S&P Downgrades U.S. Debt Rating
82The Government's Money Hole
S&P just announced late this evening that they have downgraded the U.S. debt rating from AAA to AA+ with a negative outlook. NIA is absolutely shocked by this. What is shocking is just how long it took them to make this downgrade. Just like how S&P and Moody's didn't downgrade sub-prime CDOs until the mortgage-backed bonds they held were practically worthless, S&P waited for U.S. debt obligations to reach five times GDP and for the U.S. dollar to lose 84% of its purchasing power over the course of a single decade. The U.S. was a hair away from defaulting on its debt this week if the debt ceiling wasn't raised, yet it still had a AAA rating. NIA believes that a AAA rating should be reserved for countries that have budget surpluses, low levels of debt that could easily be paid off without printing money, and low levels of inflation. The U.S. had a cash budget deficit last year of $1.3 trillion, but once you include increases to unfunded liabilities, our real budget deficit was approximately $5 trillion. Even if Americans were taxed 100% of their income it wouldn't be enough to balance the budget. It is hard to imagine a fiscal situation worse than this, but the credit ratings agencies have justified giving the U.S. a AAA rating based on the dollar's status as the world's reserve currency and the Federal Reserve's ability to monetize our deficits and debts by printing money. If it wasn't for our printing press and the world's willingness to accept and hoard the dollars we print in return for the real products and commodities they produce, the U.S. credit rating would be junk. S&P claims that their reason for downgrading the U.S. debt rating at this time is because, "the differences between political parties have proven to be extraordinarily difficult to bridge".
According to S&P, it is because our two political parties are so far apart that we weren't able to pass a bill with anything but modest spending cuts. The reality is, the Republicans and Democrats aren't far apart at all. Neither parties are serious about cutting spending and the underlying fundamentals of both their proposed bills were exactly the same. The Republicans that American tea party supporters elected to office have broken their promises to make major spending cuts and have accomplished absolutely nothing positive since entering office.
Our country just had an unbelievable opportunity to dramatically cut government spending in a last ditch effort to prevent hyperinflation. Instead, our government passed a bill to raise the debt ceiling that had no real spending cuts at all. The mainstream media tried to spin the bill into being a victory for U.S. tea party supporters due to the purported "spending cuts" that it contained. The truth is, government spending is set to rise every single year until the dollar is worthless. The $2.1 trillion in phony spending cuts are only tiny reductions to large spending increases and none of them will begin until early 2013 when we will need to once again raise the debt ceiling. Even if the government in early 2013 decides to follow through with them, rising interest payments on our national debt will mean substantially larger budget deficits than what are projected today.
Credit ratings agencies have absolutely zero credibility left and we believe that with hyperinflation coming soon, credit ratings will become a thing of the past. To capitalize on this, on May 23rd NIA suggested to you put options in the only publicly traded pure credit ratings play, Moody's (MCO). On May 23rd with MCO trading for $37.90, NIA suggested to you MCO November 2011 $35 put options at $1.98. MCO today closed at $32.88 and our MCO put option suggestion finished the day with a last trade of $5.20 for a huge gain of 163% in a little over two months. NIA is very pleased to have figured out the #1 most profitable way to capitalize on the major fundamental shift that is taking place in this industry and as far as we are aware, NIA is the only organization in the world that suggested MCO puts in recent months.
With the stock market down big in recent weeks, NIA believes that this evening's news is already mostly factored into stock prices. With the Fed Funds Rate having been left near zero for over two years, the world is flooded with excess liquidity of U.S. dollars and there is no chance of the stock market crashing like in late-2008/early-2009. In fact, the recent downward move in the stock market means the Federal Reserve is likely to soon implement additional monetary inflation measures and will leave the Fed Funds Rate near zero permanently. The GDP was already on its way to becoming negative in the second half of 2011 and if the U.S. wants to avoid a debt default later this decade, it needs the Federal Reserve to print enough money to see at least 5% annual nominal GDP growth. It's not just the Federal Government that needs GDP to grow, but most cities and states will default on their debts if GDP doesn't grow rapidly. Cities and states don't have printing presses so unless the U.S. government wants to bail them all out like the European Union is bailing out Greece, Portugal, and Ireland, it needs to create GDP growth even if that means the Federal Reserve eliminating interest payments on the $1.6 trillion in excess reserves held by banks and taxing banks who don't lend the money.
