The Coming Age of Debt Defaults: The US May have to Lead the Way and Default on All Debts. We Must Learn New Ways to Live and Survive.
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Revised
and originally published 12.19. 2009
Abstract: Since we are
going broke and our currency will collapse anyway we might study how Argentina Greece Latvia GDP as it soars beyond our
ability to pay it off even in 30 years. We probably could not pay it off in 300
years even at 2% interest. We may have to use debt as a weapon and avoid taxes
at all costs while investing in tangible assets. There are foreclosure scams
utilized by minorities that are highly successful and that might be exploited
as the government is bent upon restoring private property and the GDP by spending and printing money. We have to
learn new ways of living and working and investing and that includes barter,
trade and black market operations. This satire will hopefully inspire some new
thinking 0n debt and survival.
My overview on the economy:
I
have been writing on the economy for some years now[1][2][3][4]
after watching it closely for several decades. It is sick. We have clearly
passed the point of no return in debt terms as we cannot possible pay back all
we borrowed from future US
The theory or lack of
it:
There
are only two major factors to consider here in terms of theory: [1]
Keynesianism is now being tested on a grand scale and [2] The lack of
demonstrated cases where Keynesianism has clearly failed is not clear to us all
at this time. We are stuck in the Realm of Keynes whether we like it or not or even if it is sound and even more if it points
to the utter destruction of capitalism as we know it. Capitalism is natural so
it might have to proceed in spite of government. Thus, we need some new models
to inspect so as to judge the impact of massive government spending on our
financial futures. California New York Europe to inspect
and hopefully learn from their mistakes or advances as some are on the brink
and now are in open revolt against the EU and IMF.
New ideas:
There
is an impressive article today in the Jerusalem Telegraph on debt [that
references the international expert on economics Ambrose Evans-Prichard quoted
in many of my blogs] concerning currency interest rates and how several
countries in the EU are crashing and may be forced to default:
“Europe's small, debt-strapped countries
could follow the lead of Argentina Greece Iceland Friday, 18 December 2009 10:49 [Emphasis is mine in
all quotes.]
As
my first cranial neuron sparked upon reading this, driving me into a fleeting
moment of disdain and threatening my usual reflexive response on economic
heresies, an illuminating lightning bolt walloped me and conveyed the
interesting notion that they may have the
solution to a lot of problems, at least for some of them. Notice that the ‘them’ also includes ‘us’
in the ensemble of entities we still refer to as the United States
The maladies and
remedies explained:
“"The European Union and International
Monetary Fund have told them to replace private debts with public obligations, and
to pay by
raising taxes, slashing public spending and obliging citizens to deplete their savings.
Resentment is growing not only toward those who ran up these debts . . . but
also toward the neoliberal foreign advisors and creditors who pressured these
governments to sell off the banks and public infrastructure to insiders."—Quote
by Economist Michael Hudson in EU/IMF Revolt
Part
of the reason is that only some EU countries are in the tank and that stems
from the silly nostrum that one currency and one
interest rate can accommodate, with fairness, some two dozen countries with a
myriad of different problems. This, too, as we can easily establish, applies to
our 50 states in the US
So,
what are we doing? We are following most of this rabid scenario by spending
money we don’t have and promising the low class that we will ‘tax the rich’ to
pay for what they get all the while not
mentioning that the ‘rich’ people’s defined incomes now plunge down to below the
median income of a person at $31,000 or about $41,000 per household. Indeed,
when you inspect only the top half of
the people who pay federal tax [only 60 million out of 120 million US workers
with a total population of 302 million] you view a current tax liability of
some $346,850 per
federal taxpayer counting consumer debt but when Social Security and Medicare are
intercalated we arrive at a nifty $1,577,033. We can never pay this off.
This is not going to
work out well as anybody but a Methodist, a drug addict or a liberal can see.
So, we need to look for alternatives.
“"Greece Europe 's monetary union
to defy Brussels
Inflation can
fix that quickly.
After soliciting the advice
of our most respected investor in the US
“Every country that has denominated
its debt in its own currency and has found itself with uncomfortable
amounts of debt relative to the rest of the world, in the end they inflate,” Buffett explains. That becomes a tax on everybody that has fixed dollar investments.”[11]--Buffett Sees Massive
Inflation to Handle Staggering Debt.
