WE might go through a 'Shock' period, but imagine how much cash would be invested back into America.

And then Imagine they cut Tax Rates as Interest rates increase, We'd have record revenues to cover OUR obligations...Real Dollars, Real Growth, Real Wealth!

New Found Wealth would make entitlement reform much easier, including Social Security/Medicare/Medicaid.

In a perfect world





 

If you define "shock" period as utter destruction of all monetary wealth held by account holders, retirees and bond holders, then yes those things might happen about the time pigs fly.  There is not enough money nor will there ever be enough no matter how you do the math to pay our "obligations" at +100 Trillion and climbing.  

The problem that our politicians seem to have is, is that they view paper/electronic dollars as actual objects with actual value.  A fiat currency in the end is a unit of work, it represents the willingness of US workers to provide equity via their hands/minds until the value is satisfied.  This is fine as long as they are will to do so, currently the average debt obligation per tax payer due to the actual deficit is $184,000 their obligation due to unfunded liabilities equals $1,086,000.00   So the average worker owes roughly, $1,200,000.00 today the average worked currently earns 42,979.00 *2011 so assuming the weer all in for every penny it would take
approx 28 years to pay the debt off if we collected no taxes or borrowed no more money.

It really is game over.  

Too many are thinking in a "logical" manner -like "engineers".



What doesn't seem to be recognized is that the .gov doesn't have to think in a structured way.

It can fabricate all the $$$ it wants -AS IT BEEN DOING FOR MANY YEARS.

There's NO mathematical rhyme or reason that we have any ability to figger out, that can even wildly predict when the jig is up for the .gov.



Or us....

Controlled Bankruptcies restructuring Debts.
Obviously, WE will lose some Faux 'Wealth' created by fraudulent Policies, which has caused $1 to buy $0.10 worth of goods/services. (somewhat exaggerated value, but you get the point)





After the Shock and adjustment, even though WE would be holding less Dollars/Wealth, OUR $1 will buy a $1 worth of goods/services; Real Wealth
It's hard to imagine today, but WE must Strengthen OUR Dollar in order to bring US back to reality.





There can't be a Free-Market when a Government controls Most of it, so if OUR Constitution means nothing, then so does OUR 'Wealth'.
Just the way I see it, and the recent Filibuster should motivate US to appreciate the most Priceless Asset, that Governments can only steal...Leaders are stepping up to defend it.
Ask the Chinese Citizens how they enjoy their Countries new found 'Wealth' & 'Freedom'...Communism/Oligarchs, where a Leader can act like a Billion people don't exist: Our Political Pimps call that 'Leverage', and that's the direction where headed towards...total Government Control.
Is all the Money in the World worth living like that?
eta



Roubini: Market ‘Shock’ Coming Later This Year
 

 

 

Here's the thing regarding the interest rates - it's not just the government debt that is a problem.  A significant portion of our consumer-oriented economy is driven by today's (artificially) low interest rates.  For example, too many people have financed their homes with adjustable rate mortgages.  If interest rates go up, they won't have the cash to handle both their lifestyle and their mortgages.  So, they will have to stop eating out every night, and will have to make a pot of coffee at home in the morning.  The restaurant sector starts to lay off people, those people stop spending, the spiral starts.  Another couple of ticks up in the rate, and mortgages become unmanageable.    More defaults, etc.  Banks start to go under.  Etc., etc., etc.  

Fuck, even a pot of coffee in the morning is becoming a luxury.

I'll add that, naturally, home prices will fall as interest rates increase, so imagine what will happen when for foreclosures are added to the mix





On a personal note, I have a sob story just like everyone, and there were times when I was bitter, filled with fear, and left crying, 'What next!!! How will I ever make it!!! Why does this happen to me all the time???'...I'm still here, WE all are, so stay Productive, Proactive, Motivated & Everything will be alright, it will be a rough ride for awhile

"Give Me Liberty Or Give Me Death!"