NIA prays that Americans don't make the mistake of buying U.S. Treasuries as a safe haven, as they are now the riskiest asset of all. If U.S. Treasuries rally next week, it will only be temporary and will be followed by the largest and sharpest reversal in history with a crash in Treasury prices and an explosion in yields like never seen before. Most Keynesian economists will likely forecast rising Treasury prices despite the U.S. debt crisis, because they claim the bond markets in other countries are tiny compared to ours and there simply is no other place to park safe haven money. In our opinion, there is no reason to own the fiat currency denominated bonds of any country or company. Gold and silver are the only true safe havens and it is our belief that by the end of this year, the U.S. public will begin investing into gold and silver in droves as they realize that although we avoided a debt default for now, a debt default by inflation is still on its way. The largest ever short-term rally in precious metals and mining stocks is ahead.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:
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Peter, you are right - we need grownups, so my recommendation is for the President to fire all of the "kids", and let the "grownups" recommend other adult associates to replace them.
tsadjatko, regarding your comment "If U.S. Treasuries rally next week, it will only be temporary and will be followed by the largest and sharpest reversal in history with a crash in Treasury prices and an explosion in yields like never seen before.", will current EE bonds (not matured) be affected?
Well you must remember the views expressed above are of NIA and they are assuming that we aren't going to change the track we are on soon enough or won't change it enough to avoid what they see as inevitable.
To answer your question about EE bonds I believe there is no market for them. They are bought and redeemed from the government at a fixed price (like half what they will be worth at maturity and interest is added to the value of the bond each year) so their value acrues depending on when they were bought and their duration.
•EE/E Bonds you purchased between May 1997 and April 30, 2005, earn a variable market-based rate of return.
•Series EE Bonds issue dated May 2005 and after will earn a fixed rate of interest. They are an accrual-type security, which means interest is added to the bond monthly and paid when you cash in the bond.
There is a penalty if you redeem them early but since they are not a marketable security they should not be affected and not if you hold them to maturity. The only drawback may be if rates skyrocket you will not be earning a compatible rate with what might be available on other treasuries.
And as far as grownups are concerned I don't think there are any in politics - technology and "progress" has turned them all into self gratifying, unprincipled immature children (enter Clinton, Weiner, Obama, etc.)and that is why we are in the mess they have created.
tsadjatko, thank you, as always, for your thorough answer and expertise. I appreciate your the info you provided me on EE bonds. Regarding "grownups", I think there might be one...Maine Senator Olympia Jean Snowe (born February 21, 1947), née Bouchles, is the senior United States Senator from Maine and a member of the Republican Party.
Party does not matter to me in HER case *only*.
Marlo you are right there are a handfull of grownups on the hill that are suffering through this I'm sure, and Olimpia is one of them.
Peter
This blog sounds too self serving to me. In the end it is all about subscribing to the newsletter. Investing is never as cut and dry as presented here.
Example: on March 29, 2009 NIA wrote "We believe both the U.S. stock and housing markets are likely to fall another 30% nominally from these levels. However, priced in Gold, which is real money, they will likely fall 80% or more in the years ahead." Since then the stock market is up 60% and gold up 70%. However many of the gold mining stocks recommended by NIA are up less than the market in general (S&P 500). NIA could still be right over the long run but the last 29 months have shown them to be wrong.
Hello, tsadjatko,
Actually, this hub was quite educational for me. Knowledge about the nation's economy is not one of my strengths.
FanUSA, I did not view this Hub as self-serving at all! I am not sure what you mean by that. I feel the same way Hubber feenix does - that this Hub by Hubber tsadjatko is very educational. In fact, I am not only "following this Hub" to learn more from the comments, I also rated this UP, USEFUL, AWESOME, and INTERESTING. I am assuming that Hubber tsadjatko is very experienced in financial matters and put a lot of hard work and brainpower into this Hub. (This is coming from me, a Finance Major in college).
Even though investing "is never as cut and dry as presented here" per your comment, I think it is admirable that a Hubber took the time - almost immediately after the "S&P Downgrades U.S. Debt Rating" news was broadcasted - to write this Hub.
Just my 2 cents...
