more about this issue? Is everyone in government bought and sold?

    • Art Barnes

      Answer in short of “is everyone in government bought and sold” is yes, in one way or the other. The American people have lost control of its leaders who now represent the corporation(s) first and foremost, sad but true. I enjoyed your statements on China. Art

    • Sean S


      It all boils down to the complex web of multi-lateral and bilateral international trade in goods and services agreements the US and other countries have entered into Samantha and how these agreements are structured. These trade agreements not only regulate what you can do but also what you cannot do.

      People often assume that all these agreements are based on balance of benefits, balance of realizable opportunity and reciprocity but they are not. If you studied some of these agreements and understood how they operated you would be appalled.

      You cannot apply logic to this business because it is frequently lacking entirely.

    • Rick

      I would say the main reason the government promotes trade with China is because people want cheap toasters (or widget as they say).

      This is and always will be human nature to get a deal and the fact you don’t pay $200.00 for a toaster or $5000.00 for an LCD big screen is something nobody thinks of. How are these items so cheap you should ask and at what actual cost do you get them.

      If you buy American or Canadian products you have to pay more because the wage and benefit package and of course high taxes hava to be reflected in the price of these products(profit has to be made)or they go out of business.

      So to answer your question, you traded jobs for cheap toaster’s.
      How do you think the economy kept rolling along with such a huge trade Deficit ?
      Print, print , print….
      The game goes on until all the seats( good jobs)have been given away and it hits the wall.
      IE: all the good job traded for cheap products to make the comsumer happy and you keep voting for the great Elected Officals who give you what you want. Well what they tell you you want.
      Great, until it is your job traded away for votes.

  4. George

    Can someone explain how a change of government in Greece or Italy is anything other than a propaganda ploy? When I look at the basic math of the Greek, Italian, French, or even the USA economies including budgets and national debts it seems to me that changing the pilot of the Titanic after it hits the seabed will have little impact.
    Congress fiddles while the country is burning from unemployment, inflation, and moral decay. Perhaps, our leaders could have slowed the pending economic collapse from slamming into America like the asteroid that cratered the Yucatan by taking realistic measures but that would have required that we had statesmen instead of politicians.
    If the Federal Reserve bails out the Eurozone, the US is doomed. There is only some much value in the dollar and the amount of money to stabilize the Eurozone is so large and subject to immediate destruction due to losses on impossible Sovereign debt, the resulting devaluation would hasten our fall.

    • Greg

      I cannot..

    • therooster

      Nor can I. This does nothing to change the structure. Structure is the guiding principle in regards to how power flows. You cannot pour new wine into old wineskins.

  5. Duke

    is it my imagination or does it seem like the global collapse/crisis process is accelerating? endgame approacheth

  6. Hoppe

    It is going to take a long time to unwind this debt. The problem with most prognosticators is their time horizon and their yardstick. Most everyone wants to compare housing prices and buying patterns with those of the 80’s through 2007. The period of easy cheap money supply, caused a boom that an entire generation and half thinks is normal. It was an aberration. We need to look farther back to the 50’s-70’s for a better indication of spending patterns.

    Meanwhile government and central planning continues to grow, at great cost. Regulation and laws are being enacted that make off tax roll use of PM’s more and more difficult.

    Short story- Americans and most western nations are going to be paying the down debts they and their fathers racked up for a long time, while struggling to get by month to month.

    Think Europe of the 1950’s.

  7. Matslinger

    The secret that most miss is this…

    All of that debt, or the majority of it, is in advanced forward liability accounts. In other words, government loans its own money to itself, and then bonds the payments to taxpayers, gets dividends off of the interest it pays itself, and still owns the money at the end of the debt + whatever investments or real estate it bought with the original loan/bond. That’s the scam…

    When you hear that China holds American Treasuries and debt, the truth is that the corporations and financial institutions that hold that debt are actually American corporations. So China doesn’t hold anything really. America built up China and has well over 14 trillion in investments in all of that infrastructure over there. China is a big lie. America could sell all of its stock in the oil, electric, phone, banking, etc. of China and completely send that Chinese economy to the bottom of the ocean.

    The art of borrowing from money you already have is the basis of how government runs.

    And just because Coca-Cola America looses 2 billion (on purpose) in the American markets (on purpose to show a loss), Coca-Cola Kenya might at the same time make 3 billion in the other markets (on purpose). Same with government…

    It’s a rigged game. And in all reality, there is no such thing as debt. It can be written off at any time by law.