...'Death' doesn't have to be interpreted as Bloodshed, today Death = Debt Enslavement...Political Pimps learned that from the Mafia too


Liberty or Debt;


Liberty or Cell Phone;


Liberty or Keeping up with the Jones'





What are WE really 'Scared' of?
 
 

This what sucks.(zero interest) Poor people can't save money anymore. Money saved is money lost. They don't have the means or knowledge for serious stock investments. Meanwhile the Banks buy up the cheap dollars and pump it into the stock market. I don't care if the rich get richer but the game is being rigged more and more by the Gov and to big to fail business while we get zero interest on our savings. But hey I can get a 2.75% rate on a $50,000 car!

 

'From My Cold Dead Hands' doesn't describe a Rock...





WE still have OUR Constitutional Rights, and a 'Reset' would lead US back to the Basics that made/makes America Great!!





WE might be Confused, Lazy & Spoiled as a Nation, but I don't think WE are prepared to Commit mass 'Suicide'...
eta

I forgive your moment of 'Weakness'....HOKIE STRONG!
 

Questions I have had and would really appreciate thoughts on:
What would cause interest rates to rise besides the Federal Reserve ending the policy of quantitative easing?
What would the current interest rate be if the Federal Reserve Bank was not engaged in QE?
Can and will the Federal Reserve Bank cease QE?  When, or why not?



Thanks!

Hello jchewie,

Go to page 7 of this YASBY; you will find my best answers to your questions there. Also be sure to click on the links and lend objective consideration to the words of Mr Yastrow and President Bush.

"The T$PTB know that, at this point in time in their fight to stave off a potential Super-Depression, market performance is a line that must be held by all available- and every conceivable means"

QE will not end anytime soon, but instead of buying bonds it will be used as a tool to make Federal 'payrolls' or interest payments on loans




When the Bubbles Burst, Global Stocks & Commodities, will be when WE realize how ineffective/irrelevant the FED has made themselves.




QE's purpose will change, as OUR Deficit increases, the ECB starts their own Easing to bring the Euro lower and starts handing out 'Mulligans' to European Banks.
Since, the only way to get real dollars investing back into America, interest rates will have to increase, and Assets will painfully Deflate.




Forcing the Federal Government to shrink.




They can't Print Money forever to buy 'stuff', and if they could, why are we paying mortgages, car loans, etc.?; Shrink or Anarchy




The Dollar should be used as a 'Confidence' builder, where real Wealth will slowly be realized.




My guess, Interest rates would be higher than 3%.





I've heard many ways that will get our economy working again, i.e. Energy (Nuclear, Fracking, Oil), Nano-Solar Tech, even Virtual Tech, but somehow I think Manufacturing will make a comeback, within 10 years.
Globalization is Failing, so the dangers are a Protectionist stance by
all the players; Who wants to give up their Sovereignty?

Why War could be used to 'Forgive' Debt, or a distraction; Remember, Bush named the 'Axis of Evil' long ago, I think for a reason.
The Free-Market will demand a Strong Dollar, since it's still the Globes 'Gold Standard'.





I'm no expert, but that's how one scenario could play out.
 
 
 
 

I appreciate your optimism, but as someone deep in the manufacturing support industry (for 20+ years), I can state categorically that this is not realistic.  If those things which have been killing manufacturing were to somehow reverse-toggle to 'favorable' today, that 10 year horizon might be possible.  Unfortunately, the momentum and TPTB are still working against us.

That has already changed. The only countries using the dollar as the reserve currency still are our very strong allies. The rest of the world quietly started using individual currencies. It is part of the reason Germany is taking their gold back. The dollar is rapidly losing status.

Older article from December, but still good.





















































































































































































 

If everything is based off of & everyone utilizes Gold the US Dollar to dictate pricing, why would you just throw it away?



Until WE lose a War, anyone attempting to depeg from OUR Dollar will only cause great pain for their Nation, i.e. Hyper-Inflation.
Globally, America still has the Upper hand, and still causes others to react to OUR moves.