~MarloByDesign, 'Frugal Living, Saving Money, and Financial Tips' Hubber
All I was saying was, consider the source of the info. The hub concluded in urging readers to subscribe to the newsletter while previously touting some of their trading results. Beware the inexperienced investor!
FanUSA, I read your comment and am not sure what to say. I think I will wait for tsadjatko to comment as he or she is definitely more knowledgable on this subject than I am. At least I am not an experienced investor, just unlucky based on the dot com crash. Beware indeed!
NIAs latest comment
On January 4th with the Dow Jones/Gold ratio at 8.1, NIA predicted that it would decline in 2011 down to 6.5.
The Dow Jones today declined by 634.76 points to 10,809.85, while the price of gold rose $69.20 to $1,718 per ounce. The Dow Jones/Gold ratio is now down to 6.29, declining below our prediction of 6.5.
The stock market appears to be approaching oversold levels and could be setting up for a huge bounce, including a bounce in the Dow Jones/Gold ratio back up to above 6.5.
NIA is very pleased that its latest public options suggestion the Moody's (MCO) November 2011 $35 put options, which we suggested on May 23rd at $1.98, finished today with a bid of $7.80 for a gain of 294%!
On June 24th, NIA released an exclusive private options suggestions report with 8 options suggestions including 5 puts and 3 calls. 6 out of the 8 options suggestions from our report are now up, including 4 out of the 5 puts and 2 out of the 3 calls.
The 6 winners have made gains of 186%, 131%, 46%, 44%, 40%, and 7%, and the 2 losers have made declines of 16% and 46%.
All together the 8 options suggestions from our exclusive private report have made an average gain of 49% in just 6 weeks.
We gave each option suggestion a rating of 1 to 10 with 10 being our most confident options suggestions. All 4 of our highest rated options suggestions that we rated 8 or higher have been big winners with the average making a gain so far of 70%. The one option suggestion that we rated 10 is the one that has made a gain so far of 186%.
As far as fanusa comments - I welcome discourse (unlike other bloggers who are quick to censor comments when they disagree with them) but self serving blog?? Name one blog that isn't self serving? - I put this NIA info out there because it is informative and for the most part indisputable accurate information about what is happening that most people are oblivious to - their investment recommendations are ansilary but you went back 2 1/2 years to find an NIA recommaendation you could criticize? That seems self serving to me, no one is right all the time and when it comes to investing even the best are often considered good if they are right more than half the time. :-)
Actually, I picked that particular newsletter of 2.5 years ago at random. Here is another little titbit picked at random from one of your newsletters:
"Austrian economics should be a required course in all high schools. That way, instead of students wasting hundreds of thousands of dollars for a worthless college degree, they would be more inclined to invest that money into gold and silver in order to build a real savings that can be used to start a business in the future. Today, with the power of the Internet (for free), you can teach yourself the knowledge you need to become successful in any business in any industry"
Now, isn't that unconscionable? Kids should put their money into gold & silver and get their education from the Internet??? Have you heard of the silver bubble of 1980? Silber got up to $50/oz. due to speculation, only to drop by 95% by 1989.
I have nothing against a gold & silver hedge position as I have both in my portfolio, but, one must let reason prevail.
Sorry if I sound ignorant, but how does one go about buying gold and silver? Are there mutual funds you recommend, or you just "buy gold and silver"?
Is there a ticker symbol? Thx.
If you want to get real gold that you can hold in your hand go to a coin shop and they will have many denominations and countries of gold coins which is the safest gold to buy. If you were in Asia then you could go into any local Gold dealer and get what you want like here in Thailand where i live. You just would need a safe place to store it and don't tell anybody you got it.
Peter
Got it, ty Peter.
Hi Marlo
You can also buy gold and silver instruments on our stock exchanges. You can choose from stocks in mining companies in both of these commodities and there are a great number of them. You can also buy, what is called ETF's (exchange traded funds) which trade like a stock. They are backed by the physical commodity itself. The symbol for the silver ETF is SLV and for the gold is GLD which are the most commonly traded in their category. There are also a number of mutual funds which concentrade on gold and silver holdings.
Hope this helps.
@ fansua - As much as I prefer to avoid lengthy debates in comments I can't sit here and let your one sided comments (which do not pertain to the info addressed on this hub) go by unanswered.