    So don’t hold your breath for a crash. A crash simply means that the corporations and government holding the other side of the trades as the stock market tanks are making trillions and trillions in profits. 9/11 was one example of this, 2008 another.

    There is no crash.

    But as long as we think there can be and will be, we do nothing waiting for it. And the control structure gets bigger and more inescapable.

  8. Art Barnes

    Well Greg, of course your right, but why does Wall Street rally on along with almost $100 oil. If you look at Friday’s close the Dow is just now down about 20 per cent from its high prior to the crash, this cannot be just coincidence because the economic engine is simply not strong enough to support such numbers even without a debt crisis here and overseas. The elite along with the Fed well understand the psychological significance of keeping the market artificial high, not just to place more money in the hands of the elite but to hood wink the american people that there is no recession and or depression. For the last 75 years, or after the crash of 29, the MSM equated depression with stock market prices and this fallacy has lasted to this date. Therefore, if the market can be kept artificially high with Fed policy, etc., the MSM will report a chicken in every pot each time it reports on the economy. The Fed knows it, the elite know it, and the MSM knows the people believe that their future is the market. That is why when more jobs are lost, bigger deficits are created, slower GDP and the like continue to march steadily higher no reporting of depression is indicated by the MSM. Each time the economic “numbers” lose ground the Fed props it up with “easing”, buying toxic assets, etc., and the MSM continues along singing everything is beautiful because they know the american people only believe we are in a depression and or a deep recession if the stock market is depressed or has crashed. We will have to wait until enough of your neighbors has lost their job before they see the reality. The markets in my mind have lost credibility in being able to be a standard of the overall economy, its simply to controlled. However, in time, it must correct as unemployment, inflation, oil and other commodities will insist it pay attention to reality here on the ground. At that point in time, the over bloated market will take a dump and the MSM will have to report the true economic condition of our country irrespective of sovereign debt.

    • Oldguy

      Very good statements Art. One should remember that the stock market prices are a reflection of corporate member profits, and not of the economy. It is a great propaganda machine so long as the general populace believes as they presently do, and continue to ignore all other facts. Great post Art…

  9. Alessandro Machi

    This is what happens when the U.S. abdicates control over home mortgages to wall street, and instead prints up fake money to go to war.

    There are two kinds of debts, debts with interest rates attached, and debts with no interest rates attached. In my opinion the key is to no longer call debt restructures defaults as long as the principle is going to be paid back.

    • therooster

      Interest is not the problem. It’s a symptom. Debt is manageable as long as a currency is asset based and not created from thin air. Debt currency at 0% interest does nothing for supply discipline and the possibility of robbing people through inflation.

      • Alessandro Machi

        therooster, Interest rates are ENTIRELY the problem. Because of low cost communication tools and existing infrastructure, people can actually cut the waste from their budgets and still get the essentials.

        However, to address your concern, I wrote about that on swarm the banks. The economy began to tank 10 years ago when the government and the federal reserve decided it was beneath them to overwatch home mortgages when they could be spending that time making money out of thin air and supplying it to our war machine.

        Oh wait a minute, Both of our wars were on CREDIT, why you ask? Because the interest rate charges on the war time bill is making some billionaire’s and trillionaires a TON of residual income.

        Please, lets not even think for a moment that interest rates are not the ENTIRE PROBLEM, except for our government and the federal reserve committing treason against their country by printing money for war.

  10. jay

    greg as usual i await reading your articals.
    not to seem religious but at this piont i think all we can do is cast all of these cares on GOD. its for sure man cant fix it anytime soon.
    i found it most interesting to read this artical by changing the word deficit to slavery.

    • therooster

      God gave us the ability to solve this issue but it is only when one embraces the Holy Spirit from within and without that the organic nature of structure has an impact, one that would give the mustard seed parable more meaning. We have the personal ability to monetize personally owned gold and purge fiat based debt right out of the system. Gresham’s Law (look it up) is predicated on fixed values for gold, not real-time values like we now have.

      When the most desirable real-time genie was set free from the bottle in 1971, the most undesirable debt genie escaped at the same time. The irony is that the real-time genie holds the keys to getting the debt genie back into the bottle.

