The World is Choking on Government Debt

[autorank]

The World is Choking on Government Debt

Numerian

Unprecedented relationships are beginning to form in the global bond markets. For as long as anyone can remember, the US government has enjoyed the lowest cost of borrowing whatever the maturity of the bond, because the US has been deemed the safest credit anywhere in the world. The prospect of default of the United States has been considered so low that academics describe the US Treasury bond as the risk-free bond., from which all other credit instruments are priced.

This relationship seems to be breaking down, for the first time in living history. This past week Berkshire Hathaway was able to raise funds at an interest rate lower than that of the US Treasury. Headlines in the financial press stated: “Obama Pays More Than Warren Buffett For Money.” The bonds of DuPont and other stalwart corporate names also yielded less than equivalent maturity Treasuries.

Watch for continuing hints that the US Aaa rating is in jeopardy (Moody’s has already suggested as much), and watch the stock market, which has been on a tear lately, convinced that government will always be able to rescue the economy and any big player who gets into trouble. It is this very assumption which is now under question, and which calls into doubt the whole Dow Jones rally of the past year.


More: http://tinyurl.com/yldbmf8

[Cassandra]

1. Moody's is saying that...

(joining the late-to-the-party deficit hawks) because they hope to gut Social Security and most other domestic spending. Moody's also gave great ratings to subprime crappola, so I don't give their opinion as much weight as I used to.

[autorank]

6. Hi there! Moody's according to the CT Attorney General:

http://www.ct.gov/ag/cwp/view.asp?A=2341&Q=456804

"'These credit rating agencies gave the best ratings money could buy -- catering to their powerful investment bank clients, rather than objectively rating risky bonds,' Blumenthal said. 'Countless investors and others -- including individuals, banks, mutual funds, insurance companies, hedge funds and pension funds -- were misled into believing that these credit ratings were independent and objective, and lost money on investments they might have avoided if told the truth.'"

It gets worse at the press release announcing his law suit.

It'a a multidimensional scam and they expect us to pay the debt. I don't think so!

:hi:

[leveymg]

2. The really frightening thing is that the stock market goes up while everyone on Wall St. knows this

It's all one giant speculative bubble containing many, many bubbles. When the Federal Treasury goes . . . . . . . . pop . . . pop .. pop . POP!!!!!!!!

[autorank]

7. Nice ornament

Good to see you.

We're through the looking glass. When Buffett can borrow cheaper than Uncle Sam, we're in
a strange world. This will take some very creative thinking. Hope they're up to it.

[leveymg]

9. Thanks for posting this.

But, I'm not so fine with the idea that this is the end of the world as we know it. The Middle Ages weren't a lot of fun. Nor was post-Weimar Germany.

That's a slow-mo photo of a bubble popping - the beautiful orb turns to a spreading mass of little strings of soap and water mist. Nothing left over but the faint whiff of detergent in the air. Like "capitalist democracy."

[formercia]

11. Fiat currency makes good toilet paper if it's laundered properly.

Most of it doesn't even exist but on a computer somewhere.

[Echo In Light]

3. k/r

[juajen]

4. I suggest everyone forgive everyone's debt and go to the barter system.

You know, we send a million screws to china and they send us a million of their top of the line dishwashers I guarantee our screws will last longer than their dishwashers and will be lauded the world over. Then we can all say that our screwing of China is truly balanced trade!

[autorank]

8. LOL n/t

[Subdivisions]

5. Great article. Thanks for posting it. There was a time not so long ago when

I considered such things as monetary policy and banking and finance and economics very dry and uninteresting. But wayyyy back in 2004-2005 I frequently stumbled onto Peter Schiff's writing and videos through links on other forums and, in reading and watching for context, became interested in his warnings (and moreso the consequences) of a housing bubble about to burst. I've been involved in residential and commercial construction all my working life, so I had a base of commonality between my occupation and the bursting of that bubble. Sure enough, laffed and laffed at as he was by the idiots on CNBC, he was right and I was hooked. Here is his latest vid:

Alan Greenspan - just admit you screwed up
http://www.youtube.com/watch?v=xxDwnRGruPs&feature=player_embedded

Related: THE Most Important Chart of the CENTURY
http://economicedge.blogspot.com/2010_03_14_archive.html

The latest U.S. Treasury Z1 Flow of Funds report was released on March 11, 2010, bringing the data current through the end of 2009. What follows is the most important chart of your lifetime. It relegates almost all modern economists and economic theory to the dustbin of history. Any economic theory, formula, or relationship that does not consider this non-linear relationship of DEBT and phase transition is destined to fail.