You really are a bit much - everything you have said, from accusing me if making NIA recommendations (I have no affiliation with the organization nor anything to gain from publishing this hub other than the satisfaction of spreading awareness about hyperinflation) to criticizing a free newsletter as being a self-serving "subscription" when all it is, is free information, is akin to straw man arguments.
There is no solicitation of money in this hub by me or NIA (I don't even make a cent from my hubs) and all my hub is doing is answering questions, providing accurate information, articles, videos and financial recommendations through the National Inflation Association, an organization that is dedicated to preparing Americans for hyperinflation and helping Americans not only survive, but prosper in the upcoming hyperinflationary crisis.
It might help you to understand them more if you read their "about" page. If you disagree with what they say why don't you do your own blog and rat them out, instead of twisting the facts in my comment section?
Many informed and reasonable people are skeptical about college educations once they look at the statistics. This paragraph from a Time magazine article from Feb. 2010 sheds real light on the subject.
"Our high college drop-out rate — 40% of kids who enroll in college don't get a degree within six years — may be a sign that we're trying to push too many people who aren't suited for college to enroll. It has been estimated that, in 2007, most people in their 20s who had college degrees were not in jobs that required them: another sign that we are pushing kids into college who will not get much out of it but debt...The benefits of putting more people in college are also oversold. Part of the college wage premium is an illusion. People who go to college are, on average, smarter than people who don't. In an economy that increasingly rewards intelligence, you'd expect college grads to pull ahead of the pack even if their diplomas signified nothing but their smarts. College must make many students more productive workers. But at least some of the apparent value of a college degree, and maybe a lot of it, reflects the fact that employers can use it as a rough measure of job applicants' intelligence and willingness to work hard...But let's face it: college isn't for everyone, especially if it takes the form of four years of going to classes on a campus." Read more: http://www.time.com/time/nation/article/0,8599,196
Just look at the number of people with college educations who cannot find jobs in their field.
You obviously must not be a fan of John Stoessel - he says the same thing as NIA about college educations. John Stoessel (and many others who have looked at the data I might ad), believes that attending college is a scam and argues that for many it is “often not worth the investment.” http://www.ethicssage.com/2011/07/john-stoessel-la Forget college, look at what a wreck our public high schools are. It has been said “America provides the best high school education in the world, but you have to go to college to get it."
Just look at the studies (e.g. http://www.washingtonpost.com/wp-dyn/articles/A842 that show the vast majority of university professors are liberal. They indoctrinate their students even punishing them for expressing opposing views...anyone who has a university degree has experienced or seen first hand how this goes on, me included.
Your information about silver is inaccurate also, given the well known fact which you fail to mention about silver. The run up in silver was caused by the Hunt brothers trying to corner the market on silver in the 70's. By 1979, they had nearly cornered the global market. In the last nine months of 1979, the brothers profited by an estimated $2 billion to $4 billion in silver speculation, with estimated silver holdings of 100 million ounces (6.25 million pounds). During the Hunt brothers' accumulation of the precious metal, prices of silver futures contracts and silver bullion during 1979 and 1980 rose from $11 an ounce in September 1979 to $50 an ounce in January 1980. Silver prices ultimately collapsed to below $11 an ounce TWO MONTHS later. The largest single day drop in the price of silver occurred on Silver Thursday. Hunt filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code in September 1988, largely due to lawsuits incurred as a result of his silver speculation. In 1989 in a settlement with the United States Commodity Futures Trading Commission, Nelson Bunker Hunt was fined US$10 million and banned from trading in the commodity markets as a result of civil charges of conspiring to manipulate the silver market stemming from his attempt to corner the market in silver. This fine was in addition to a multimillion-dollar settlement to pay back taxes, fines and interest to the Internal Revenue Service for the same period.
So if silver is a poor investment because it was manipulated once 30 years ago I suppose you believe because of Enron no one should ever recommend stocks as investments?
I think if there is anyone who is putting a self serving slant to the facts in this hub or what you talk about here in comments it is you because you want to appear to be right, when you really are not. Hey, I am glad you are entitled (by me on this hub's comments) to express your opinions, but then so am I.
If you wish to present some more straw man arguments be my guest. Perhaps we can figure out from that what your real agenda is here. And thanks for your comments, they are, in the end, very educational.
