One of the main reasons I got thrown off the GG Forum was because of the hate I generated by telling Americans that they were literally Bankrupt as a country and that their days of world domination were very rapidly ending .They just could not handle their view of themselves being questioned .
But this huge change has been clear to anybody really involved in economic and financial matters and for several years .
For impartial and informed onlookers , the outcome has been certain beyond any reasonable doubt . I withstood the derision of uninformed opinion for about two years as I unfolded the future , and , as time has passed , my convictions grew even more certain .
I do not delight in this scenario because the implications for ordinary Americans are horrendous .
And because of the fundamental flaws in the EU and the massive Sovereign Debts , the effects could turn Europe into a Disaster Zone and not a Euro Zone .
It will affect Russia inevitably but if Oil prices remain above $70 ( currently around $96 ) , you should be OK . And as in 2008 the one man who has done more to help Russia ---- despite his many other faults --- is Kudrin . It was him , and basically he alone , who persuaded the Gang Master and his cronies to create a huge reserve from the Oil and Gas surplus profits .
For those bothering to read this , you will be pleased to see a Topic that is not apparently bashing Putin Land .
The New York Times has just reported that powerful lawmakers in Congress are working behind the scenes to help states to get out from under massive debts — including obligations to pay pensions — simply by declaring BANKRUPTCY!
Even Newt Gingrich, a possible Republican presidential candidate in 2012, endorsed the idea! He says that he hopes ...
"House Republicans are going to move a bill in the first month or so of their tenure to create a venue for state bankruptcy."
Unlike cities, U.S. states cannot currently seek protection from creditors in federal bankruptcy court. But lawmakers worry that some states are so deeply buried in debt that it's only a matter of time before their only recourse will be to demand bailouts from the federal government.
So the plan is to change the law to let them go bankrupt! In a bankruptcy, the states could:
* Renege on contractual promises to pensioners
* Stiff unsecured creditors
* Default on principal and interest payments to bond holders.
Indeed, according to The New York Times,
"Along with retirees, however, investors in a state's bonds could suffer, possibly ending up at the back of the line as unsecured creditors."
This is TRULY a bombshell — so hot, explosive, and so potentially damaging to investor confidence that any talk about has been strictly hush-hush. The Times continues:
"Congress [is] going about their work on tiptoe. No draft bill is in circulation yet and no member of Congress has come forward as a sponsor."
The reason, admits the Times, is simple: Everyone's afraid that mere mention of the words "state bankruptcy" could wreak havoc in the muni bond market.
Darn right it will! They're talking about trusted GOVERNMENTS declaring bankruptcy — an event that could do unquantifiable damage to investor confidence in all governments!
Meanwhile, the mere possibility of defaults has caused jittery investors to withdraw more than $25 billion from mutual funds that invest in muni bonds in the last two months — $4 billion in the latest week alone.
That means the cost of borrowing is already rising dramatically for states, counties and cities, a fact that can only intensify their budgetary problems. Should the market get spooked by talk of state bankruptcies or an actual default, troubled states could get priced out of the capital markets, making it impossible to borrow.
Former Obama administration budget director Peter Orszag sums it up this way:
"America must brace itself for
turbulence due to this great debt crisis.
The reason for his warning — issued just hours ago — is quite simple: He fears that ...
A massive federal and state debt
implosion will probably occur before
Congress or the states act to reduce deficits!
