Debt Levels Rapidly Mounting

Dear Mister Martensen,
I Try to write in English wich i don’t manage very well;

I have a problem with the very definition of money. I think that we must clearly distiguish between "money"=central currency

and the amounts of credits wich the banks can lend et the citizen can borrow!

Following my idea, i do not believe that credit is money in any way!

The borrower buys the thing that the creditor does not buy. in this way, it is totally impossible to "create money" via bank credits.

The account of all debts + the account of all credits = 0 in any time.

Therefore, the volume of purchasing money cannot grow by this way!

The only way of growing money remains the printing of banknotes by the central bank! 

[quote=Headless]
Sam said:

"However, I find it hard to believe that all the banks will cancel all mortgage debt and credit card debt. If that were even a remote possibility, I would expect that millions of folks would be running around charging their credit cards to the hilt and mortgaging themselves to a fare-thee-well."
You've probably seen this Sam; it speaks to your if-then:

http://www.youtube.com/watch?v=T2fVqDzjVis

At least one guy is apparently thinking that those cards will never need to be repaid.

 

Edit: If that wasn’t entertaining enough: http://www.youtube.com/watch?v=MoAyBb8D5GU[/quote]

Good Grief! If this is an example of an average American, I’m moving to another country tomorrow!

Good Grief! If this is an example of an average American, I'm moving to another country tomorrow!
I would much rather have this guy breaking crap and getting attention than the millions of people sitting a home watching the latest garbage on TV without a care in the world about the Economy or the loss of freedom occurring in our country.  He may be rude, and a total redneck, but I'm glad we have people like him who care no matter how they express it.

– Rob

Personally I like the way he turned off his TV. Maybe if everybody turned their TV off like this we would have a real world that makes some sense not to mention being happier with each other. I haven’t laughed this hard for along time. Thanks for that link.

 

Sam - I thought the same thing! I turned the video off, right after the brief silver scene. What a winner! And these are the people we have to compete with in the future?

On another note: It could be my imagination, but everything I read seems to indicate the next big "something" is right around the corner. It’s hard for me put into words, exactly, but maybe things are about to come to a head? California nearing total insolvency, Lots of people looking for the end of the market rally, and I noticed that Chris has been posting something nearly every day, even for us ‘freeloaders’.

 

 I’ve been reading the blogs for a good year now. 3 hours a day, everyday. I have never seen this much aggregate out there. I can’t find couldn’t buy if I wanted to any positive news.

Now thats an extreme bearish sentiment reading if I ever heard one. Expect the markets to soar!

Took the words right outta my mouth, JAG.  Then again, my last little remaining position in the equity market is a short…

Viva – Sager

Tx_floods said:

"It could be my imagination, but everything I read seems to indicate the next big "something" is right around the corner. It's hard for me put into words, exactly, but maybe things are about to come to a head?"
I expressed the same sentiment to my republican roommate last night after I unwillingly realized the true meaning of the "Record Bonuses at Goldman Sachs." That is to say, I told my roommate (a native New Yorker) to expect truck bombs at various Goldman Sachs buildings within the near future. There is no way that this kind of middle-class sacking can continue much longer without someone--in truly righteous fashion--striking back in response to the destruction of innocent lives that Goldman has brought about. It's a matter of time. Period.

I, unlike you Tx_floods, have no problem ennunciating–aloud–"words" about what exactly is about to "come to a head."  I, for one, will feel a little closer to what I use to feel about being American when someone finally initiates the cascade of just actions that have been grossly neglected for far too long; "too long" being more than 75 years according to Mike Taibbi (http://zerohedge.blogspot.com/2009/06/goldman-sachs-engineering-every-major.html).

I’ve been railing about Goldman’s crimes for years now, only to encounter dumb stares. It’s about time this stuff has made "the big time." I think Rolling Stone is the perfect venue for this type of expose, since that type of readership is impressionable, needs a cause, and will react in ways that those of us who are law fearing won’t: let the hunter-gatherer, flight or fight response solve the now near century-long problem that our purported democracy has had no effect against. There truly is no other solution for this problem other than plugging the wholes in the sinking ship with the carcasses of the rats that gnawed the wholes in the hull… 

Wow this guy is the spitting image of one of my friends some years back, one who also had a love of destroying assorted crap, though usually with bullets (he didn’t have an accent though).  But what I really thought was amusing and twisted was seeing that this guy is probably far better informed than the average American

  • Nickbert

"Just curious - if you really believe this will happen, why aren’t you out there maximizing your debt?"
Timing mainly.  As sure as I’m certain it will one day happen, I’m not holding my breath about the event ocurring any time soon!  In fact, what bothers me most about this coming perfect storm is the uncertainty of it all.  What will happen?  When?  In what order?  How can you plan anything when you know nothing about coming events, with any certainty?  So, I’m reducing my debt burden as fast as my wife can make the money!!  And to put my cards on the table, we are paying our tiny mortgage at double the financial institution’s required rate.