Enough said? you got that right! - a NY Times (only the most far left liberal rag in the world) article on a report by the College Board? - like that is really objective?
Even so they couldn't ignore all the facts like what they said here “In general, college is a good investment, but there is great variability in outcomes,” said Robert Lerman, an economics professor at American University. “A significant minority of college graduates don’t earn as much as those with less education. And all is not lost if you don’t go to college. There are other routes to improving your earnings, for example, credentials that demonstrate mastery of an occupational skill like plumbing.”
So you have finally shown your true colors as I suspected you would - YOU ARE A FLAMING LIBERAL.
I warn you now, if any further comments are off in looney town from the points made in this hub (not the comment section)I will deny the comment.
tsadjatko 22
''S&P Downgrades U.S. Debt Rating'' IT DIDN'T HAVE TO HAPPEN. CHECK THIS OUT!
The Senator Coburn Report July 21, 2011
DEFICIT WASTE IN the US GOVERNMENT see video
Black in the black, the SOLUTION
Coburn? Isn't he an MD, oh and a Republican too! What could he possibly know about the deficit. The Republicans want to keep kids from going to college and to kill medical research so the rich can get richer! That is what our President would have you believe.
Great video - thanks for the input.
tsadjatko
''The Republicans want to keep kids from going to college and to kill medical research so the rich can get richer! That is what our President would have you believe.'' WHO ARE THE RICH HE REFERS TO?
There are two sides of Obama that one does not see or hear. In front of the camera, Obama says great things that sounds all good and terrific. What he says is not what he is actually doing. Much of what Obama says is a lot of hocus pocus and all smoke and mirrors, like now you see it and now you don't.
How can I make that statement?
You won't see or read the differences in the mainstream press or on liberal news casts. There is only one cable channel that will show past videos and other videos that show what he says that are contradictory statements.
LOL, I am loving these comments! Very educational and entertaining...Voted 'funny' as well (that vote was specifically for tsadjatko's comment, "What could he possibly know about the deficit?"
So true ! My other hub had a video of Obama's speech after the debt ceiling talks and hubpages unpublished the hub cause they said the video was watermarked - I also had two Fox videos on the hub but only Obama's was watermarked - then I realized I chose from youtube an MSNBC video of Obama's speech(Mark Levin calls them MSLSD). You would think with their lousey ratings they would want the free publicity of their videos being used - it was also deleted from a couple youtube postings. Fox doesn't watermark their videos.
tsadjatko, good info to know - thanks. And did HubPages offer for you to delete your video, but still keep the Hub? That would have been ideal.
Yes they allow you to correct the problem (the watermarked MSLSD video) and resubmit for publication - I just substituted the fox video of the same speech for the MSLSD video and resubmitted it. The only reason I used the MSLSD video was because I added the MSLSD video as soon as the speech was over and the only video of the speech on youtube right away was the MSLSD video...:-)
Okay, so your Hub is still out there...what is the name please so I can read it?
http://tsadjatko.hubpages.com/hub/If-your-elected- There are a couple long videos on there but they are worth watching - I especially like the c-span video •Do as I Say (Not as I Do): Profiles in Liberal Hypocrisy You must watch this C-Span video! Peter Schweizer talked about his book [Do As I Say (Not As I Do): Profiles in Liberal Hypocrisy] It is 47 minutes but well worth the listening - it will open your eyes if you are apolitical as I once was.
I was a little familiar with NIA, but thanks to your hub, now I’m going to pay a lot more attention to it. They are very accurate in what they are saying. Wow, I didn’t know you could trade options on Credit Ratings – that almost sounds like a no-brainer!
The comments, however, are the best part! Your discussion with the Lady in the Red Dress, I mean FanUSA, is engaging, enlightening and entertaining. I seconded the funny vote. I think you’re being a little hard on him or her though. He may really have a big heart, but just doesn’t have enough information to get a clear enough picture. For example, if he knew what that USA or UNITED STATES was really a for profit corporation (28 USC 3002 15(a)), and not a country, and the reasons for its creation in 1871, and proliferation to date, I don’t think he would go by the name “FanUSA”.