...snip...

[omega minimo]

10. What benefit was there for the Banksters to destroy the U.S. economy?

[autorank]

14. I'm glad that you asked

http://www.rebelcapitalist.com/

[omega minimo]

19. Don't they still

need this market to buy their crap while they build their global hegemony?

[Hannah Bell]

27. no. most large corps now have bigger overseas markets. like GM, whom we are bailing out.

while they're profitable overseas.

[defendandprotect]

15. They killed a lot of their competition and GREED seeks immediate rewards. . .

PLUS -- no retribution -- they got bailed out!

Patriarchy and its underpinning - Organized Patriarchal Religion -- and its

system of Capitalism are all suicidal concepts!

And they will take us all with them!

[omega minimo]

20. How come crazy people are in charge?

[defendandprotect]

23. Because they use violence to get their way . . . unfortunately....

coups, assassinations, political violence succeed --

and the only way the right wing can rise is thru violence, intimdiation, stolen elections.

2000 put Bush in White House and Cheney in charge -- and Rumsfeld in charge of military!

Would we even be talking about overturning DADT if they were still at the controls?

OTOH, Gates isn't much better on that issue!

[omega minimo]

28. violence

and brainwashing.

We're supposed to forget where Gates came from.

[defendandprotect]

29. Gates also played a major role ...

in the "October Surprise" which put Reagan in the White House --

[defendandprotect]

12. Just watched Michael Moore's "Capitalism - A Love Story" . . .

Great movie . . . a little slower than some of his other films --

Not as DIRECTLY hard hitting -- but it sure does the job!

And, my DVD has 5 or 6 other interviews ...

One with David Hedges is startling -- it's what I finally figured out over

the decades -- but it's the kind of information our young people need now!

Who wants the American dollar?

And I'm quite sure mine is worth about half of what it was before Bush was president -- !!

[autorank]

13. And when the dollar goes down

It's like a pay cut for a lot of people.

The system is great if you have large sums of cash that you can move around and you know how to
do it but otherwise, there's not much equity (no pun intended).

Excellent movie. I'll get the the DVD now that I know about the six other interviews.

[defendandprotect]

16. $15 at Walmart . . . my first time ever at that store and don't plan to go back . . .

However, I did meet a young man there clerking who was trying to be helpful

because we couldn't find Capitalism or Sicko and they have no real system to

even know if they have it in the store! Anyway, he mentioned that he wasn't

"much on Michael Moore" and I asked him if he had no concerns about health care.

He said, he wasn't concerned now -- that would be a long way off when he was older.

I asked him didn't his parents need health care, Medicare/Social Security?

And he mentioned to me that in fact he couldn't get insurance! Seems he has a

shunt in the back of his neck to drain fluids from his brain!

Sounded to me more like he needed a lot of medical care so I unloaded a lot of info

on him which he didn't know. Told him the bill sucks and we need a lot of work on

it, but what it was proposing to do and what still needed to be done. I think he

might look for the SICKO video!

Meanwhile, if there were ever a problem of any kind in the store -- electricity

knocked out -- fire of any kind -- I'm quite sure you'd never get out of the store!



PS: Before you ask, could have gotten the video for $17.99 at Amazon but don't want

to give my credit card on line and they won't do over the phone!

[Starry Messenger]

17. k & r

[Me.]

18. Who's Going To Apply Heimlich?

[autorank]

22. I'd get too emotional;)

[EFerrari]

21. K&R

[autorank]

24. Thnx

:kick:

[Nikki Stone1]

25. The debt was made necessary, in great part, by Wall Street's criminality and the bailout

both here and abroad. Once debt reaches levels that are not able to be paid back in many lifetimes, the shots will be called outside major governments. There's a plan here.

[walldude]

26. Man, you are going to put a damper on the whole

"Obama is the greatest president ever, he saved us from economic collapse!" thingy...

[autorank]

30. Nah, debt is debt;)

Besides, I know whose fault it is - Bono!!!

[scarletwoman]

31. Too late to rec, but here's my kick. nt