"I suspect they’ll only forgive the deadbeats."  Well, we’re all deadbeats really, I mean we collectively went along with all this bullshit, myself included, for way too long. In the end, the funds to repay simply won’t be there, and that’s that.

Mike

To put the swine flu into perspective, I heard tonight on the radio that 1.2 million people die in car crashes annually…  just imagine how much worse the population bomb would be without cars!
Mike

I am chiming in as one still learning, so take it for what its worth as always.
Re: Swine Flu

You are absolutely right IMHO, Mike,  it is a diversion but the problem is that it is still a pandemic.  It is 3 times more infectious than seasonal flu (3 times as many people will probably get it per most authorities I have read) so even if fatality rate is same its still 3 times as many people getting sick and dying in addition to season flu.  If CFR goes up then one can do the math. In my region (New York) it still a nasty bug-a 15 year old just died in Buffalo region and they’ve got another little kid with it on a vent. http://www.recombinomics.com/News/06220901/H1N1_Buffalo.html  Of course people die everyday from many diseases but still…

CDC estimates a million cases in the US so far  http://afludiary.blogspot.com/2009/06/cdc-estimates-1-million-americans-with.html .   In Australia the swine flu has overtaken seasonal flu (many more swine cases than season flu among more serious cases). http://www.bloomberg.com/apps/news?pid=20601202&sid=a6hwRhROldwI 

http://afludiary.blogspot.com/2009/06/categorically-speaking.html-Shows info that gov thinks CFR for swine flu, while much lower say worst of 1918, still higher than seasonal.

A lot of this information is sourced from Avian flu diary, a reputable flu blog and they have links to WHO, CDC, etc…It will be back in the fall in all likelihood, hopefully milder (that is still a possibility) but maybe not.  I agree though, MSM and gov is using it to deflect from the economy.  But I would not throw baby out with said bath water yet.

Avian Flu Diary

 

Re: Debt repayment

I am hearing from a few people who are truly broke that the credit card companies are now coming after them in court.  Two folks I know who have nothing are being taken to court.  What do the credit card companies want?  What is it they think they will get?  Are other people seeing this?

 

Regards

D

 

 

Ladies and Gentlemen, we are heading for Force Majeure at an alarming rate.  Force Majeure, will lead to a bank holiday that will lead to the ruin of the dollar and potentially martial law.
Remember this phrase "Force Majeure".  If it is called it will happen at 12:30 after Europe and Asian markets are down and most people are at lunch.  If you hear this called, get to your bank ASAP.  Get the maximum amount of money out and get to the stores and get canned food, get gasoline, get dried food, get more propane for your grille and water.

Once people hear of this and the MSM explains it to the population that night you will have a run on the banks and the grocery stores over the next day.  Assuming the banks will be open, get them maximum amount of money out again the next day if you can and hold it.  The third day, the banks and markets will most likely close and bank holiday will set in for a period of time.

In my opinion, if utilities (water, natural gas, electricity) are maintained at a reasonable level:

If this bank holiday only lasts 2 weeks and utilities are maintained in general, we should see stress but no major upheaval.  I only say this due to the reasoning that most people have about 2 to 3 weeks with of food on hand and if you have water to drink, a normal way to cook food, and electricity for our toys we should be fine.

If this bank holiday lasts 3 weeks, signs of stress will start.  People will start to get hungry and more desperate but with help from local food banks and community support we should get through it. Rioting in major cities will start as people get hungry. 

If this bank holiday lasts 4 weeks, signs of stress will turn into much more crime and desperation.  I do not believe a complete unraveling of society but in some areas this will start and riots will begin for food more wide spread into the Burbs and smaller cities.

If this bank holiday lasts 5 weeks or more, desperation will be common, riots and looting for food will become a norm.  Society will be to unraveling  and with each day it will exponentially get worse and worse.

In my opinion, if utilities (water, natural gas, electricity) are NOT maintained at a reasonable level:

If this bank holiday only lasts 1 weeks, we should see stress but no major upheaval, except in major cities.  I only say this due to the reasoning that most people have about 2 to 3 weeks with of food a on hand  and having about 0.5 to 1 weeks worth of water on hand.

