… Despite the Obama administration touting a budget deficit of “only” $680 billion in 2013, the GAO’s more accurate accounting shows a total government cost of $3.8 trillion on total revenue of $2.8 trillion.
In other words– the administration wasn’t exactly honest with the American people– the deficit was more like $1 trillion, not $680 billion.
But it gets worse.
The GAO added up ALL the US government’s assets in 2013. Aircraft carriers. The highway system. Land. Cash and financial assets. The total is $2.97 trillion. The liabilities, on the other hand, total $19.88 trillion. This includes the official public debt, plus all sorts of IOUs and loan guarantees.
This means the net EQUITY of the US government is -$16.9 trillion [poster note: yes negative folks. GE.]
Moreover, the US government’s cash position is a mere $206 billion… roughly 1.1% of its public debt. This isn’t enough to cover net interest payments for the next year.
Unlike a savvy investor who borrows cheap money to purchase productive assets, the US government borrows money to pay interest.
via Sovereign Man and H/T to ZeroHedge where we saw it first
The deregulation of the financial system during the Clinton and George W. Bush regimes had the predictable result: financial concentration and reckless behavior. A handful of banks grew so large that financial authorities declared them “too big to fail.” Removed from market discipline, the banks became wards of the government requiring massive creation of new money by the Federal Reserve in order to support through the policy of Quantitative Easing the prices of financial instruments on the banks’ balance sheets and in order to finance at low interest rates trillion dollar federal budget deficits associated with the long recession caused by the financial crisis. Continue reading →
Breaking up is hard to do, especially when it is with a tracking service like a financial institution. Sometimes you can make a clean break and other times you have to remain “just friends”.
The US government actually has a name for people who have no bank accounts – they call these folks “the unbanked”. The FDIC defines the unbanked as “those without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another.” Another term is “the underbanked” – “people or businesses that have poor access to mainstream financial services normally offered by retail banks. The underbanked can be characterized by a strong reliance on non-traditional forms of finance and micro-finance often associated with disadvantaged and the poor, such as check cashers, loan sharks and pawnbrokers.” Continue reading →
Preparation for disaster, whether natural or man-made, should be as vital as any ideal found in the various practices of religion and spiritualism. Preparedness should be treated with reverence, discipline and duty. The drive for preparation should be seated in the very heart of humanity. As individuals and as a society, we should hold preparedness dear, for it is an expression of the desire for survival and the key to maintaining our inherent freedoms. Without self-sufficiency, we set ourselves up for endless failure and enslavement. Continue reading →
… Congratulations Cyprus savers – you were just betrayed by both your politicians, and by Europe – sorry, but you are the “creeping impairments” in the game known as European bankruptcy. And so is anywhere between 6.75% and 9.9% of your money, which you were foolish enough to keep with your banks (where at least you were compensated with a savings yield of… 0%).
More importantly, as of this morning Europe has finally grasped that there is a 6.75% to 9.9% premium to holding physical cash in your mattress rather than having it stored with your local friendly insolvent bank.
Luckily Cyprus is so “small” what just happened there will never happen anywhere else: after all in Europe nobody has ever heard of “setting an example”. Or so the thinking among Europe’s unthinking political elite goes.
And congratulations Europe: just when people almost believed you things are “fixed” you go ahead and prove to the world that you are as dis-unified (because size doesn’t matter in a true union), as confused, as stupid and as broke as ever…via …Saver “Panic”, Frozen Assets, Bank Runs, Broken ATMs | Zero Hedge.
Responding to this ZerHedge article, Ann Barnhardt posted this:
Finance: The Cypriot Confiscation is Terrifying. Posted by Ann Barnhardt – March 16, AD 2013 9:27 PM MST
Yes, it is every bit as bad as it sounds, and worse. Word is that the initial plan was for a 40% (!!!!) levy confiscation of Cypriot bank accounts. They settled for a MERE 6.75% and 9.9% dual-layered compromise.
Yeah, you all need to do what I have been doing for the last several months and live within spitting distance of being overdrawn in your bank accounts. In other words, keep the BARE MINIMUM in the bank and feed your account just enough to cover the bills. As soon as money comes in, get it the heck out of there.
Looks like the IRS may prove to be the least of my worries with regards to levying bank accounts!
