Tag Archives: budget deficit

Mr. President, If We Don’t Have Gold, We Don’t Have a Country

The consequences of Gold Truth, such as it is but has not yet been revealed, are beyond sobering. If the Gold Truth is that USG, Inc. does not possess and own the gold it has promised the world that it owns and possesses, every last shred of monetary, fiscal, financial, economic and moral authority that USG, Inc. still possesses would be destroyed in a matter of seconds. And it is virtually impossible to see how the U.S. dollar could survive such a revelation without plummeting.Stewart Dougherty

Stewart Dougherty has written another compelling, thought-provoking essay about gold and the United States Government’s intentional omission of gold as the foundation of monetary and fiscal policy.  Please note that Mr. Doughtery’s view of Trump does not represent IRD’s view of Trump or his efforts as President.

“Passivity is fatal to us. Our goal is to make the enemy passive. … Communism is notlove. Communism is a hammer which we use to crush the enemy.” Mao Tse-tung, proclaiming the founding of the People’s Republic of China, 1949

Circumstantial evidence is mounting high that there is something seriously wrong with the amount of gold reportedly owned by the United States government, or more precisely, the American people.

After nearly two generations of being brainwashed into believing that gold is a meaningless relic, western citizens have lost all concept of gold’s crucial monetary importance. If it turns out that the United States does not, in fact, possess and own the gold it claims to, the monetary, fiscal, economic, and humanitarian fallout will be unprecedented in its destructiveness. Unfortunately, the people have no idea what is at stake.

The largest corporation in the world, by far, is the United States government. No other corporation has anything even close to its $3.4 trillion in annual revenues, and $4.4 trillion in annual expenses. And no other corporation has ever suffered multiple annual losses exceeding $1 trillion dollars, nor could it have, as such losses would have financially annihilated it. To be able to print money at will and without limit, as USG, Inc. can do, has blinded it to the powerful beast called Consequences that is slowly and methodically hunting it down.

USG, Inc. employs thousands of accountants, many of whom work at the Congressional Budget Office. The CBO prepares detailed budgets, one of which looks forward thirty years, and then extrapolates the numerical trends for an additional forty-five years, for a total forward horizon of 75 years. The 2015 report examines USG, Inc.’s projected performance until the year 2090. According to that report, not only will USG, Inc. lose money every single year for the next 75 years, the losses will actually accelerate each year and total more than $300 trillion. In 2047 alone, the deficit is estimated to be $5.3 trillion, on a cash accounting basis. On an accrual accounting basis, it will be far worse, if USG, Inc. even makes it to that point in its current state, something we find it difficult to envision. It is arithmetically impossible for the dollar to avoid destruction in such a scenario.

It should be no surprise that USG, Inc.’s finances are such a disaster, because for the past generation and longer, the CEOs of USG, Inc. have never in their lives held real jobs in the productive economy, other than GW Bush’s brief stints as a member of an oil and then a baseball investor group, which is not the kind of real job we mean. Instead, these CEOs have all been professional politicians, who by definition do not contribute to the real economy, but rather, feed upon it.

This pattern was about to repeat itself in 2016, with the Deep State’s planned installation of Hillary Clinton into the CEO role at USG, Inc. Clinton, too, has never in her life had a real job in the productive economy, and has precisely zero experience managing anything even beginning to resemble a massive corporation with millions of employees and projected $1+ trillion, accelerating annual losses extending as far as eyes can see. This is exactly what the Deep State wanted: a corrupt, financially clueless, ideological figurehead, who would be oblivious as they ramped up the looting of USG, Inc. to a new level of rapaciousness while she was busy hectoring the nation’s producers and taxpayers about their deplorable selves. It is this looting that is the precise reason why USG, Inc. is now drowning in losses and debt, and is strategically paralyzed.

While anyone with any common sense would immediately understand that it would be ridiculous to expect that someone with zero education, training or experience in engineering could oversee the design of a spacecraft capable of landing on Mars, or that someone with zero medical education, training or experience could successfully conduct brain surgery, for some unfathomable reason, people think that someone with zero business education, training or experience can successfully manage the world’s largest corporation. USG, Inc.’s catastrophic financial results demonstrate the regrettable stupidity of that thought.

TO READ THE REST, PLEASE CLICK HERE:   IF YOU DON’T HAVE GOLD…

Why Even Pretend There’s A Debt Ceiling Limit?

