Wednesday , 13 December 2017


Warning: This Economic Article Is Not for the Faint of Heart

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Never before in American history have we seen such a pitiful, pathetic, and anemic response to challenges and trials. We are truly a society of wimps. Spiritual wimps, devoid of any courage and conviction when it comes to speaking the truth, and milquetoast coelenterates [dictionary.com defines such as very timid, unassertive, spineless people who are easily dominated or intimidated] for failing to look past our own materialism to accept the common truth that what we have been doing is simply not sustainable. You and me both. Let’s dig into the undeniable conclusions, shall we? Words: 1331; Charts: 3

So writes Andy Sutton (www.sutton-associates.net) in edited excerpts from his original article* entitled The Day the Music Died.

This article is presented compliments of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Sutton goes on to say in further edited excerpts:

U.S. Gov’t Debt – Chasing the Parabola

…[W]e are in debt, not for $16+ Trillion and growing steadily but many times more than that when an honest derivation is compiled…[and] there is simply no way to pay this back using conventional means. By conventional means I mean producing beyond consumption, saving, and paying down the debt. Why? [Because] we live (despite some recent shifts) primarily in a petroleum-based economy. There simply isn’t enough oil on this planet to burn that would permit the kind of growth necessary to pay off our debts – never mind the fact that America is still running massive monthly trade deficits – so we’re still diving further into the red….

We cannot logically begin the discussion of improving things when there is absolutely no recognition of the fact that we’re still piling on the mistakes. [See chart below.] Before the problem can even be addressed, our leaders would have to come up with, and implement, a plan that would set us on even keel on an annual basis, then move forward from there. The social and economic pain necessary to do that is politically unfathomable to those who serve no useful purpose outside the arena of politics – and we have allowed it to become this way. We allowed them to transition from public servants to lifetime wards of ‘We the People’.

This is not a political essay, but in short, we cannot expect our leaders to the do the right thing. They have neither the courage to do what is right, the expertise to identify the right steps, nor the skills to implement them. Government does not create; government destroys – and the bigger government gets, the more it destroys. Ours, along with those of most of the developed world, has become a wrecking ball on steroids.

 

US National Debt in Dollars

 

The ‘national debt’ will not be paid off. Yes, it is very likely that we’ll be asked (more likely mandated) to sacrifice the rest of our freedoms, economic and otherwise, in the pursuit of such a goal, but we will be asked to do so by people who already know that it is an impossible task to accomplish. One must really begin to consider motives if any honest discourse is to be had regarding this topic….

Currency Wars are Coming

Anyone who wants to be competitive [in the international marketplace and, as a result, export more goods than they import and, as a result, strengthen their economy and financial situation] has to fall into the badly ending scenario of competitive currency devaluation.

What exactly is the end game of competitive currency devaluation (CCD) anyway? Well, let’s set the mechanism in order. Banks across the globe (USFed, ECB, BOE, and now the BOJ) engage in QE to infinity. They print money. Lots of it. This allows them to do two things:

1. They buy the debts of countries that the people of those countries are responsible for paying. Essentially it is an annuity for them. In perpetuity. They know the debt can never be paid, but they’ll put Joe Global Citizen on the hook for all of it and the people of the world can spend the next hundred or more years working to pay it all off. The money is worth nothing really, but this is about control.  We’re not talking about Robin Hoods here, but of hoods that rob. They are petty thieves and nothing more.  That is the first result.

 

Fed's Holdings of Treasury Bonds

 

2. In the act of creating all this money, they can buy up commodities, productive assets, companies, and basically anything of value without having to even break a sweat. They declare their money to have ‘value’, declare they have lots of it, then enslave the world’s population with it. Pretty simple. They get the mine and we get that tunnel part – come on, you know what I’m talking about here. Again, the sports page is available at your nearest newsstand for anyone who can’t handle the simple truth of this matter. (I hear there is a great write up on the upcoming Stupor Bowl.)

However, CCD eventually reaches an absolute bottom and a reordering must take place. That is the stage we’re getting to now, hence the fact that the mainstream financial press is FINALLY starting to talk about what they are calling currency wars. As usual, they are years behind the curve. I will admit up front that I have no inside knowledge of, or idea when, we’ll see this re-ordering other than my own instincts….

Like I’ve said many times before, the ingredients for the re-ordering are already in the mixing bowl. It is all a matter of when someone – or a black swan type event – throws the switch. It could happen next week, next year, or a few years from now. The bottom line, and the most important thing to remember is that it will happen. That is an undeniable conclusion. It cannot be avoided. The time for talking about reversing course is long gone.

 

US Debt to GDP Ratio

 

As stated above, this re-ordering could happen fairly quickly or it could get dragged out a few years. Many will say that once the U.S. crosses the debt/GDP ratio of 106% (where we’re at now) that will be it because that is when Europe started to go into the tank. I disagree. Our piggybacking bank was already doing heroic measures long before we got close to 90% debt/GDP, whereas it took the ECB a while longer to get on board. The idea that they’re now ‘on the job’ has quieted many of the fears and that too is a pure falsehood. Europe’s reckoning day is ongoing, not gone. Even the IMF has acknowledged that 2013 will be a year of contraction in Euroland. There is no easy exit for anyone. Assertions to the contrary are based either in deception, fantasy, or vested interest – perhaps a little of all three.

China Intends to Replace the USD With Its Own Gold-backed Currency

…[T]he Chinese have been systematically converting their massive gold reserves to 1Kg bars, complete with Chinese government insignia. They’re going to put out the next gold-backed currency, at least a partial one. The Russians want in too and they’ve been buying gold with both hands. It might end up being a regional hybrid between the Ruble and the Yuan. It will likely replace the dollar as the reserve currency because gold is a legitimate reserve.

Every central bank around the world has been buying gold like crazy while having their henchmen in the financial press bash it as a barbaric relic. They know how this ends and are already positioning for it. Just keep in mind, they’re not doing it on your behalf. Remember 1933? The government did the gold version of a gun buyback program, got the public gold, then promptly devalued the dollar.

Conclusion

If anyone here really thinks that Main Street America will escape the age of dollar hegemony without a severe haircut on its purchasing power, I’d seriously like to hear from you because we have much to discuss. There is not a person reading this that doesn’t have exposure in one way or another. Whether it is a pension plan, a bank account, an IRA, a government bond, a derivative, or some other vehicle, you will be affected by the paradigm shift that is already at our door. The real question looking back will be ‘Where were you the day the music died?”

Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

*http://www.sutton-associates.net/issues/mtc_2013/mtc_01252013.php (Please feel free to distribute, copy or otherwise disseminate this information.)

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One comment

  1. We have seen the Enemy and he is US…

    The problem with a democracy is that it depends on good Leaders, if our elected Leaders serve their Wealthy Donors instead of the American public then you get what we have now…

    Media Profitganda* instead of factual News about what is going on in the World.

    Imagine how our lives would be if we did not have the internet, all of US would be not be able to share ideas and that would make US a Third World Country.

    * http://www.urbandictionary.com/define.php?term=Profitganda

    Profitganda is the use of phony “feel good” information to sell an idea, product or concept to the masses.