Ladies and Gentlemen: The US is Insolvent

A blog post Jesse submitted to his site on the 23rd.

So it's been a while. And I'm just trying to catch up with the posts here as much as I can.

Just some of my thoughts first.

This was kind of a "duh" moment for us here at the blog when President Obama said we were out of money. But this kind of statement has that inherent influence that is always carried down to mainstreet in a huge way. The Gold Anti-Trust Action Committee knew this back when Greenspan was Fed Chairman. Comptroller General David Walker of the Government Accountability Office has known about this as well. You have to wonder (at least I do) if this was politically timed for some reason yet unknown to the uninitiated. We can certainly see the fine hand of the conspirators in September of last year.

So here's the following piece from his blog: "We are out of money." Barack Obama May 23, 2009

Obama openly says what anyone with common sense has known for quite some time: the US is broke, and will not be able to honor its financial and fiduciary obligations.

The question remains how the US restructures that debt and how big a haircut the debt holders will take.

20%? 30%? More like upwards of 50% at least in real terms.

And who are these debt holders?

Anyone who hold Treasury debt obligations and financial assets, from the Long Bond to the US Dollar, and assets guaranteed by the Federal Reserve and the Treasury.

Technically the debt will be serviced and the interest paid according to the terms of the agreements, with devalued US dollars.

The process will continue until the debt is restructured and the dollar is replaced with a new dollar. This may take some years.

Didn't you just know they would spill it over a long holiday weekend?

Don't be too concerned, there will be more spin and denials after this trial balloon has been floated, and life will go on.

"Oh, that's not what Obama meant. He means we have a problem but there are the means and the time to address and repair it before it becomes too great."

People have an enormous capacity for delusion bordering on selective amnesia. Go back and read the posts on this blog starting in September 2008. Then reflect on what has been said recently on Wall Street and you will see what we mean.

We are now in the endgame of an historic credit bubble that will result in a currency crisis of epic proportions.