The Bankruptcy of the United States is Now Certain

Porter Stansberry
Silverbearcafe  
Thursday, February 4th, 2010

It’s one of those numbers that’s so unbelievable you have to actually think about it for a while… Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that’s not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That’s an amount equal to nearly 30% of our entire GDP. And we’re the world’s biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then “rolling over” the loans when they come due. As they say on Wall Street, “a rolling debt collects no moss.” What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt… at ever shorter durations… at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that’s when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt it’s called “a default.” Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. That’s why the formula is called the Greenspan-Guidotti rule. The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world’s largest money management firm, PIMCO, explains the rule this way: “The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support.”

The principle behind the rule is simple. If you can’t pay off all of your foreign debts in the next 12 months, you’re a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It’s a guaranteed default. The U.S. holds gold, oil, and foreign currency in reserve. The U.S. has 8,133.5 metric tonnes of gold (it is the world’s largest holder). That’s 16,267,000 pounds. At current dollar values, it’s worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that’s roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether… that’s around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we’ve been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So… where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we’re still going to come up nearly $3 trillion short. That’s an annual funding requirement equal to roughly 40% of GDP. Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or the Russian central bank, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they’re not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None own even 1% of their total reserves in gold.

I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry’s Investment Advisory, which we published last Friday. Coincidentally, the New York Times repeated our warnings – nearly word for word – in its paper today. (They didn’t mention Greenspan-Guidotti, however… It’s a real secret of international speculators.)

US Federal Reserve “Shock” 2012 Move Dooms America

A grim report given to President Medvedev today by Finance Minister of the Russian Federation Alexei Kudrin is stating that the private European banking conglomerate known as the United States Federal Reserve System, that basically rules over the finances of America, has given a “shock warning” to President Obama that they do not intend to renew the charter granted to them in 1913 by the US Congress and is set to expire on December 21, 2012, which (coincidentally?) is also the exact date that the controversial Mayan Calendar predicts will be the ending of our present age.

Even worse for the American people, this report says, is that in the Federal Reserves notification to Obama they  further stated that they only intend to pay back the US Government $156.3 Billion from out of their “huge profits” gained from their looting the United States Treasury of an estimated $23.7 Trillion.

Interesting to note about these events is that for the first time known, the “mainstream” American press is beginning to align themselves with those of us who have long warned of this banking monstrosity and their deliberate destruction of the US economy, and as we can read as reported by the Bloomberg News Service in their January 29^th article titled “Secret Banking Cabal Emerges From AIG Shadows”, which says:

“The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.”

To Bloomberg’s admission of this “secret banking cabal” that is destroying the American economy we can further read as reported by Canada’s Center for Research on Globalization:

“As we have constantly emphasized, as the global government and the financial takeover accelerates, it’s becoming harder and harder for the elite to hide the true intention of what they are doing, which is centralizing power into fewer hands, destroying sovereignty and creating a one world order run by an unelected, undemocratic authoritarian system.

So whereas “conspiracy theorists” were once sidelined as paranoid kooks, as more and more of what they warned about comes to fruition, they gain more credibility and the establishment finds it more difficult to neutralize what they are saying by means of character assassination.

The Bloomberg writer’s admission that the “conspiracy theorists” were probably right reminds us of former Clinton advisor Dick Morris’ appearance on Fox News last year, when he pointed out that people who have been sounding the alarm bells over a global government takeover for decades have also been vindicated.

“Those people who have been yelling ‘oh the UN’s gonna take over, global government’, they’ve been crazy but now – they’re right!,” stated Morris on Sean Hannity’s show.”

To the dramatic shift of the “mainstream” American news in telling their citizens the truth of what is happening to them we can see further evidenced by a New York Times article posted today which actually gives these peoples sound advice, and as we can read from their story titled “No help in sight, more homeowners walk away”, and which says:

“We’re now at the point of maximum vulnerability,” said Sam Khater, a senior economist with First American CoreLogic, the firm that conducted the recent research. “People’s emotional attachment to their property is melting into the air.”

Suggestions that people would be wise to renege on their home loans are at least a couple of years old, but they are turning into a full-throated barrage. Bloggers were quick to note recently that landlords of an 11,000-unit residential complex in Manhattan showed no hesitation, or shame, in walking away from their deeply underwater investment.

“Since the beginning of December, I’ve advised 60 people to walk away,” said Steve Walsh, a mortgage broker in Scottsdale, Ariz. “Everyone has lost hope. They don’t qualify for modifications, and being on the hamster wheel of paying for a property that is not worth it gets so old.”

Mr. Walsh is taking his own advice, recently defaulting on a rental property he owns. “The sun will come up tomorrow,” he said.”

To how bad the Federal Reserve System (which many call the World’s largest Counterfeiter) has destroyed the American economy is evidenced in their destruction of the US Dollar which has lost over a quarter of its value in the past 8 years, and what a single Dollar could buy in 1913, when this secret banking cabal began to strangle these people, would cost $21.67 today, and which comes out to a shocking inflation rate of  2067.0%!

And, most unfortunately, it is going to get worse as new reports are showing that the Baltic Dry Index (the World’s most reliable indicator of future economic growth) has collapsed over 40% in the past 10-weeks signaling the worst of this Global financial crisis is yet to come.

Equally as worse for the Americans is the ending of the World’s central banks support for the Federal Reserve, and as we can read as reported by the Business Week News Service:

“The Bank of England said Wednesday that it and other major central banks are ending emergency lending arrangements put in place with the U.S. Federal Reserve in the wake of the global credit crisis, citing improvements in financial markets.

The decision marks the first unified retraction by central banks around the world of extraordinary support measures to boost lending after credit markets seized up in late 2007, causing the global economic downturn.”

To the doom warned facing the American people it is entirely predictable to envision, as what is happening to them now has happened in the past, and they could plainly see if they but opened their eyes to the truth of how completely manipulated they’ve been. 

And the truth behind the “manipulators” currently destroying the American people was the creation by a European elite class of bankers (headed in the United States by Paul Warburg (known to history as the “Father of the Federal Reserve”) and chief financier of the United States and its Allies in World War II, and in Germany by his brother Max Warburg, who through his families 200-year-old private bank M.M.Warburg & Company was the chief financier of Adolf Hitler’s National Socialist Party) intent upon total Global domination and the enslavement of mankind.

[Put into its simplest context, the stark truth is that World War II was entirely financed by these two Warburg brothers using American funds funneled to them by Prescott Bush and the right-wing cabal that has, in essence, ruled the Western World since 1918 and has reaped Trillions of dollars in war profits for their “investors” at the expense of hundreds of millions of lives.]

To the American people awakening to their soon coming destruction it is not in our knowing, other than to point out the obvious fact that even as they continue to suffer under the cruel regime these “banksters” have imposed upon them, they still continue to pay their “bills” to a corrupt and secretive cabal so that they can continue reaching for the American Dream.

Unfortunately it is not a dream these people are living in, it is a nightmare….and of their own making because they just won’t face the truth. And as hard as it is to believe it is nevertheless true that these American people pay more on overdraft fees to their banker masters than they spend on fresh vegetables!

What can you say about people such as this? Maybe that they truly deserve what is coming.

[Note: Russian Finance Ministry calculations show that should the American people stop paying their money to banks (mortgages, credit cards, auto loans, etc.) and all declare bankruptcy the entire debt load carried by the US Government would be paid in less than 2-years and  the United States would have over $85 Trillion available to them over the next 10-years to pay for the complete rebuilding of their Nation and society.] 

US Treasury Official Openly Serves on Council of Rothschild-founded “Earth Bank”

Prisonplanet.com
Thursday, February 4th, 2010

Senior US Treasury Dept. Official William Pizer, the current Deputy Assistant Secretary for Environment and Energy is simultaneously a sitting council member on the Global Environment Facility ( http://www.thegef.org ), one of the largest funders of projects to “improve the global environment” (i.e. push through fraud-based carbon cap-and-trade programs).