This has the potential to spark bank runs in other Southern European nations MERELY BECAUSE OF THE FACT THAT IT ACTUALLY HAS HAPPENED. Pray the Greeks, Italians, Spaniards and Portuguese are all watching talent shows or soccer and don’t notice. But if it does, if you have watched my eight-part economic presentation on YouTube, then you understand that we will blow sky-high as the big banks and their tens of trillions of dollars in repos and reverse repos and credit default swaps, many-to-most of which are written on European sovereign debt, blow.
… UPDATE: I agree with various commentators that this is almost certainly a test-run by Brussels to see what the reaction of the Cypriots is. If no one is hanging from light poles by sunset on Tuesday, they will likely move on to Greece and the other Southern European economies, satisfied that the people have been sufficiently conditioned to roll over. Tiny Cyprus, an ISLAND mind you, makes the perfect test lab.
I anticipate that the light poles will remain undecorated. There is no fight left in the men of former Western Civilization; only indifference punctuated by self-loathing. Say goodnight, Gracie.
It used to be that debts were enforced with the threat of imprisonment. If you took out a loan and you couldn’t afford to pay it back, then you would be arrested and thrown in jail. But now—in the United States, at least—debtors’ prisons are supposed to be a thing of the past, a relic from a more barbaric era.
“For the most part, the US outlawed debtors’ prisons before the Civil War,” said guest host Ezra Klein on Tuesday’s episode of The Rachel Maddow Show. Continue reading →
Can you manage your money? A personal finance quiz.
Are you financially literate enough to manage your own money? Teenagers say less than half of their families have had a discussion about money management, according to a 2011 Junior Achievement/Allstate Foundation survey. Another poll by Yahoo Finance found that 37 percent of adults have no retirement savings, and 38 percent plan to live off Social Security after retirement. When it comes to making good decisions about money, are you a beginner, a financial whiz, or somewhere in-between? Take the quiz to find out.
There is no doubt that the elite have always sought to carefully manufacture news and to control the beliefs of the masses through their interests in funding education and in owning media distribution channels for centuries. There is a wealth of history that chronicles the elite’s desires to control and sway public opinion by manufacturing news versusthe honorable journalism pursuit of reporting news in a fair and accurate manner. For example, in 1917, Congressman Oscar Callaway stated, as documented in the Congressional Record: Continue reading →
If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn’t. The founder of Global Macro Investor “previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe… Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes.” It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen….
…The dollar was a median step towards a newer and more corrupt ideal. Its time is nearly over. This is open, it is admitted, and it is being activated as you read this. The speed at which this disaster occurs is really dependent on the speed at which our government along with our central bank decides to expedite doubt. Doubt in a currency is a furious omen…
… Cash is created out of thin air by the central bank of the country which is often privately owned. The central bank can just have it printed for the cost of printing, by the government or privately. The central bank then uses this cash it creates out of thin air to buy interest-bearing public debt in the form of government bonds.Government debt is perpetual and thus interest paid on it is perpetual. Therefore a good definition of cash might be: evidence of public debt on which taxpayers will be paying interest forever…
Today billionaire Eric Sprott told King World News that a staggering 500 million ounces of paper silver traded hands during the takedown in the metals this week. Eric Sprott, Chairman of Sprott Asset Management, had this to say about what took place the day of the plunge in gold and silver: “I can only imagine it’s the same forces that for the last twelve years have been at work in the gold market, trying to keep the volatility very large on the downside. As you are aware, we hardly ever get days when you get an intraday $100 rise in gold. When we look back at what happened (on Wednesday) we saw huge sell orders in gold and silver.”
“When I look at the silver market in particular, in a 30 minute span we had sellers of 225 million equivalent paper ounces, in a market that in one year the silver miners only produce 800 million ounces. So again, it’s the paper markets overwhelming the physical market. It’s stunning to me that on a day like Feb. 29th we traded 500 million ounces of silver. No rational person could believe it had anything to do with the real market for silver.... Continue reading →
From the office of Senator Jeff Sessions, ranking member on the Senate Budget Committee.Be sure to pay attention to the footnote which reads:“Under President Obama’s plan, gross federal debt alone would reach $75,000 per capita in 2022.”At the rate we are going, it will reach that point within the next few years. 2022 is overly optimistic in my opinion…via Libertarian News.
“…According to Mitchell (who is a senior fellow at the Cato Institute), some wealthy Europeans are preparing for a level of chaos in their respective countries worthy of the title, “apocalyptic.” In Mitchell’s words:
About a year ago, I spoke at a conference in Europe that attracted a lot of very rich people from all over the continent, as well as a lot of people who manage money for high-net-worth individuals.