If this bank holiday lasts 2 weeks, major signs of stress will start.  People will start to get thirsty and ill due to sub standard water they may be drinking but with major help local food banks and community support we may get through it.  Rioting in major cities will start as people get hungry and thirsty. 

If this bank holiday lasts 3 weeks or more, desperation will be common, riots and looting for water will become a norm.  Society will be unraveling and with each day it will exponentially get worse and worse.  Illness due to sub standard water will become common.

These are my general opinions but depending on the area will depend on the time frame.  If you are in a hurricane area and have preparations for disaster than you will have longer time frames.  If you are in more rural communities where you have wells and are more disconnected from the grid you will have much longer time frames if not being sustainable at a reasonable level.  If you in the inner parts of our big cities with no preparation, you may have much shorter time frames (think Katrina in all cities in the USA).

For what it is worth, I hope this helps and it may give you something to think about.  Perhaps the question: How long do you think your area will hold it together before an unraveling of society?

And just who are those "deadbeats" who are not paying their debts?

"Is a Democratic administration and a Democratically controlled Congress presiding over one of the most regressive wealth transfers in history? Roosevelt Institute Braintruster Marshall Auerback investigates.

State and local governments have been forced into draconian budget cuts, firing workers who are among the most reliable in making their mortgage payments–when they have jobs: firemen, policemen, teachers, civil servants.

Yet the Obama administration won’t spend even a small fraction of what it has wasted on the banks to cover state shortfalls. The guarantee of $5.5bn in short term notes for California was deemed to be fiscally irresponsible, yet hundreds of billions have already been allocated to the likes of Citigroup, AIG, and Goldman Sachs, all of whom have already beefed up salaries and bonuses as they emerge from the embrace of the federal government."

Risk of major social upheaval likely if bank bonanza continues

 Hello Denise: Thank you for that link. I honestly can’t decide what to think about h1n1. The infection rate makes reminds me of the first wave of the 1918 flu. I find the Baxter faux pas mind boggling, and every time I read about the genetic composition questions it makes me take pause. I have no idea which way it is going to go, but it is one of those blips on the media radar that I think bears watching.

 mpelchat,
Can you provide some sources for your belief in a coming bank crisis? I’m heeding and appreciate your warning, but I would like to evaluate the sources of tis information for myself. 

Thanks

Hello Jeff,
I am taking the philosophy of "hope for the best, plan for the worst" in this submision.

I get it from the following:

1) This article;

http://thecomingdepression.blogspot.com/2009/06/bank-holiday-coming-prepare.html

  1. A project called "Web Bot" that predicts coming events.  A good explaination is on teh Urban Survivalist site at the bottom of the page. http://www.urbansurvival.com/

The latest analysis is talked about on this radio show.

http://www.journeyswithrebecca.com/archives_09.html

Download the Cliff High interview.

3) Gerald Celente predictions for 2009

https://peakprosperity.com/forum/gerald-celente-2009-predictions/11669

4) Peter Schiff prediction for 2009

http://www.youtube.com/watch?v=9h2x7R8pxUs

Taking the information above plus what the government is doing with all the legislation as well as teh biggest budget in history and taking the worst case senerio view, it looks like we are looking at a Bank Holiday around mid September.

Can this be stopped, of course but I just can not see it right now.  I am hopeful that this becomes a deep W recession but for my family, I want to be ready for the worst case senerio. So I have thought of what could happens with a bank holiday and when to "bug out".

I am looking forward to seeing your views for the above information.

 Thanks mpelchat, I will definitely check out your links.

Hello All,
Statements such as the Federal Debt is $17,789 per person has never made any sense to me.  To pay that amount off, a Bill Gates or Warren Buffett would say "take it out of petty cash and don’t bother me with trivial matters again." while a part time minimum wage earner might get deeply depressed and say that can’t be real.  There is no way I can pay off that amount.  So what is a reasonable number?

I went to http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm for my debt data.  There is a link on that page for the revenue data I used. 

Over the years, I’ve been following and plotting a debt to tax revenue factor of National Debt over Federal Individual Income Tax Revenue under the assumption that for every dollar I pay in taxes, the Federal government has x number of $ of debt in my name.  I don’t use corporate debt because that debt is paid through my purchasing of their products and services. 

In 1979, the above ratio was 3.79 while in 2008, that figure rose to 8.75.  This means that if someone paid $5,000 in 2008 Income taxes, there would be 8.75 * 5,000 or $43,750 of debt in that person’s name.  To me that’s a more realistic number.  The ratio will be a lot higher in 2009 as revenue drops and the debt increases.

Also note that the amount of debt has increased by a factor 2.3 since 1979.