      • Oldguy

        Rooster, The value of gold is 32 dollars/troy oz, just as when I was a kid. It’s the paper dollar that has decreased in value. Fluctuations in the cost of gold is commodities trading values, and nowhere is the gold standard hated more than by wall street. Despite the wall street efforts, the variations in gold value are small, and the average climb continues despite the street’s best efforts at manipulation. Oldguy

  11. Randal


    • Greg

      Thank you!

  12. cowboy

    Could consumer spending look like it is holding up because so many are loading up on supplies for the coming tuff times ? And could it be many are also just trading their dollars for tangible things. Go to any of the big discount stores on a Saturday and talk to some of the people loading up their suv’s or pickups with essentials. The ones I talked to are concerned just like you and I.

    • Greg

      Yes and it is also that inflation is misreported as growth. Probably a little of both.

  13. Mike

    Most everyone everywhere have debts including bankers, their families, attorney’s [lawyers], politicians and other members of the bank’s “inner circle”.

    The difference between the above debts [bank mortgages, huge bank personal loans cleverly disguised simply as small business loans] and all other debts is the bankers and their “friends” do not make interest and principal payments – like evryone else. Further, these interest and principal FREE bank loans often are written off as a Small Business Loan loss.

    For proof, start accessing documents filed and registered at Government Registry Offices such as The Land Title Offices etc. The size and terms of these “sweetheart bank loans” will shock you. Guaranteed !

    Was this ever the intention of the authors of The Bank Act ?
    I want to understand why the privileged elite must be enriched by the common, hardworking man. Thank you.

  14. smlaing

    Oh well. Nothing for me to worry about. I don’t have any paper and certainly none with leverage. just lots of “real stuff”…..You know, the sort of stuff made from stable resources, stable manufacturing and with stable demand. Nothings really changes…….just paper.

    I look forward to seeing you all at the end of days. Perhaps we can have a drink together and talk about how all those “Fascist Corporate Heads” ended up on spikes!

  15. therooster

    Monetize personal goal (in real-time). The added debt-free liquidity will free up debt based fiat to find the hands that need it most in order to purge (repay) debt and send it back to nothingness. This is why support of the bullion market is so vital. Gresham’s Law is reversing as bullion values go higher. Gresham’s Law is predicated on fixed gold values. The answer to purging deficits lies in the grass roots, with the market …. not with the elite. Wake up. We have the power. All they can do is carry the stick to get you to move.

  16. Vick

    Hey Greg,

    I follow you regularly and I would like to recommend a movie to you. It is called Thrive. It is hands down the only movie that will probably ever matter to anyone. It just came out on the 11.11.11. I’m not trying to advertise this movie at all I just enjoyed it so much I think you will also.


  17. M SMITH

    No one posted a thing about the CME group & the crap they and their buddies at the CFTC & SEC and the courts pulled off to screw 50,000 customes of MF Golbal out of their so called protected investments that the CME promotes on TV every day that farmers & Air Lines always depend on the CME to deliever the best service in the world. Now how did that work out? Ted Butler wrote a great article at & it’s still up for anyone to read & the commentary about the article is very telling of what one investor has been through sinse MF Golbal went under. There is alot more to the failure to MF Golbal than we know about & the corruption in the court system is only helping to hide the details. Great stuff as always! You never let us down.

  18. Steve

    One of the problems in American politics is that it only looks to the next election cycle or the next four years. Though they may say it looks to the future, the politician is only looking for reelection. To solve anything in that time frame, HOW?

    Greg, have you heard when they (the government) will run out of money again? I read in this last week, some where, it is soon and we just had a big to-do about that one, how soon, do you know?

    • Greg

      I think the $2.4 trillion Congress votes for in raising the debt ceiling may be used up before the 2012 election. Peter Schiff was one of the first to predict this a few months back.

  19. Sean S


    A truly excellent piece from Martin Armstrong which has been highlighted on a number of web sites. Telling it how it is in no uncertain terms. I do hope people read it.

    You should be getting this type of Armstrong commentary in the mainstream media but of course they are so dominated by the left wingers these days you won’t get this kind of perspective.

    Another piece worth reading this week (as usual)is John Hussman’s weekly commentary.

    It is just hilarious watching how the markets react to each piece of so called positive news coming out of Europe. I just wonder what kind of superficial dreamworld some of these people are living in.


    • Greg

      Thank you Sean.

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