This ‘Facility’, while not claiming to be a bank, at the same time calls it itself “An independent financial organization” (see http://www.thegef.org/interior_right.aspx?id=50#GEF%20History).

Isn’t it illegal (or at the very least unethical) for a senior member of the Treasury Department to openly sit as a member of a huge foreign bank (oops – “facility)? illegal (or at the very least unethical) for a senior member of the Treasury Department to openly sit as a member of a huge foreign bank (oops – “facility)?

This is only one of dozens of questions that should be asked about this organization, but we as tax-paying Americans should find someone who can answer this question, because it seems to me that either:

1) We need a law passed to stop such a high official holding two such posts and potentially using their influence and position in the US Treasury to move untold millions into the coffers of what is effectively a foreign bank or . . .

2) There is a law and someone needs to file a federal lawsuit

Pizer’s name/contact info. appear on the GEF website here (just scroll down a bit):http://www.thegef.org/interior.aspx?id=21670#PIZER

This is no small matter: I found this organization while researching information given by George Hunt on an Alex Jones Show interview last January (see http://www.infowars.com/the-inner-workings-of-a-one-world-new-age-government-alex-interviews-george-hunt/), and George Hunt claims this organzation was founded by Edmond de Rothschild and Maurice Strong (originally to be named the “World Conservation Bank”), and its purpose is to engulf all other banks.
    In the interview, George played numerous audio clips proving Edmond De Rothschild, Maurice Strong, as well as former Treas. Sec. James A Baker III, and the then heads of the IMF and World Bank were involved in promoting this new bank at the Fourth World Wilderness Congress in 1987 in Colorado.

The very fact that you can’t find any information on who actually started this bank is suspicious in itself , given its size and massive UN backing: the Wikipedia entry on this organization merely parrots that which is on the ” thegef.org ” website, and also does not explain its origin:

The Wikipedia entry states “The Global Environment Facility was established in October 1991 as a $1 billion pilot program in the World Bank to assist in the protection of the global environment and to promote environmental sustainable development”.

Established by who?

The GEF’s verbose and acronymn-laden 2008 annual report brags of the millions of dollars ostensibly transferred from 1st world nations to poorer nations to help clean up their environment, but it offers zero details on where the money came from other than simple pie charts showing broad categories such as “government”, “NGO”, etc.:http://www.gefweb.org/interior_right.aspx?id=26610

Everyone should contact their US senator or congressman, as well as the US Attorney General and demand an investigation into this obvious appearance of impropriety on the part of the US Treasury Department

Sincerely,

Jeff in Tx

Getting Ready for Tax Day: IRS Puts Out Bid to Buy Sixty Police Shotguns

Kurt Nimmo
Prison Planet.com
Wednesday, February 3, 2010

If we are to believe senator Harry Reid (see video below), the taxation system in the United States is voluntary. Reid admits that if you don’t pay your cut to the government you will be fined or arrested and imprisoned, but the system is voluntary in the sense that you are allowed to file tax forms. Other countries, says Reid, just take your money without this formality.

Prior to the Sixteenth Amendment (supposedly ratified on February 3, 1913) there was no justification for the government to steal your hard-warned money. The Constitution, in Article I, Section 8, gives Congress the power “to lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States.” It says nothing about income taxes.

“The Internal Revenue Service is the enforcement arm of the Federal government’s present unjust tax system,” notes the Constitution Party. “Citizens, both in groups and as individuals, have repeatedly sought responses from the IRS bureaucracy as to the basis for the agency’s tax policies and procedures. No answers have been forthcoming although a responsible government must be answerable to the people and has a duty to those it is supposed to serve.”

Obama has rolled out his class warfare tax increase rhetoric. He says he will increase taxes on the “rich” (defined as anybody who makes over $200,000 per year) in order to pay down the debt owed to a gaggle of international bankers. He also plans to float increased taxes on corporations.

“While we extend middle-class tax cuts in this budget, we will not continue costly tax cuts for oil companies, investment fund managers and those making over $250,000 a year,” Obama said. “We just can’t afford it.”