What made this conference remarkable was not the presentations, though they were generally quite interesting. The stunning part of the conference was learning — as part of casual conversation during breaks, meals, and other socializing time — how many rich people are planning for the eventual collapse of European society.
Not stagnation. Not gradual decline. Collapse.
As in riots, social disarray, plundering, and chaos. A non-trivial number of these people think the rioting in places such as Greece and England is just the tip of the iceberg, and they have plans — if bad things begin to happen — to escape to jurisdictions ranging from Australia to Costa Rica (several of them remarked that they no longer see the U.S. as a good long-run refuge)…”
..Americans have been very tolerant. We’ve handed money over for Wall Street bonuses rewarding the psychopaths who blew up our economy and created 23.9% unemployment the real undistorted employment rate. We’ve watched silently as Bernanke lied to us about the banks being fixed—as if we’re too stupid to know that FASB is now just legalized Enron accounting. We’ve rolled our eyes and bitten our tongues when some of the psychopaths later professed to be, “Doing God’s work.” We’ve watched our kids get molested by perverts hired off adds on pizza boxes, had our wives breasts exposed during these idiotic searches and ourselves been exposed to radiation while in naked body scanners that could be used in the oncology departments of hospitals.
I seriously suspect that people have had enough and that it won’t be long before they break out the pitchforks and torches. Throughout history we’ve read about times when citizens were forced to resort to violence in order to restore law and order.Ironic—if you really think about it.
I seriously suspect we are about to witness this first hand—pitchforks and torches…
Bankruptcy has often been considered to be the ultimate shame and crowning mark of failure. Yet for millions of people out of their financial depth, bankruptcy should actually represent a path out of a financial nightmare. Bankruptcy is not reserved for deadbeats, failures, or losers. Instead, it is for honest individuals who realize that the only way out is starting over…
Excerpt “… The Great Depression was caused by the Federal Reserve and their owners, the biggest Wall Street banks, aiding and abetting reckless speculation, greed and extreme risk taking with mountains of debt. The rich got richer and the poor got poorer. The income inequality in the U.S. reached an all-time peak in 1928. It stayed at a high level until World War II. The glory years of the American Empire were from 1941 through 1979, when the middle class was growing, and the income distribution in the country was fair and equitable, as our manufacturing based economy raised all boats.
The income inequality in the country reached the same extreme level in 2007, just prior to the Wall Street created financial implosion. It has not improved in the last four years. In the early 1930s there was the feeling of revolution in the air. With unemployment at 25% and people in desperate straits, the government feared communists or fascists gaining power. The New Deal was really a way to keep the citizens occupied so that a revolution would not take hold.
Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy Committee to put £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession…” Go here.
” According to the latest report from the Comptroller of the Currency, just four U.S. banks have an eye popping $235 trillion of OTC derivative leverage. (Click here for the complete Comptroller of the Currency report.) As a nation, U.S. banks have a total OTC derivative exposure of $250 trillion. So, the fact that just four U.S. banks have this much leverage and risk is astounding! The banks are listed below in order of size and approximate OTC exposure:
1.) JP MORGAN CHASE BANK NA OH
$78.1 trillion OTC derivatives
2.) CITIBANK NATIONAL ASSN
$56.1 trillion OTC derivatives
3.) BANK OF AMERICA NA NC
$53.15 trillion OTC derivatives
4.) GOLDMAN SACHS BANK USA NY
$47.7 trillion OTC derivatives
Considering that the total assets of these four banks are a little more than $5 trillion, I see a frightening amount of risk with a total derivative exposure of $235 trillion! This is nearly 50 to 1 leverage. …”
Breaking up is hard to do, especially when it is with a tracking service like a financial institution. Sometimes you can make a clean break and other times you have to remain “just friends”.
Preparation for disaster, whether natural or man-made, should be as vital as any ideal found in the various practices of religion and spiritualism. Preparedness should be treated with reverence, discipline and duty. The drive for preparation should be seated in the very heart of humanity. As individuals and as a society, we should hold preparedness dear, for it is an expression of the desire for survival and the key to maintaining our inherent freedoms. Without self-sufficiency, we set ourselves up for endless failure and enslavement. Continue reading 
From the office of Senator Jeff Sessions, ranking member on the Senate Budget Committee.Be sure to pay attention to the footnote which reads:“Under President Obama’s plan, gross federal debt alone would reach $75,000 per capita in 2022.”At the rate we are going, it will reach that point within the next few years. 2022 is overly optimistic in my opinion…via Libertarian News.
The Grey Enigma 