You guys shared a few words on college education, and although it’s off topic for the hub, I hope you don’t mine if I add my two cents here:
These days the purpose of college has been changed into something that most people don’t realize:
1. CONDITIONING. I’m sure you know that the American people are being dumbed down from birth to death – have been for generations, through conditioning via the mainstream media and the EDUCATION SYSTEM as well as other mainstream clubs and groups that people join. The more intelligent someone is, the more conditioning is required to keep him dumbed down and in control – enter the BS, MS and PHd’s. Don’t get me wrong, I have a college education myself and it has served me well over the years. I’m not knocking it, I’m just relating a long term trend that I’ve noticed.
2. DEBT. George Carlin did an awesome part on student loans. If the student does get a job when he graduates, he’s so far in debt that that he must do as he’s told for a very long time.
3. CONTROL. Both 1. and 2. work together to maintain control of those who have more of a tendency to aspire to make a difference in this world.
Re. the un-publishing of your other hub due to a watermarked video: Compare this to the hubber who had a watermarked picture of a young lady as her (or his) PROFILE PICTURE. It remained for months, people would comment about it in her hubs until she finally changed it.
Again, thanks for turning me back on to NIA, and I’m looking forward to reading more of your hubs.
Great to hear from you! Excellent points!
The Truth About Obama's Jobs Bill FROM NIA
On Thursday evening, President Obama gave a speech to a joint session of Congress discussing the jobs situation here in America. The purpose of Obama's speech was to convince the American public and their elected representatives in Washington to support Obama's new $447 billion 'American Jobs Act', which has a cost that is 49% larger than the $300 billion act most people were expecting. NIA believes this bill will do nothing to reduce unemployment in America and that it is nothing but another stimulus bill in disguise that will add to our budget deficits.
Obama's bill proposes a $4,000 per employee tax credit for businesses that hire somebody who was previously unemployed for 6 months or more, at a cost of $8 billion. At the same time, Obama wants to extend emergency unemployment compensation (EUC), which allows Americans who have exhausted standard unemployment benefits that last for 26 weeks to continue receiving them for between 20 and 53 additional weeks. EUC benefits are set to expire at the end of 2011 and continuing them through the end of 2012 will cost U.S. taxpayers $49 billion.
It is totally absurd for Obama to give employers money to attempt to hire people he is simultaneously paying to stay out of work. What makes this even more outrageous is that employers have an incentive not to hire recently laid off workers, when only those unemployed for 6 months or more will bring them a $4,000 check. If this bill is passed it will make the unemployment situation in America far worse than it already is.
NIA has heard from members who own farms and have positions on their farms available, but can't find anybody interested in working for them and filling the available positions. Every time they hire somebody to work on their farm, the worker purposely does a poor job and tries to get fired. Their sole purpose of getting a job is to convince their local unemployment agency that they are trying to find employment so that they can keep receiving unemployment benefits, when in reality they are trying to take advantage of the system.
Obama is right that any future recovery will be driven by our businesses and our workers, but if Washington wants to make a positive difference the only step it should take to improve our people's lives, is get out of their lives. It is impossible for any piece of legislation including Obama's 'American Jobs Act', to improve the employment situation here in America. Obama needs to remove any government programs already in place that interfere with the free market. NIA believes that if the U.S. eliminated all unemployment benefits and also got rid of the minimum wage, it would cause the unemployment rate to return to healthy levels.
U.S. employees earning up to $106,800 annually currently pay a 4.2% payroll tax that is scheduled to revert back to 6.2% in 2012. Obama not only doesn't want employee payroll taxes to raise back up to the historical level of 6.2%, which went into effect in 1990, but he wants to further reduce them to 3.1% for 2012. The annual cost of this employee payroll tax reduction is estimated to be $175 billion. In an attempt to help small businesses, Obama also wants to cut employer side payroll taxes in half from 6.2% to 3.1% on the first $5 million of payroll, while eliminating employer side payroll taxes for new hires. The annual cost of this employer side payroll tax reduction is estimated to be $65 billion.
NIA believes all payroll taxes should be eliminated. Americans who make payroll tax payments today are paying for other Americans to receive entitlement programs that they will never receive. Social Security and Medicare are already on the verge of insolvency. By the end of this decade, NIA believes Americans receiving Social Security checks will be receiving checks that don't have any purchasing power and aren't worth cashing. Americans would be much better off if they were able to use the money they currently spend on payroll taxes to accumulate physical silver instead. Only Americans with enough savings in physical gold and silver will be able to retire in the future.
