Category: Economics & Investing

I’m frequently asked what is going to happen when the U.S. Treasury’s AAA credit rating is downgraded. First, consider this news article: Moody’s Affirms U.S. Rating, Warns of Downgrade. Here are my predictions, in a nutshell: We can expect continued credit market volatility. The recent debt limit increase did nothing to correct the basic problem. The U. S. government spends more than it takes in, so its residual payments are growing, inexorably. As this insanity continues, at some point U.S. Treasury paper will lose its AAA luster. that will initiate a very ugly chain of events that will play out …

Glenn Beck puts the Federal debt cap deal in prepper terms. SurvivalBlog’s G.G. sent several links: ‘The Bear Market Is Starting’: Marc Faber Europe on Brink of ‘Major Financial Collapse’: Guggenheim CIO Bank run! Greece in panic as it faces change of Homeric proportions Items from The Economatrix: Stocks Now Down For The Year As Economic Concerns Grow Hoarding Of Physical Gold, Voracious Global Demand To Produce Undeliverable Gold Futures, Parabolic Move To $2700-$3000/Oz. Global Manufacturing Collapses To Worst Levels Since Mid-2009, Markets “Shrug It Off” Bachmann:  Debt Limit Deal Means “We Embrace Being Greece”

Ol’ Remus talks economic collapse: We have arrived. He may be right. The debt-limit compromise in congress was a travesty. Tuesday’s drop in the Dow and the jump in gold signal that market senses some big changes in the near future. If the Federal credit rating slips below AAA, interest rates will rise, and there will be a nasty cascade of concommitant events. Buckle up! F.G. flagged this: Metal Detectors Hit the Jackpot J.J.G. sent a link to piece by Ann Barnhardt: We The Stupid. Real estate debacle: More than two years worth of shadow inventory overhang. That Which Is …

Michael Panzner, over at his excellent Financial Armageddon blog presents some graphics with sobering statistics on personal debt in America. Chris G. suggested this photo essay on failed currencies: A Thousand Pictures Is Worth One Word R.J.K. sent: Three Reasons to Stick With Gold & Silver J.B.G. mentioned: Rhode Island’s Central Falls files for bankruptcy An interesting piece by Lorimer Wilson: July Update: Gold & Silver Warrants Index (GSWI) Several links courtesy of regular contributor John R.: When a Cut is Not a Cut (Dr. Ron Paul) Martin W. Armstrong: Uncle Sam – Dead Broke Who Can Take This Country …

Last week, just before everyone’s attention was diverted to a Mall Ninja toting a tarted-up Mini-14 in Norway, news came of $16 Trillion Dollars that was loaned by the Federal Reserve to prop up the banksters–mostly in Europe. This is an aggregate figure on loans over the course of two years, and most of it was paid back, but it is still staggering. Its a good thing that we have experts like Tim Geithner and Ben Bernanke in charge. Otherwise there might be inflation or somethun’… Oh, and meanwhile, the Congresscritters are quibbling about how they can “trim” $1 trillion …

In his latest subscribers-only newsletter, veteran market analyst Porter Stansberry describes a U.S. sovereign debt downgrade as “inevitable”. JWR’s comments: Make your plans with the assumption that there will be a rating downgrade by all of the credit ratings agencies. The current AAA rating for U.S. paper is just a convenient fiction. Obviously a debt downgrade will mean higher interest rates. This will in turn ratchet down the U.S. economy in general and the residential and commercial real estate markets in particular. This will delay any recovery for many years. Plan on a riding through a depression that could last …

Kevin K. sent this: The $1 Billion Armageddon Trade Placed Against The United States. (I suspect it might have been György Soros, et al. Oh, and I heard that Soros just bowed out of hedge fund management, except for his family’s own little $14 billion nestegg.) W.D.V. suggested this: How America Could Collapse It’s not the default, it’s the downgrade. (Thanks to Bill in Colorado for the link.) Muddying the Muddy Waters. Items from The Economatrix: Greece Suffers New Credit Downgrade The Kabuki Theater Of America’s Debt Ceiling The $1 Billion Armageddon Trade Placed Against The U.S. The World According …

More Shrugging: Alabama coal mine owner Ronnie Bryant became so exasperated by over-regulation that he declared: I’m quitting.” (BTW, I just added this article link to my American Redoubt page.) Here’s a dip in spot silver, just like I mentioned. Buy on the dip days! Jeff B. sent this: Proposed road rules for farmers anger some. Note that this newspaper article comes from Montana, where in 2009 they enacted a gun law that amplifies the 10 Amendment. Predictably, Federal legislators want to deem purely intrastate commerce somehow interstate. That is utter nonsense. It is high time for the Supreme Court …

Check Out This Industry Catalog and Price Sheet for FABRICATED Foreclosure Documents. (Thanks to Jeff B. for the link.) John R. recommended this: The Dollar, Gold And The Quality Of Money F.V. sent a link to some commentary by Stephen Hadley: Solve the Next Crisis Before it Happens. Slate asks: Are We Broke Yet? This article has a couple of great graphs. (A hat tip to Yishai for the link.) Items from The Economatrix: White House Veto Threat on Debt Sends Stocks Lower Deal Or No Deal?  US Downgrade Looking Likely White House Privately Telling Banks US Won’t Default Greek …

In case you missed it, spot gold touched $1,620 per ounce yesterday, and silver got to $40.91. I’m glad that so many SurvivalBlog readers took my advice and bought silver back in 2005 when it was under $7.25 per ounce. For those that didn’t: There is still the chance to buy on the dip days, since the bull market is likely to continue for several more years. The Mother of All Bailouts (MOAB) continues to grow: FHA May Be Next in Line for Bailout: Delisle and Papagianis Dow-to-Gold and Greece-to-Gold The American Thinker asks: Is Your IRA Going To Be …

Chris D. suggested this: Fed’s $16 Trillion Dollar Secret Slush Fund Props Up Our Way Of Life. The enormity of this secret bailout is staggering. The math on this is pretty simple: If you double the money supply, what can you expect to happen to the purchasing power of the currency? Hmmmm? Get ready for inflation and higher gold prices.The National Inflation Association (NIA) reports:” Currently, the U.S. ‘officially’ has 261 Million ounces of gold. If U.S. money-$13.5 Trillion in M3- were backed by “U.S. gold”, there would be over $51,724 Dollars for every one ounce of gold.” (So, after …

The U.S. economy is now spinning out of control. It is now apparent that the 2008 credit crisis was never resolved. Rather, it was simply postponed, by creating $16 trillion out of thin air. With all that cash pumped into the system, a few people are now singing Once In A Lifetime, but most are singing the Hard Times Blues, or even Are They Gonna Make us Outlaws Again? A recent piece by Tyler Durden: EU Debt Restructuring Leads to Bailout Euphoria / Silver to Double to $100 Say Citigroup. Tyler notes: “…it is very unusual to see such a …

Gold to Rise on $14.3 Trillion U.S. Debt Limit Increase Bob G. spotted this: Europe’s Contagion Effect: Prepare for a Global Economic Collapse Ron’s Paul’s speech on the Federal Debt Ceiling John T. sent this: How to make sense of the gold-to-silver ratio Chris D. recommended: The Symbolic Nature Of Money Dr. Gary North’s comments on debt-based money and its alternatives. Items from The Economatrix: Gold Could Hit $1,700 By the End of the Year:  Analyst Fitch Reiterates Warning on U.S. Credit Rating Iran Opens Oil Bourse — Harbinger of Trouble for New York And London? Economy’s Spring Slump Could …

Entschuldigung, but doesn’t this sound a bit inflationary, for the U.S. Dollar?: Audit: Fed gave $16 trillion in emergency loans to foreign banks. Worth reading: How Capitol Hill Is Pushing the U.S. Economy to the Edge. (Thanks to Sue C. for the link.) Chris H. suggested this: Gold shines, but silver is the moneymaker. Economics Professor: “[We’ll Have] a Never-Ending Depression Unless We Repudiate the Debt, Which Never Should Have Been Extended In The First Place” (Thanks to John R. for the link.) K.K. sent this: Silver Update: Caught in the act, “The Comex is a completely and utterly corrupt …