Monday, May 4, 2009
By Dan Weil [Emphasis is mine in all quotes]
Alternatives:
“Evans-Pritchard suggested a similar remedy
for Greece, which he said could break out of its death loop by following the
lead of Argentina
Note
that the US China Japan
So, the game morphs into
something very different:
[1]
Debt, carefully managed now becomes desirable as the only recourse
of governments is to tax those who still have money to give to the debtors
as we see in the phony ‘Affordable Housing’ scam[12]
that has already cost us some 10 trillion dollars in lost home equity and
fraud. We have to note that those who defaulted on their mortgages do
it again, probably with glee, when we spend taxpayer monies to
refinance and adjudicate principle and interest for their benefit. The threat
of default now becomes a political bargaining tool.
[2]
Tax revenues fall because many have lost money in business and investments and
have tax credits or losses to carry forward to later years. Private investors
can carry forward and write off $3000 in stock market loses on personal income
tax returns for a few years as it now
stands. States run out of money from lost revenues.
[3]
Tax increases are currently stalled in terms of the rate of increase for
political reasons but new ‘programs’ like ‘health care’ will allow the
government to tax and tax and tax everything in sight that even resembles medicine
or one of its derivatives. The government plans to [a] cut spending on the old
folks who are too expensive to save and [b] force physicians to become
government employees and forsake the pay-for-fee system we have now. Of course,
the government will regulate salaries.
[4]
The governments will ‘pay’ for the current financial schemes by printing money
and inflating the currency. This is the popular snake remedy known as
‘quantitative easing.’ The example of Greece Greece Ireland Latvia Rumania Spain
And,
to proceed, we can do the following:
On the national level we
can:
[A]
Default on our debt to China Japan
[B]
We can print money until our external debts are zero and our goods are dirt
cheap while imports will be impossibly expensive. This is the system we used
back in the Great Depression of competitive currency devaluations that we lost
because of agricultural tariffs by our ‘friends’ in Europe .
Study the Argentina
On the persona level we
can:
[C]
Avoid taxes
at all costs and pay off debt only with inflated dollars. Thus, we need to refinance
debts such as mortgages with as long a term and at fixed rates as possible. Try
to use debt as a lever against government as in the house foreclosure scams.
[D]
Convert back to barter and trade for goods and services and practice what the
dope crowd in California
[E]
Seek investments only in tangible assets like gold or jewels or real estate
where possible noting that there is no current way to tax
these except for real estate. Avoid any
real estate that might be rent controlled or which might attract extra taxes. Expand
your houses to accommodate extended families.
[F]
Invest in stocks that are able to raise prices at will as the economy crashes
such as Proctor and Gamble, Wal-Mart, Chevron, Safeway and similar
corporations. Buy gold and hope that there is no special wealth tax on gold or
silver.
[G]
If inflation roars to several percent per month then the inheritance and other
income taxes will rise to confiscatory levels in the inheritance case and max
out at perhaps 70% for income taxes so transfer’s of wealth must avoid these
snares. Plan early.
[H]
Grow as much of your own food as possible. Learn how to dry and can and store.
[I]
Try to do to the US Argentina
I
hope this will stimulate some thinking as we need alternatives to what we are
now doing.
rycK
Comments:
ryckki@gmail.com
[5] The Bubble that will Burst Higher than all Previous
Bubbles: Depression Looms as the Dollar Crashes.
[6] The Second Big Bubble: The Future of Commercial Real Estate. It May Be
Time To Move Out.
[7] The Road to Social
Success, Peace and Justice: California
[8] As Predicted: California
[9] Copulating
with Coprolites: The Unveiled Mechanism of Governance by Progressive Liberalism
in California
[10] EU/IMF Revolt: Greece Iceland Latvia
[11] Buffett Sees Massive Inflation to Handle
Staggering Debt. Monday, May
4, 2009 2:34 PM
By: Dan Weil http://moneynews.newsmax.com/headlines/warren_buffett/2009/05/04/210480.html?s=al&promo_code=7F1D-1
[12] Affordable Housing
Follies and the Intentional Corruption of Supply and Demand Economics
[13] “The Road Less Traveled: Saying No to the IMF
Standing up to the IMF is not a well-worn path, but Argentina Argentina
[14] According to Ambrose
Evans-Pritchard in Sunday's Daily Telegraph quoted in EU/IMF Revolt
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