Ladies and gents,
The 2008 Financial Report of the United States is out.
Digg in!!
As I briefly skim the contents, it looks like more of the same bad news.
Revenues are flat, expenses are rising, and our future liabilities, such as interest payments on Federal debt, Social Security, Medicare, and the like are going through the roof.
In other words, the government is beyond bankrupt.
This also means that it has three ways of resolving this crisis:
1) Default on their obligations
2) Downsize dramatically, slash expenditures and increase revenues
3) Print money to meet ever increasing payables due
Dear Readers, I believe that option 3 is the path our government is going to take. However, Fedgov might be forced into option 1 by its many creditors, who might force the country into receivership [1][2] in order to liquidate its assets.
Option 2 will only happen if the People wake up, rise up, and force incompetent and corrupt business and government leaders to give up the reins of power. While I am optomistic that the masses will finally impose much needed discipline upon the political elites, one wonders when the Revolution will actually begin.
Speaking of financial issues, please be sure to check out the January 3, 2009 Financial Sense broadcast. These fine gents have uploaded hours of need-to-know financial information that you won't find in any of the mainstream publications.
If you can make it through all of the podcasts, then you will know everything you need to know about what's going to happen both economically and politically going forward, and can plan accordingly.
Also, one will come to the understanding that Political Feminism is a Dead Hag Walking. There is no possible way that any populace is going to continue to fund and propagate an ideological system that ruins and impoverishes so many people.
Indeed, men and women are going to be clinging to each other as they shiver in the dark, wondering how they are going to survive the tribulations that are to come. Old Skool Manliness is set to make a roaring comeback.
Quite simply, it is going to be every family unit for themselves. The Matriarchal State, financed by huge quantities of Fiat Money and Credit, will quickly become obsolete.
It will implode upon itself like a house of cards, and I for one can't wait.
Toku out.
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4 comments:
Interesting post. Do you think 2009 will be the year that foreigners stop buying US T-Bills?
Ron Paul says so halfway through this:
http://www.youtube.com/watch?v=08gTWqWrI4M
Also, there might be some shakeups with the RMB, i.e. the Chinese yuan.
The Western Confucian linked to:
http://www.asianews.it/index.php?l=en&art=14131&size=A
and
http://www.mercatornet.com/articles/view/titanic_china_has_an_appointment_with_an_iceberg/
at
http://orientem.blogspot.com/2009/01/paper-dragon.html
My top question is -- what will the military effects of the financial crisis be?
My second question is - what about the economics of food?
But those are broad questions...
Sell Civ,
That is a lot of ground to cover.
2009 is going to be an interesting year... so let me say first of all that the shit could hit the fan at anytime! Therefore, individuals should make, validate, and execute financial survival plans NOW and not wait to see what happens.
The Titanic could hit the iceberg at any time... but my sense is that we won't get any series bond market bursts until dollar debasement via inflation and excessive money printing begins in earnest.
So... maybe later in 2009 or in 2010 sometime, we might see liquidity enter the economy, and inflation will make itself known in a major way. Or, maybe the Dollar index will tank.
Then, as the dollars become increasingly worthless, foreign governments might accelerate their ongoing diversification efforts, and bondholders might sell their bonds and flee into something else, most likely precious metals or stocks.
It's hard to say when our ongoing bond bubble will pop, but when it does, then that's when things really get interesting! But I am doubtful anything like that will happen this year.
As far as military consequences... I've heard various scenarios presented. Some think that Fedgov will simply take its medicine and stagnate in our corner of the world... others think that they will bully the rest of the world into propping up the dollar.
In my humble opinion... I am afraid that another War will be started in order to get rid of "excess capacity" and provide full employment. Most alternative analysts believe that WWII was what ended the 1930's depression, and I accept this view.
So, I'm worried about America picking a fight with someone, i.e. Russia or the Middle East, in a vain attempt to jumpstart the economy.
But going forward, we are just going to have to watch the dollar and bond markets carefully and wait for more info.
In the meantime, I'm buying gold, silver, the oil (OIL) etn, some nice high dividend Trusts (energy, royalty, etc), and researching the alternative energy sector. I think this will be the next bull market, and I want to get in early!
Peace.
"but my sense is that we won't get any series bond market bursts until dollar debasement via inflation and excessive money printing begins in earnest."
I meant here that when the inflationary effects of all of the moneyprinting and stimulus manifests into the economy. Right this second, the newly created money isn't flowing into circulation as banks hoard cash and plow them into Bonds and T Bills...
"...what about the economics of food?"
In my opinion, there are two answers that come to mind.
First, the fundamentals of investing in commodities such as wheat and rice are compelling, and there are some good ETFs out there that give you exposure.
http://marketoracle.co.uk/News-catid-117.html
But... since this is a volatile area, be sure to do massive amounts of homework before you jump in.
I plan on keeping an eye on foodstuffs to see what happens, as a position I had during last year's commodities spike appreciated quite nicely!
The second answer... people should have emergency food and waterstores on hand. In our case, we have a spare 50 lb bag of rice, some bottled water, and other foodstores here at the ranch.
Unopened rice and bottled water lasts for two years. Canned veggies and meats (like tuna) last a hot minute as well.
When it comes to food storage, having supply in hand is better than food at the grocery store!
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