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US Government Shutdown Should Be Permanent

October 2, 2013

www.helpfreetheearth.com

Should we cheer or boo the US Government shutdown?

There's nothing to cheer about. Why? Because the shutdown isn't permanent and centralized government is not going to be erased from the face of the planet.

The only people to ultimately suffer from the "temporary" shutdown will be average citizens. The sheeple may be ignorant and blind, but no one deserves the hellfire that will rain down on America if a shutdown continues for an extended period of time. 

IT'S NOT ABOUT OBAMACARE

The shutdown is not because Obamacare is on the table.  Obamacare is just a distraction.  No, it's about the U.S. dollar.

Obamacare is designed to fail.  Anyone with any financial or mathematical sense could look at the real national debt and deficit projections of the U.S. and understand that there is no money and never will be enough money to fund universal healthcare.  The GOP could simply let the program take effect, sit back, and watch it crash and burn over the next three to five years.  This would entail, watching the whole US economy crash and burn with it.

What is developing right before our eyes is the recipe for a new false paradigm.  Already, the MSM is discussing the possibility of debt default and who will be responsible under such circumstances.  Not surprisingly “Tea Party” conservatives have been named the primary culprits if a shutdown goes south; even former Democratic president Bill Clinton is getting in on the blame game:

http://abcnews.go.com/blogs/politics/2013/09/bill-clinton-when-it-comes-to-obamacare-gop-begging-for-america-to-fail/

Let's look at the bigger picture.  The private Federal Reserve Bank has just announced to much surprise a complete reversal on its suggested QE “taper” measures, resulting in a shocked and confused marketplace.  If the U.S. fiscal system is stable and sound, as the Fed has been suggesting for the past year, then why continue stimulus measures at all? 

Could it be that most if not all positive economic numbers released by the Fed and the Labor Department are actually fake? Could it be that investors have been duped into assuming overall growth when America is actually in an accelerated decline?  Wouldn’t that be a high speed excrement storm straight out of left field!

The first day rally over the Fed announcement faded quickly, resulting in a slow bleed of the Dow ever since.  The magic of Fed stimulus is wearing off, and the investment world is not happy. This large scale budget showdown distraction over Obamacare is designed to take our attention away from the greatest currency implosion in the history of the world.

This government shutdown is a sizable threat to the American financial system, and few people seem to get it.  Perhaps because the expectation is that any shutdown would only be a short term concern.  But if “gridlock” continues for an extended period of time, then the U.S economy will experiencea renewed crisis.  Here’s why:

THE BLACK HOLE

Obamacare only tops a long list of already existing “unfunded liabilities” (otherwise known as entitlement programs).  These programs are not counted in the government’s official calculations of national debt or deficit spending, but they cost taxpayers money anyways. True deficit costs and national debt costs expand every year without fail.  If the debt ceiling does not rise in accordance with this exponential debt, a default is inevitable.  No amount of increased taxes could ever fill the black hole already created by negative government spending.

A long term government shutdown will eventually require cuts in entitlements, if not a total overhaul of certain aid programs.  Imagine an end to all disability payments, including veterans disability payments.  Imagine federal employee pensions put on hold for an undesignated period of time.  Imagine food stamps placed on hiatus for 50 million people.  Imagine how many states now rely on federal funding just to keep municipalities from bankruptcy.  Get the picture now?

THE LIES

Reuters is attempting to twist the fundamentals surrounding a default !

In a disgusting display of propaganda, media outlet Reuters has released an article claiming that, default or not, Asian investors and central banks are “hostage” to U.S. debt:

http://www.reuters.com/article/2013/09/29/us-usa-debt-asia-analysis-idUSBRE98S0GY20130929

Their argument revolves around the lie that Asian investors believe an American default to be “unthinkable”.  Surely, the unnamed Japanese investment source they cite as an “insider” truly represents the whole of Asia.

The reality is, the Asians (the Chinese in particular) have been preparing for a calamity in the U.S. Treasury market for years. Most foreign investors in U.S. Treasuries have converted their long term bond holdings to short term bond holdings; meaning, they are ready to liquidate their bonds at a moment’s notice.  Overall purchase levels of treasuries are either static, or falling depending on the nation involved.

China has been internationalizing its currency, the Yuan, since 2005.  China has opened Yuan “clearing houses in multiple countries to allow faster convertibility of the Yuan, quietly supplanting the dollar as the world reserve currency.  These clearing houses now exist in London, Hong Kong, Singapore, Taiwan, and Kenya.  The Federal Reserve and international banks like JP Morgan are heavily involved in the internationalization of the Yuan.

The assertion that Asia is somehow hostage to U.S. debt is a lie beyond all proportions.  In truth, the U.S. economy is actually hostage to Asian holdings of U.S. debt.  A call for a dump of U.S. treasury bonds by China, for example, in the face of a U.S. default, would immediately result in a global chain reaction ending in the destruction of the dollar as the world reserve currency.  This is not speculation, this is mathematical fact.  China is not going to sit back and do nothing while their investment in U.S. debt quickly disintegrates.  Why would they take the chance when they could could just sell, sell, sell

SHUTDOWN VICTIMS

Non-essential personnel (which apparently includes Obama’s maids), will be the first to receive a pink slip from the federal government.  Extra Pentagon staff, EPA staff, FDA staff, IRS staff, etc will all be cut.  Good riddance.  But what will follow will not be so pleasant.

If a shutdown stretches for months, expect cuts in all support programs and entitlements.  Veterans disability checks, social security, Medicare, employee pensions, even the Postal Service is likely to undergo defunding.  National Parks, and schools that receive federal aid will discover immediate cash-loss.  In fact, any state or city that relies on federal funds should plan for the possibility that those funds will disappear.

Forget about military cuts. They're at the bottom of the list.

An enormous subsection of the American public is dependent on federal money.  If that money dries up, chaos will ensue. 

Foreign creditors will react harshly.  The bond market will see a haircut not unlike that given to investors in Greek treasuries.  Austerity will become an American way of life.  The only mitigating factor will be the Federal Reserve which may institute “extraordinary measures” without congressional consent to continue feeding stimulus into government regardless of whether the debt ceiling is raised or not.  Given enough desperation, the American public might even applaud such an action and praise the Fed as “heroic”.

In this situation, the U.S. would be facing a Weimar-style currency collapse, rather than a debt default.  But in either scenario, the dollar is the final target.

Unfortunately, too many economic analysts presume that the only threat to the dollar’s value is hyperinflation BUT these are the same people that quote the Fed’s crooked CPI numbers.   Devaluation of the dollar seems to be inevitable regardless of the outcome of the funding debate.

WILL THE REPUBLICANS SURRENDER?

First of all, the belief that there is a two party system is false. It's a one party system. Democrats and Republicans are holding hands behind the scenes and beholding to the same special interest groups - the "bankster" shadow government. The budget showdown and government shutdown is all theater for public consumption.

The Republican actors may surrender but even if they don’t, real damages will not be felt until after October 17th.  That's plenty of time to manipulate the public into demanding more spending even when more spending is not in America's best interests in the long term. The greatest concern, though, is whether the establishment is ready to pull the plug on the dollar altogether, using the debt ceiling crisis as a cover. That would distract people from the involvement of international banks in the overall problem. 

There is no doubt given the facts at hand that America is on the edge of an abyss.  This may be the event that will finally trigger collapse.  We’ll soon find out.

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