The current “debt ceiling” has been suspended until March 2019. The current amount of Treasury debt outstanding is $20.681 trillion. It has been estimated that the amount of Treasury outstanding by March 2019 will be as high as $22 trillion. U.S. Government has, for all intents and purposes, operated without a constraint on debt issuance since 2013:

Beginning in 2013, Congress has taken to temporarily suspending the debt limit, rather than raising it directly. The debt limit has now been suspended on five occasions, most recently as part of the Bipartisan Budget Act of 2018, which suspends the debt limit through March 1, 2019. When that suspension expires, the debt limit will be reinstated at a new, higher level.Bipartisan Policy Center

Note that the estimate of $22 trillion in Treasury debt outstanding by March 2019 is just an estimate from the Committee for a Responsible Federal Budget. But the suspension of the debt ceiling gives the Government carte blanche to spend as much as it wants without restraint. In theory, the amount of Treasury debt could me much higher than $22 trillion by March 2019.

Furthermore, based on the track record of Congress and the President since 2013, the debt ceiling will likely be waived once again. Why even bother playing this game? The Treasury debt doubled under Bush II from $5.7 trillion to $11.2 trillion. Under Obama the debt outstanding nearly doubled again. If this pattern simply repeats, the debt will double again under Trump or under Trump + Trump’s successor after four years.

But it will likely more than double. The cost of interest on the Treasury debt in 2017 was $458 billion. This was 11.5% of the Government’s total expenditures in FY 2017. Already in the first four quarters of FY 2018, the Government has spent $174.8 billion in interest expense – a run-rate of $524.4 billio – 12.8% of the Government’s FY 2018 budget . By the end of FY 2018, the total interest expense will be even higher because the amount of debt outstanding will be have increased over the year by at least $1 trillion and probably more.

The question, then, is why even bother with the debt ceiling?  What’s the point of pretending?  The debt ceiling was meant to act as a “brake” on the Government’s fiscal recklessness.  But now it’s so easy to suspend the ceiling it makes no sense to waste time going through the formality of suspending it.  The U.S. is on debt-driven suicide path anyway.

Money that is borrowed behaves exactly like money created (printed) until the borrowed money is repaid and the debt is extinguished.  But the Federal Government, for all intents and purposes has not repaid a dime of the amount borrowed for many decades.  In effect, in addition to the money that has been printed by the Fed, there is another $20.6 trillion of money that has been created by debt issuance and spent just like actual currency printed.

At some point, this de facto dollar devaluation is going to exert brutal and inexorable downward pressure on the value of the US dollar.  Furthermore, at some point, the U.S.’ biggest creditors – like China – are going to say “no mas” to participating in Treasury debt issuance.   That’s when the real fun will begin, especially for those long gold and silver.

Jack Lew’s Debt Ceiling Limit Kabuki Theatre

Spend and they will borrow or print money to fund it.  The debt ceiling limit currently is $18.1 trillion.  This number is 101% of the Government over-estimated GDP.  If you add in the $7 trillion of taxpayer guaranteed Fannie Mae and Freddie Mac mortgage debt, the true directly funded level of Government debt is about $25 trillion, or 138% of the overestimated GDP.

The Treasury hit the debt ceiling limit earlier this spring.  Since then Jack Lew has been borrowing cash from various “pools” of dedicated Government spending accounts, like Social Security and the Federal Employee Pension Plan (but not the Congressional Pension Plan, of course).  Lew was on CNBC a couple days explaining that his “smoke and mirror” tactics are now exhausted and if the debt ceiling is not raised, the Government will default on obligations.

But this is nothing more than a production of political Kabuki theatre.  The Senate I’m sure will rubber stamp any spending and debt plan that Obama sticks under its nose.  But the House is controlled by Republicans with an agenda – not to force spending cuts and actually reduce the rate at which the taxpayers accumulate more debt – to use this crisis in order to force the passage of their fanatical military, political and moral legislation du jour.

The truth is that ultimately a new debt ceiling limit will be established and the Government will continue printing and borrowing printed money from other Governments in order to continue on its historically unprecedented rate of growth in spending.  Mind you, this is spending mostly on programs which are used to transfer wealth from the middle class to the big corporations and wealthy elitists.

The fact that Paul Ryan is willing to step up and assume the Speaker of House role if certain of his pre-conditions are met tells me that the behind the scenes politicking  and deal-making has already been largely accomplished.  Now it’s simply of matter of the Government utilizing  the media to apply a heavy dose of scare-mongering so that the sheeple in this country can lose a little sleep before getting the relief of an eventual agreement which should take the new debt limit over $19 trillion.   Rest assured that this “crisis” will pass and no one will miss a swipe on their EBT card and the Pentagon can continue funding its terrorist activities around the globe.