Currently, it may not look that way, but WE are ahead of the Game compared to the rest; They have some catching up to do.






eta


Why the Dollar is Today's Currency Darling
                               



The Only thing not in a Bubble yet...the Dollar






 
 

Tough to argue, but in 10 years TPTB will be long gone, and I think 2014 may go down in History as The Greatest Awakening Ever; Of course I thought Obama would lose in a landslide





The way my eyes were opened to Bush's Destructive Policy, Obama supporters are beginning to open their own.

2014 = Fire the Old Guard!

Let's focus on and manifest voters turning out to Fire the Traitors





 

The Fed has painted itself into a very small corner with radioactive paint and in the process destroyed the vast majority of Americans financial futures for decades to come. Think of it this way: Currently, the Fed is buying virtually all of the longer term Treasury bonds (after giving the primary dealers their cut off-the-top, of course) and a majority of the medium term ones. So, since the cost of borrowing to fund a voracious spending habit has been held artificially low as a result, the useless dregs in DC have responded by ordering flank speed on the spending Titanic. Typically, the cost of borrowing to the feral government has averaged around 5%. We're already at the point where 42 cents on the dollar are borrowed, with 5% interest rates, that would accelerate the death spiral to around 60 cents. So the Fed <MUST> keep interest rates low. IF (and that's a really, really big IF) the "published" inflation rate starts climbing precipitously (e.g. double the make-believe number they currently put out), then the Fed could NOT stop QE as they would normally to counter the inflation uptick because interest rates would revert to the norm as well. That, of course, would torpedo the .gov's financial position causing the dreaded "RISK" to be associated with US treasuries, a possibility which cannot be allowed under any circumstances - otherwise the world economy, not just ours, goes into the crapper simultaneously. But, if interest rates DO rise, in spite of the Fed's meddling, guess what? All those long-term T-notes that they bought become worth a LOT less because they will pay less interest than what could be obtained by buying "new" notes at the higher rate. So, guess who gets to eat that loss? Yep, you the taxpayer. Oh, and btw, that means that the Feral .gov has to borrow MORE money to cover the losses associated with that. This is why if the Fed balance sheet goes over about 5 large, it's essentially a death sentence because the eventual losses would be terminal. So, worst case, the choice is an unstable asymptotic increase in inflation, or selective collapse of the economy.

The longer the Fed maintains the artificially low interest rates, the more they will destroy both the real economy <AND> the future financial stability of everyday Americans. Why? Because pensions of all types are based on interest rates. As interest rates are held artificially at zero, the amount of money required to pay for a pension in, say 30 years, becomes almost as much as their current salary, given inflation as what it is. The vast majority of the pensions have assumed the 50-year rate-of-return of 8% as their actuarial basis for determining how much money to put away to pay for future pensions. The last decade has shown that that is not reasonable. Some financial "experts" claim that retirees should be taking money out of stocks, bonds, and other "risky" investments and buying "guaranteed" annuities. How, exactly, are the companies going to "guarantee" an annuity if they are unable to get more than .25 percent interest on "safe" investments? They can't. They will go broke just like Lehman, AIG, and MF Global and those "guaranteed" annuities will be toilet paper. Further, both people and businesses are making massive malinvestments due to interest rates being artificially low. This is why a lot of companies are borrowing money even though they don't need to, because they can get it for so cheap. Yet, since they are holding on to cash because of the level of uncertainty in the economy, the total level of debt in the system is higher with NO corresponding increase in business activity (such as hiring, expansion, etc.). Finally, individuals are borrowing more, primarily for student loans and credit card debt, which are both exceptionally bad methods for "stimulating" the economy since one cannot be escaped and the other only pulls demand forward leaving a gaping hole in future demand. Savers are being destroyed because there are no low-risk investments that pay any reasonable return because of ZIRP. So, one of the primary reasons for the former resiliency in the US economy, the savings rate, has been decimated by a brain-damaged academician and his malevolent policies.