Of course, the real rich — the Warren Buffetts and Rockefellers of the world — and large transnational corporations do not pay taxes. Taxes are for the little people (including those making around $200,000), as billionaire Leona Helmsley once said. Obama is merely attempting to sell the idea of tax increases by engaging in class warfare and pandering to public contempt for oil companies and “investment fund managers” on Wall Street.

New taxes will be taken out of the hide of the average American, as always. In order to enforce this looting, the IRS and its Criminal Investigation Division will need more muscle in the coming months. That’s why they are arming themselves to the teeth. The role of the Criminal Investigation Division is to “generate the maximum deterrent effect, enhance voluntary compliance, and promote public confidence in the tax system,” according to Treasury Department, a branch office of the Federal Reserve (currently run by the criminal Timothy Geithner, the man with Goldman Sachs on his speed dialer).

According to the FedBixOpps website, the IRS is in the market for sixty police shotguns:

Quotes are solicited under Request For Quotation (RFQ) number TIRWR-10-Q-00023. This announcement constitutes the only solicitation; a written RFQ will not be issued. If your company can provide the product listed in the RFQ and comply with all of the RFQ instructions, please respond to this notice.

This requirement is a Small Business Set-Aside and only qualified sellers may submit quotes. NACIS code for this requirement is 332994. The RFQ opens on the date this announcement is posted and closes Wednesday, February 10, 2010, 2:00:00 PM Pacific Standard Time. Response should be emailed or mailed by the closing date to Marc.Feinberg@irs.gov or IRS, 1301 Clay Street, Oakland, CA 94612. FOB Destination shall be Washington DC.

The Internal Revenue Service (IRS) intends to purchase sixty Remington Model 870 Police RAMAC #24587 12 gauge pump-action shotguns for the Criminal Investigation Division. The Remington parkerized shotguns, with fourteen inch barrel, modified choke, Wilson Combat Ghost Ring rear sight and XS4 Contour Bead front sight, Knoxx Reduced Recoil Adjustable Stock, and Speedfeed ribbed black forend, are designated as the only shotguns authorized for IRS duty based on compatibility with IRS existing shotgun inventory, certified armorer and combat training and protocol, maintenance, and parts.

In order to make sure you pay your ransom to the government, the IRS needs to add sixty of these to its arsenal.

Submit quotes including 11% Firearms and Ammunition Excise Tax (FAET) and shipping to Washington DC.

The following provisions and clauses in the Federal Acquisition Regulation (FAR) apply to this acquisition and include any addenda to the provisions. This solicitation incorporates one or more provisions and clauses by reference with the same force and effect as if they were given in full text: Provisions FAR 52.212-1 Instructions to Offerors—Commercial Items (June 2008); 52.212-3 Offeror Representations and Certifications—Commercial Items (August 2009); Clauses 52.212-4; Contract Terms and Conditions—Commercial Items (March 2009); and 52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items (December 2009). The full text of a FAR clause may be accessed electronically at http://www.acqnet.gov.

New equipment only; no remanufactured products. No partial shipments

Offer must be good for 30 calendar days after submission

Offerors must have current Central Contractor Registration (CCR) at the time offer is submitted. Information can be found at http://www.ccr.gov.

This is a combined synopsis/solicitation for commercial items in accordance with Federal Acquisition Regulation Part 12, Acquisition of Commercial Items. The government will award a commercial item purchase order to the offeror with the most advantageous offer to the government. All offerors must submit their best price and delivery capabilities.

Contracting Office Address:

Internal Revenue Service OS:A:P:B:W

Office of Business Operations

1301 Clay Street, Suite 810S

Oakland, CA 94612 -5217

Place of Delivery:

IRS-CI

SE:CI:OPS:STO, attn. S/A Staggs, Room 2003

1111 Constitution Avenue NW

Washington DC 20224

202/622-5114

Primary Point of Contact:

Marc A Feinberg

marc.feinberg@irs.gov

Phone: 510/637-2152

Fax: 519/637-2110

Secondary Point of Contact:

Kyong H Watson

kyong.h.watson@irs.gov

Phone: 510/637-2142

Fax: 510/637-2110