Tag Archives: Treasury debt

“The World Is Drowning In Debt” – Goldman Sachs

The media propagandists, Wall Street snake-oil pimps and U.S. policymakers collectively like to point the finger at the rest of the world when addressing the issue of debt.  But when you total up all Government + private sector debt, the U.S. is the most debt-laden country in the history of the universe.

As of October 2014, the latest period for which the data is available, total credit market instruments – meaning all outstanding debt – in the U.S. economy was $58 trillion LINK. With the perverse increase in student loan, auto, mortgage and Treasury debt since then, the number is probably pushing $59 trillion.  The latest “measurement” of GDP by the Government was $17.7 trillion.  This puts total systemic debt at 333% of GDP.

So when Goldman makes a comment like “global debt is too much, man,” the title of a specific Hemingway novel rings in my ears (sorry, I was an English major in college).

But at least Goldman acknowledges the obvious in this article published by the Telegraph UK – and it’s an article that we’ll never see published by a U.S. newspaper:

The world is sinking under too much debt and an ageing global population means countries’ debt piles are in danger of growing out of control, the European chief executive of Goldman Sachs Asset Management has warned.

I wanted to post this article because it has an excellent graph in it (see below) and because you’ll note that the dweeb from Goldman singles out the debt problem in Japan.  How convenient it is for him to overlook the United States.  However the graphic below shows the U.S. to be among the worst offenders.  You’ll note that the graphic measures Government debt to GDP.  But now we know that only legitimate metric uses total debt to GDP to measure the problem.  And in this light of truth, the United States is the worst offender.

GlobalDebt

And therefore never send to know for whom the bell tolls; It tolls for thee. – John Donne

This Is Why A Gold Standard Is Required

(Treasury Secretary) Lew to Congress: US hits debt limit on March 16, needs to be raised ASAP (LINK)

Obama has made the claim that the U.S. Government spending deficit “narrowed” from about $1 trillion to $483 billion in the Government’s 2014 Fiscal Year (Oct – Sept).   But this is not possible.  Why?   Because the amount of Treasury debt outstanding increased from $16.74 trillion to $17.82 trillion during the Government’s 2014 fiscal year (LINK).   Once again, Obama has lied blatantly to the public.    Based on the amount the Treasury debt load increased, the true spending deficit in FY 2014 remained at around $1.1 trillion.

The debt ceiling has been raised 13 time since 2000.  It’s been raised 6 times since Obama took office and suspended twice.  “Suspended” meaning that the debt ceiling was removed temporarily.  In February 2014, Congress voted to waive the debt ceiling limit, which had been set at $17.2 trillion.  The current amount of debt outstanding is $18.14 trillion (LINK).  This “auto reset” expires on March 15, 2015.   Once again the public is going to have endure the absurdity of the Kabuki Theatrics conducted by Congress as they “debate” the issue of raising the ceiling.   We can be guaranteed it will happen at the very least to ensure Congressional paychecks and perks continue flow uninterrupted.

The U.S. Government prints and issues Treasury certificates just like the Fed prints dollars. When QE began, the Fed started with buying the garbage mortgage paper from the big banks.   In November 2010 it began to print money used to finance new Treasury issuance. Between that time and October 15, 2013 – when QE formally “ended” – The Fed was the biggest source of funding for new Treasury issuance.  It bought over two-thirds of all new Treasury debt.   Since then, Japan and the EU countries – U.S. lapdog countries – have been the primary suppliers of green heroin to the U.S. Government.

And now the Obama Administration, led by Jacob “Jack” Lew, are back to feeding at the hog trough by asking for even more debt.  This is debt that will never be paid back.  Debt issuance like this is also unsustainable.   Either the Fed/Treasury dynamic duo will eventually be forced to engage in hyperbolic money printing or let the Government financially collapse.  I don’t see the latter happening, which is why the former seems inevitable.

Perhaps this is why Alan Greenspan, in a continuance of his endeavor to salvage his legacy as “The Maestro,”  has admitted that the U.S. is on the verge of “explosive inflation”  (LINK).

All of the above would not be possible in a world in which the money supply is anchored by a gold standard.  Humans, especially politicians –  Fed members are ambiguously yet unequivocally politicians – can not be trusted to manage the money supply on their own.  Gold provides the requisite guard rails.