The Fed cannot extricate itself from the QE paradox it has created. This is the moral hazard that most people with a clue were clamoring about when they first started discussing the insanity of QE and all the other malignant interventions. There is no viable method by which the Fed can stop QE completely without causing (a) a 50% correction in the stock market since the Fed money has been the only levitating force since QE began (b) a TBTF bank to fail which would create an instant cascade failure of the top 5 because of derivatives (c) drive the feral government into actual consideration of selective default because a 3 point rise would make the sequester look like a rounding error.

Well, that's the good news. Now for the bad....

You can ask why. But the fact remains that most of Asia among themselves and mst of everyone who buys oil from Russia are no longer using dollars to do it.

Having spent 2 years living right by the Gatun Locks, I'd really like to go back and visit once the new Canal is done.

Oh, and this project was funded by the Chinese.

WE are are Selling more domestic oil, than buying.




We don't have a Supply Problem, so Why haven't Gas prices come down?




A: Oil Prices are directly influenced by the Strength/Weakness of OUR Dollar.
The Russians, as well as all oil players, love OUR FED's dollar policy, their Oligarchs are instant Billions thanks to a Weak Dollar.




It doesn't matter what they use as a form of barter with other Countries, their selling price is based off what the US Dollar is priced at.
What happens when the Dollar Strengthens, and their Profits shrink?




That's when the real problems begin, especially with our new found 'Allies'
One big chess game going on, and a dangerous one at that.






 
 

 

Currency debasement hurts all but those on the first levels of the counterfeit scheme.  The government gets to spend more "valuable" dollars.  Then the one's those dollars pass to still do pretty well spending it on assets,  but as the greater dollar supply trickles down to the merely affluent, middle-class, and poor its full devastating effect is felt.    So in these fraudulent schemes political classes and oligarchs do well and become bigger and more wealthy, the middle-class and poor both get poorer.  

We're Wiping Out The Savings Class Globally, To Terrible Consequence

"I own the dollar, not because I have any confidence in the
dollar and not because it’s sound – it’s a terribly flawed currency –
but I expect more currency turmoil, more financial turmoil.
During periods like that, people, for whatever reason, flee to the U.S.
dollar as a safe haven. It is not a safe haven, but it is perceived that
way by some people. That’s why the dollar is going up. That’s why I own
it. Will I own it in five years, ten years? I don't know."
This helps explain why I think the Dollar will be 'forced' to strengthen.






They've printed for 'negative' growth, with more & more people are realizing it each day, especially watching their savings disappear.






They can't buy bonds forever, and OUR Government will need to borrow those 'sidelined' Dollars; Higher Interest Rates will make that happen.
ETA...I found this to be an interesting discussion:
Peter 'Dollar Demise' Schiff Versus John 'Dollar Reprise' Mauldin

 
 

 


 

A CNN weekend article at yahoo finance about the middle class.  Something we have seen over the past few years, they now write a single article about.  The CPI is unable to take into account product size reduction and same pricing to it's predecessor product.



http://finance.yahoo.com/news/middle-class-expenses-grow-faster-111900178.html;_ylt=AmtqzQ21YytTlHBizSYgPuWiuYdG;_ylu=X3oDMTN1bnFjdTc4BG1pdANGaW5hbmNlIEZQIE1lZ2F0cm9uIDIEcGtnAzAzODU0NTVjLWZmYmQtM2EzMi04NjlhLTZmMjEyZTAxYmE5NARwb3MDMQRzZWMDbWVnYXRyb24EdmVyAzYxMDgyYzAzLTg1YjAtMTFlMi1iMmVmLTk2NTFlZTdhMzc0NQ--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
 

Another symptom of the...

"The Engineered Destruction of the Middle Class"

It can only get worse.

Unimaginable...


•Greece may still have to quit euro...





•Germany's anti-euro party is nasty shock for Merkel...
 

