US now Bankrupt
The FED announced this week that they are going to print a second Trillion Dollars to fund the bankrupt Obamanation. The bankrupt US government is rapidly heading toward runaway inflation. If you are holding dollars, you have very little time left to switch to hard currency, or material such as whiskey, food, or real property.
Original Article March 18, 2009
The news report reads, “WASHINGTON – The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt.”
What that means is that the US Government is now officially bankrupt. For most of the past century the US Treasury has held a weekly bond auction selling its debts to anyone who would lend them the money. The auction price of bonds translates into the interest rate that must be paid on the money. For several decades the US Government starts by selling enough bonds to pay back the short term bonds that are due this week. Then they sell more bonds to finance new government spending beyond its means. That has worked as long as there were people willing to lend them money, people who believed that they could pay the money back by collecting taxes or selling new bonds. Holders of US Treasury bonds are private investors, international banks, and the governments of several nations like China and Saudi Arabia.
In the past few weeks the Obamanation has spent money far beyond the ability of the US Government to borrow. Investors at the bond auction are not buying the bonds as fast as Obama can print them. Investors, including foreign governments, do not believe that the US can pay back the bonds. So they haven’t been buying bonds, aren’t willing to lend more cash down a rat hole.
The announcement that the Federal Reserve Bank will buy bonds is an announcement that the government can no longer pay back its debts. The FED is the keeper of US money. This announcement means that the FED will “print” money for the US government. By “print” money it means that they will write some really big numbers with a lot of zeros on a checking account of the Department of the Treasury. The “money” just appears out of thin air by the stroke of a keyboard at the FED, but it has grave consequences for the rest of us. They are writing worthless checks from a checking account that has no money.
It is clear evidence that big money investors and other nations no longer believe that the US dollar is sound enough to pay back its debts, and in fact it is not. It means that every dollar you own and have in your account just shrank by a proportional value. It means that the government is desperate. The Titanic has hit an iceberg, its sinking fast, and its watertight bulkheads have not kept it afloat. Run to the lifeboats. Hoard food and trade goods.