Obama's bill also provides $35 billion in state and local government aid, $50 billion in infrastructure repairs, $10 billion for a national infrastructure bank, $30 billion for school modernization and repairs, and $15 billion in housing expenditures. Unfortunately, the jobs Obama's bill will create for construction workers, teachers, veterans, and the long-term unemployed, are only temporary jobs that will vanish after the bill expires, and the money printed to pay these workers will steal from the purchasing power of American workers who already have jobs today. There is no doubt about it that America's infrastructure is decaying and we need to build new roads and bridges, but this is something that we can't afford to do until we return to an economy that is based on production instead of consumption.
We need to return to a trade surplus and begin paying off our debt before we can afford to make investments into infrastructure. China can afford to build newer airports and faster railroads because they have a $254 billion trade surplus and $3.2 trillion in foreign exchange reserves that they are better off spending on infrastructure improvements than keeping parked in U.S. dollars that will soon be worthless.
Obama says that everything in his bill will be paid for, but NIA wonders how? The government is claiming this isn't another stimulus bill and Obama didn't mention the word stimulus once during his speech. The truth is, NIA believes all of the measures in this bill will have to be paid for by borrowing and printing money, which will increase our budget deficit, expand the money supply, and lead to massive price inflation.
The jolt that Obama is trying to give to the economy he admits has stalled, is the same economy he tried to jolt with the American Recovery and Reinvestment Act of 2009, which put the U.S. $787 billion deeper into debt. NIA said at the time this stimulus bill was passed that when it failed to produce the results the government said it would, instead of admitting that stimulating the economy failed and reversing course, they will say the stimulus didn't work because it wasn't big enough and attempt to pass further stimulus bills by making new false promises.
Obama is lying to the public just like Congress recently did in regards to its bill to raise the debt ceiling. Congress deceived Americans into believing that in return for raising the debt ceiling so that the government can continue operating as it is today, "spending cuts" would be made to lower future budget deficits. These so called "spending cuts" turned out to be minor reductions to very large spending increases, with even these minor reductions not beginning until early 2013. Government spending is set to rise every single year until the dollar doesn't have any purchasing power left.
Obama said in his speech last night that, "while corporate profits have come roaring back, smaller companies haven't." The reason this is true is only the largest banks and the companies they do business with have direct access to the Federal Reserve's cheap and easy money. If the Fed didn't bail out all of the banks on Wall Street that made risky leveraged up bets with other people's money for the sole purpose of paying their employees huge bonuses, smaller banks would have acquired their assets in bankruptcy court for pennies on the dollar and be prospering today. Instead, small banks that made sound decisions were punished for doing the right thing. The Fed has made it even more difficult than ever for them to compete with the large banks that should be out of business.
If the Fed and Treasury didn't bail out Wall Street, the world wouldn't have come to an end like former-Treasury Secretary Henry Paulson conned everybody into believing. The truth is, we would be better off today because the bad assets would have been liquidated. The bad assets that caused the financial crisis of late-2008/early-2009 still exist today. The main difference between back then and now is, the
tsadjatko
Obama wants to continue the pay roll tax deduction FOR WORKING TAXPAYERS. THE UNEMPLOYED DOSN'T GET a tax break. Also note what really is happening. The treasury is taking money from the General Fund and transferring funds to the Social Security Trust Funds to make up for the tax cuts for working citizens. Result is that WE the tax payers are indirectly paying for the tax breaks
If this is true, AMERICA BETTER WAKE UP!.
![Can You Eliminate the Deficit with Spending Cuts Alone? Give It A Try - THE GAME (updated - 4/16/2012) [19]](http://s4.hubimg.com/u/6470619_50.jpg "Can You Eliminate the Deficit with Spending Cuts Alone? Give It A Try - THE GAME (updated - 4/16/2012) [19]")
PETER LUMETTA Level 6 Commenter 9 months ago
Good assessment and advice. I believe the Dollar is on the way out and printing more will only dilute what is out there. The children playing in Washington think they can hide from us and the problems they have caused. Time to send them to bed with no TV and let the grownups run this country again. Thanks, Peter