Not really.  The Euro was born with too many birth defects.  

So right now I've got about $1,500 in a savings account with no other assets. I know savings accounts suck as investments, but I'm keeping it liquid because I intend to spend it on school in the fall. Every paycheck I keep $500 to hand in a spending account and have been rolling over the excess into the savings account. Presuming there is a market correction, how badly will I get screwed, and should I move my money into other avenues? As I said, I've purposely been keeping it liquid only because I'm holding it short term, but if we're going to see inflation as badly as predicted, chances are that by fall tuition will probably have inflated too beyond the current value of my savings, correct?

You are talking months?   I would keep it liquid.  There isn't going to be a sudden spike in tuition cost.  

 

Is it wrong of me to want to go out and finance a really fancy sportscar at 2.5% even though I know that the Game is rigged, the horizon is really dark and gloomy and my buying a $50,000 car at <3% interest with virtually no collateral or downpayment is exactly how we got here?   :D

Seriously, at this point I kind of feel like saying "Who gives a F?" and throw caution to the wind!

As a Dad, seening this boy in the photo is...  very sad.  

Sometimes I think major news networks should post a random photo from the Holocost on a weekly basis - but I know they'd tell the story wrong anyway.  

 

http://www.ar15.com/forums/t_1_5/1453038_11_2_Ounces.html















 

It sounds crazy, but long term debt with these 'record' rates might be a very smart move.

Just don't go crazy





People are getting nervous again...


Strong Dollar Is Flashing a Warning Sign for Stocks
 
 

I heard on the radio news yesterday that the CPI dies not take into account smaller portions of products.

I don't know why they bother to spend the time computing it.

Keep the sheeple calm.

For the record, that's not from the holocost.  That was from Stalin's plan to starve Ukrainians...

 

So a few more anecdotes on inflation.

Our modern CPI calculation is so aberrated it's useless.  Ironically there are those at the Fed that would like it adjusted yet again, because they feel it resolves an erroneously high number.  In other words, should be lower.  

Just learned,

Co-worker received termination / layoff notice today.

He was similar to me, but I have some tasking for now. I was out today for my children's school event, but I have not received a "meeting proposal" as he. He seems to think they had more than just his notice, as HR had a meeting room set up and seemed as though they had business to see to, but he didn't see anyone else.

Sigh...

I think this is mostly just them taking advantage of the circumstances (sequestration) to reduce the overall number of staff. But there does seem to be very little work to be had.

Can't say who I work for, but it is DC area federal govt contract type work.

I know there is a sense here that reducing the Govt spending is a good thing, and I agree in general, but there are those who will be directly affected by reductions, especially if they are done with an axe and not a scalpel. I believe so far it is the former. With optimism, I believe he and everyone will be OK. But I think there are more layoffs coming.

Remember, a recession is when your neighbor loses his job; a depression is when you lose yours.

I have not been grocery shopping for almost a year until I went yesterday with the wife at a large regional chain store, only to see $6.50 a pound chicken breast, 3 dollar a pound tomatoes, and 3.99 for six store brand English muffins...   Peanut butter is about 1/3 more than what it used to be.  Repeat ad nauseum.  Place was absolutely dead at 630 pm, too.

The things I had in mind to purchase, I found something else.  The only thing that was still at normal prices for this time of year was bananas at 45 cents a pound.

Update.

Thirty three people were given termination notices.

Seems I survived - for now.

Keep saving and stocking up... You don't have to be a slug to get let go these days.

Just don't forget to live as you prepare yourself mentally and financially. It's not the end of the world if they let you go. I used to tell people after big layoffs at my old agency that "they don't put a bullet in your head after they walk you out".

Very good point.  There are a lot of personal SHTF occurring these days.   The world doesn't have to come unglued for it to be a SHTF event, just YOUR world.  

Good news, but start looking at your options.   Prepare like your's is coming tomorrow.  No one is truly secure in this economy, and the ones who act like they are, are usually the ones most devastated by change.