Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Raising the Debt Ceiling Avoids the Spending Addiction

Politics / US Debt Aug 01, 2011 - 07:16 AM GMT

By: BATR

Politics

Best Financial Markets Analysis ArticleThe latest example of political hyperbole is that the U.S. Treasury is ready to default on its debt. An actual examination of the underlying facts is that the relative purchasing value of the currency has long ago swindled debt holder in U.S. Bonds of their promised returns. A default defined under this definition is part of the equation. Repudiation of the entire debt obligation is the real fear. Contrary to all the public scare tactics that the financial world will stop turning, the Federal Treasury has ample revenue to pay the interests on bonds and notes that come due. The essential issue is whether the new bond lenders are willing to roll over the debt that is coming due and keep the shell game going.


The late conservative journalist, Robert Novak’s favorite president was Calvin Coolidge, he is known for saying, The Business of America is Business.

The real statement comes from a speech by Calvin Coolidge called "The Press Under a Free Government" which was given before the American Society of Newspaper Editors in Washington, D.C. on January 17, 1925. The quote is really: "After all, the chief business of the American people is business." However, Coolidge goes on to say that, "Of course the accumulation of wealth cannot be justified as the chief end of existence." He discusses journalism and the thought that the business interests of newspaper owners should not taint reporting. He continues, "American newspapers have seemed to me to be particularly representative of this practical idealism of our people."

A seminal truth about governments is that they do not function as a business. Every commercial enterprise eventually needs to pay their bills, since limitless borrowing is not an option for lenders. Bankruptcy is a favorite technique for repudiating debt, just ask the General Motors bondholders. Every survivor of the 2008 meltdown knows the rules of the game are now a moving target.

The media invariably seeks to blame the Congress for bringing the country to the brink. Most narrow in on the Republican Tea party freshmen as unreasonable. Little criticism is directed towards the intransigent Democratic leader Senator Reid. The reporting by the press no longer mirrors the standards of 1925 journalism, and the government no longer represents the practical idealism of the people.

Compare the recent settlement of the National Football League lockout with the drama of the Beltway National Theater. Both purports to have a countrywide audience, but only the NFL has avid fans. The government maintains their league through fear and phony promises. Football plays a man’s sport by dedicated lovers of the game. Presidents, Senators and Congressmen prepare their playbook to defeat their opponents, the citizens that elect them to office. The NFL is a business rewarded because of fan support. The Feds are a systemic extortion racket that forces its edicts upon a depressed and financially depleted citizenry.

The reason why the NFL players and owners settled their disputes, agreed to a decade era of labor peace, and anticipated prosperity is based upon the business nature of the conference. The reality why the Federal Government refuses to end the culture of deficit spending is based upon the dictatorial appetites of egomaniacs that serve their financial masters and deceive the public in an endless cycle of staged elections. As long as the State ignores the intrinsic nature of business principles, the social government will grow the welfare dependent society, as a way to dominate their subjects.

Tragically, many people know more about the free agency signing in the NFL, than the political positions of their own representatives. No one should be surprised about this development. Government is the ultimate monopoly and does not depend upon a free market of choice. Officials see spending as growth. However, the bigger a bureaucracy becomes, the more the financial lifeblood of business prosperity diminishes.

The will to correct this core failure is nonexistent, within the federal despotic fraternity. Their talent lies in designing new transfer programs to crony colleagues and constituents, funded by taxpayer levies or inventive exotic debt instruments.

No, wonder why so many American have totally given up on the political system. Unfortunately, that withdrawal of consent alone does not eliminate the treachery of career government officials. The GOP is poised to compromise and accept a dramatic rise in the debt ceiling. Their explanation will offend the most serious and sincere reformers. How else can the incessant spending end, unless the credit card is taken away from the addicted shopaholic?

The formidable financial sage, Paul Craig Roberts uses a political argument, when he warns about the response Obama might use to defeat sound business practices, in his article; The Unintended Consequences of Debt Ceiling Intransigence.

"The US dollar could plummet in exchange value and lose its role as world reserve currency. The US would no longer be able to pay its oil bill in its own currency, and as its balance of payments is heavily in the red, the US has no foreign currencies with which to pay its oil import bill. Or its manufactured goods import bill, or any other bill.

We are talking about a crisis beyond anything the world has ever seen. Does anyone think that President Obama is going to just sit there while the power of the US collapses? He doesn’t have to do so. There are presidential directives and executive orders in place, put there by George W. Bush himself, that President Obama can invoke to declare a national emergency, suspend the debt ceiling limit, and continue to issue Treasury debt. This is exactly what would happen.

The consequences would be that the power of the purse would transfer from Congress to the President. It would be the end of the power of Congress. Congress, Republicans and Democrats alike, have already given away to the President Congress’ Constitutional right to decide whether the country goes to war. Now Congress would lose its power over debt, taxes, and the budget itself."

Any sober reader should consider Roberts’ insights. Yet, what else can be done within the constitutional Federal system of separation of powers to stop the spending binge? The house of cards can no longer support the burden of the public financing through the fractional reserve fraud used by the Federal Reserve.

The alternative is for the Treasury to issue government bonds directly to the market. All interested paid to the banking elites that own and control the private Federal Reserve needs to take a thunderous haircut. This is the only solution to eliminate the curse of compound interest paid to a criminal cartel, which holds our country hostage.

The insane spending is unnecessary. No one who rationalizes that the federal budget is sustainable can be trusted. Anyone who refuses to cut and eliminate entire agencies is perpetuating an illegitimate bipartisan regime of coercive corruption.

The convoluted mechanics that will emerge to justify a higher debt limit will be just one more insult to the hard working citizens that conduct business on Main Street. The total disconnect of the government class from the most simple requirements of authentic wealth creation is at an all time high. The reason the Tea Party movement spontaneously erupted over the unbearable taxation demands demonstrates that common sense still lives in the minds and hearts of real Americans.

The socialistic mentality that relies on government to supply physiological reinforcement for their personal inadequacies and diminished mental capacities is no excuse for national betrayal. The Capitol Dome is the most distinctive landmark in this country. The weight of the burden from all government debt is undeniable. Even a mainstream newspaper like USA Today admits that the U.S. funding for future promises lags by trillions.

"The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

"The (federal) debt only tells us what the government owes to the public. It doesn't take into account what's owed to seniors, veterans and retired employees," says accountant Sheila Weinberg, founder of the Institute for Truth in Accounting, a Chicago-based group that advocates better financial reporting. "Without accurate accounting, we can't make good decisions."

Isn’t that lack of financial reporting, let alone accountability, the forestay of the political class? Do you really think that a sensible leader in the Calvin Coolidge tradition can be elected today? America is no longer a country that conducts business. The international banksters, who peddled the debt drug to a spending addict, own the global empire. The globalists are stealing any wealth that remains in a country of junkies. The political pimps that pump you full of dependency are masters of the delusion. The overdose leads to a terminal condition. Endure the withdrawal shock now, before it is too late.

Get your own house in order. Learn how to do business without debt. There is no signing bonus in this masochistic league of the establishment’s lie and steal game. The only sport left is to cheer for an early repudiation of the illegitimate public debt.

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

© 2011 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules