Monthly Archives: October 2010

US Due for Debt Collapse

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The US is due for a massive debt collapse – or hyperinflation.  My prediction is that it will be at some point in the next 6 to 12 months.  The result of this collapse is that we should expect to see the US dollar drop substantially further, sending commodity prices shooting through the roof.

US exported inflation (what I call ‘interflation’) will start to punish all of us for the largesse and excess that is destroying their economy.

Canada will benefit in the short term with oil prices driving the economy of Alberta and Saskatchewan to new levels, with royalties filling the coffers for everyone but eventually, we’ll have the same erosion of manufacturing and other industries throughout the rest of the country and Ontario will once again face financial issues as it tries to even catch up to the whirlwind that is coming.

The solution is to eliminate any pricing in US funds.  If we remove ourselves from US dollar pricing, we may be able to avoid the Canadian dollar becoming a ‘petro-buck’, something that’s more of a curse than a benefit.

Here’s the original text of the piece from Zero Hedge:

#1: The US Fed is now the second largest owner of US Treasuries.

That’s right, this week we overtook Japan, leaving China as the only country with greater ownership of US Debt. And we’re printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June… as in four months ago. Want an explanation for why stocks, commodities, and Gold are exploding higher? Here it is:

dollar dropping.gif

#2:  “There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.”

This horrifying fact comes courtesy of Morgan Stanley analyst David Greenlaw. And it confirms what I’ve been saying since the end of 2009, that the US has entered a debt spiral: a time in which fewer and fewer investors are willing to lend to us for any long period of time… at the exact same time that we must roll over trillions in old debt and issue an additional $100-150 billion in NEW debt per month in order to finance our massive deficit.

And only $550 billion of the debt we’ve got to roll over has a maturity greater than 10 years!?!?

So we’re talking about TRILLIONS of old debt coming due in the next decade. The below chart depicting the debt coming due between 2009 and 2039 comes courtesy of the US Treasury itself. In plain terms, we’ve got some much debt that needs to be rolled over that you can’t even fit it on one page and still read it.

maturing treasuries

#3: The US will Default on its Debt

… either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years.

Bear in mind, I’m completely ignoring the debt we took on with the nationalization of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every US family making $31,000 in debt payments per year for 75 years to pay off our national debt.

Obviously that ain’t going to happen.

So default is in the cards. Either that or hyperinflation (which occurs when investors flee a currency). Either of these will be massively US Dollar negative and horrible for the quality of life in the US. But they’re our only options, so get ready.

A Future That Gets Cons Excited

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Prisons.

Repairing social issues or active industries to profit from?

In the US – the world’s largest incarceration system – cities are literally begging state and federal authorities to build prisons in their regions.  In fact, in the wake of the mortgage and housing crisis that is still evolving in the US, most abandoned communities desperately need something like this to keep their communities from complete collapse.

Escape from New York seems like such an impossibility now given the level of lobbying that will happen on every level to be the ‘next big prison jurisdiction’.

Canadians should take note.  Unfortunately, these will be positioned as the holy grail beside defense industry contracts to keep people ‘gainfully’ employed, but what kind of society will we have when all of our economic production and contribution is rooted in violence and fear?

With Stephen Harper promising to build a network of billions of dollars worth of prisons, will our community leaders be jumping at the chance to host these institutions?

Advertising Boycotts Against Fox Working

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Sometimes it seems like Fox is a bit of an unstoppable train, appealing to every moron in North America, but Media Matters provides us with a ‘feel good’ update:  advertising and media boycotts DO work.

After Glenn Beck called Obama a racist, the gloves came off and literally dozens of major advertisers have pulled funds from his show and other Fox programs.

More can be read about this advance at the Media Matters site.

Lessons to be learned for Canada?  Media boycotts and the withdrawal of advertisers hit the publishers where it hurts:  the bottom line.  In time, they’ll at least rein in some of these clowns and ‘journalists’ in order to continue to keep their heads above the water.

Sun Media and the Globe should take note.

Organizing a boycott is as simple as contacting the advertiser and telling them that they should not be supporting racists in Canada or that believe in gun boat democracy.

Category: Canada, media | Tags: , ,

Will Municipal Incumbents Be Punished by Federal Largesse?

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I’ve been running through some thoughts lately as I see the circus-like scenarios materialize with cities like Toronto and London as the municipal election approaches in Ontario.

In many cases, it seems like incumbents are going to pay the cost of the ‘Canadian Economic Action Plan’, particularly any of those that may not have been the most ‘frugal’ with their budgeting over the last four years.

People are making wild promises like no tax increases (to win over the minds of people that don’t want to pay for road closures any more), limited terms (so that they can avoid the repercussions of slashing budgets to make up for the halt on tax increases) and making general statements that they can eliminate largesse all-the-while balancing budgets (ultimately making promises they won’t be able to keep just so they can get into office).

While I’m not a professional politician, I am a voter and I’m calling bullshit on all of it.  They’re lying if they’re saying that they have a vision to invest and make their city better all-the-while slashing the heart out of municipal spending and not raising taxes.

These people are actors, not professionals.  They’re trying to manipulate the rage that individuals feel when they see the complete and utter waste that’s been directed by the federal government with the Action Plan.

They’ll put incumbents on the spot and demand to know what kind of investments were made in their area during the past four years.  The answer will be nothing but a bunch of shitty roads that will fall apart in five years.  We don’t have the vision and we weren’t given the flexibility to do anything otherwise.

This is the unfortunate reality of the situation.  The incumbents aren’t offering much to voters.  Where are the hospitals or new schools?  No budget.  Where are the investments in new digital infrastructure?  Not on the plan.  We need manufacturing jobs today not knowledge jobs tomorrow!

As you can tell, I’m conflicted with the situation and I’m expecting that a lot of cities will pay a hefty price for the Action Plan, mainly in terms of ideological shift.

The ‘old boys’ will be back in town and Canada will take a shift to the right that will punish us all.

Progressive voices need to start shouting and not whispering if we’re going to survive these local elections.

It’s Official: Canada is Being Run by … (fill in your description here)

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Tony Clement claims that one voter complaining to the government is enough to change policy.  Oooooo kkkkkkk.  I know the Cons got in with a VERY small volume of votes, but I didn’t realize it was just one.  I thought we still lived in a democracy.  Guess not.

Maxine Bernier has counting issues.  The ‘thousands’ of emails were ‘deleted’ from records.  Yeah … like that happens every day in a government office.

According to a CBC poll, more than 82% of respondents believe that the survey is not intrusive.  But if you’re a Con, don’t worry about the numbers.  They’re just made up by some wacky scientician!

Getting back to the issue at hand:  one complaint may be enough, proving to the rest of us that as far as the Conservatives are concerned, Canadians no longer count.

And since we no longer count, where can I go to stop paying my taxes?

And … where’s our ‘opposition’ on all of this?