Peter Schiff: Dow 14,000, GDP, Jobs, Fed, Inflation, Treasuries, Gold!

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Peter Schiff

Dow 14,000, GDP, Jobs, Fed, Inflation, Treasuries, Gold!

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USA Sovereign Debt Exceeds GDP: Government Handout Heaven

The USA public debt continues greater than the annual GDP. That is, the government of Republicans and Democrats are spending more than can be justified by government income. Therefore the debt ratio continues greater than 100%. This has been a concerted, long-term bi-partisan effort to reach this pathetic moment in American history. My commentary is non-partisan.

Egan-Jones warned about this in their downgrade of United States sovereign debt to AA. Fitch Ratings reiterated it would cut the USA sovereign credit rating from AAA next year if a credible fiscal consolidation plan, deficit reduction, is not implemented. This is disturbing plus foolhardy as Americans enjoy the free ride while they can. Your share of the United States public debt is $50,688 and add another $1,596 for your share of this year's interest expense if you, a debt-ridden American, prefer not to roll the interest into the debt.

The two-party corporate political system kicks this debt bomb down the road with the blessings of their constituency and financial supporters. This is because a majority of Americans have bought into the fallacy that the government works for them and should be in charge of their lives in the name of the public good, safety, health, protection against the latest terrorists/enemies, and/or (insert your rationale here). Never mind this extravagant spending and ever-increasing government matrix must be charged to the sovereign credit card and not paid for in cash.

Of course, the government is actually for the benefit of the lobbyists, maximizing their profits, and keeping you under control. But just enough morsels are tossed out to the masses so they buy into the myth: "Government is the great fiction, through which everybody endeavors to live at the expense of everybody else" (Frederic Bastiat). The problem is this fiction cannot sustain itself and ultimately a Day of Reckoning cometh for the USA. The morsels will stop at that Day for American citizens. The government domestic security platform that is being built up rapidly will sure come in handy to keep you subdued, obedient, and compliant when the American Dream crashes into flames...



This fiscal lunacy doesn't stop the federal spending on wars & military budgets, Homeland Security, TSA, NSA, CIA, & police state infrastructure, federal employee & military pensions & benefits, corporate welfare & subsidies, individual tax breaks & credits, social benefits & care, now the Affordable Health Care Act, and all the other free stuff and handouts every last American wants. A significant portion of this spending has to be funded by borrowing (30%+ of every dollar spent) and this keeps the fiction alive that you live in the Land of the Free. The major media, the corporate advertising delivery system, will continue to affirm this make-believe world for you and will act just as surprised as you when the Day of Reckoning arrives.



To perpetuate these unsustainable fiscal and monetary policies as long as possible, Chairman Ben Bernanke and the Bankster-controlled Federal Reserve must keep interest rates crammed down in a zero-interest rate environment, buy U.S. Treasury securities, and print money. He doesn't get one bit of assistance from the President or Congress to stop this madness as they dance to the tune of the lobbyists and show no inclination to balance the budget even for one year. A long-term balanced budget, which doesn't even have to be honored, is impossible as well (remember the Super Committee sham?). If the Fed doesn't perpetuate this Ponzi scheme, the entire American Dream would blow up right now instead of the inevitable "later".

The interest expense on the USA's ever-increasing debt could skyrocket easily to $1 trillion annually if the interest rates got loose from Bernanke! Not only that, some of the Too Big To Fail banks might actually become insolvent from interest rate shock and counter party panic. The entire frigging financial system might meltdown! It's hard out here for the Wall Street Banksters! Ask JPMorgan CEO Jamie Dimon, Goldman Sachs CEO Lloyd Blankfein, and their accomplices about that!



Charts consist of the latest data available from the Bureau of Economic Analysis (GDP at 6-30-12), U.S. Treasury (Public Debt at 8-2-12), and U.S. Census Bureau (Population at 8-4-12):
Public Debt $15.921 trillion GDP $15.596 trillion
Population 314.090 million
Annualized Interest Expense $501.157 billion
Effective Interest Rate 3.39%

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

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USA Sovereign Debt Exceeds GDP: Spendthrift Nation

The USA public debt continues greater than the annual GDP. That is, the debt ratio has exceeded 100%. Egan-Jones warned about this in their downgrade of United States sovereign debt to AA. Fitch Ratings reiterated it would cut the USA sovereign credit rating from AAA next year if a credible fiscal consolidation plan, deficit reduction, is not implemented. This is disturbing plus foolhardy as Americans enjoy the free ride while they can. Your share of the United States public debt is $50,281 and add another $1,300 for your share of this year's interest expense if we prefer not to roll the interest into the debt.

The two-party corporate political system kicks this debt bomb down the road with the blessings of their constituency and financial supporters. This is because a majority of Americans have bought into the fallacy that the government works for them and should be in charge of their lives in the name of the public good, safety, health, protection against the latest terrorists/enemies, and/or (insert your rationale here). Never mind this extravagant spending and ever-increasing government infrastructure must be charged to the sovereign credit card and not paid for in cash.

Of course, the government is actually for the benefit of the lobbyists, maximizing their profits, and keeping you under control. But just enough morsels are tossed out to the masses so they buy into the myth: "Government is the great fiction, through which everybody endeavors to live at the expense of everybody else" (Frederic Bastiat). The problem is this fiction cannot sustain itself and ultimately a Day of Reckoning cometh for the USA. The morsels will stop at that Day for American citizens. The government domestic security infrastructure and matrix that is being built up will sure come in handy to keep you subdued, obedient, and compliant when the American Dream stops.



This fiscal lunacy doesn't stop the federal spending on wars & military budgets, Homeland Security, TSA, NSA, CIA, & police state infrastructure, federal employee & military pensions & benefits, corporate welfare & subsidies, individual tax breaks & credits, social benefits & care, now the Affordable Health Care Act, and all the other free stuff and handouts every last American wants. A significant portion of this spending has to be funded by borrowing (30%+ of every dollar spent) and this keeps the fiction alive that you live in the Land of the Free. The major media, the corporate advertising delivery system, will continue to affirm this make-believe world for you and will act just as surprised as you when the Day of Reckoning arrives.



To perpetuate these unsustainable fiscal and monetary policies as long as possible, Chairman Ben Bernanke and the Bankster-controlled Federal Reserve must keep interest rates crammed down in a zero-interest rate environment, buy U.S. Treasury securities, and print money. He doesn't get one bit of assistance from the President or Congress to stop this madness as they dance to the tune of the lobbyists and show no inclination to balance the budget even for one year. If the Fed doesn't perpetuate this Ponzi scheme, the entire American Dream would blow up.

The interest expense on the USA's ever-increasing debt could skyrocket easily to $1 trillion annually if the interest rates got loose from Bernanke! Not only that, some of the Too Big To Fail banks might actually become insolvent from interest rate shock and counter party panic. The entire frigging financial system might meltdown! It's hard out here for the Wall Street Banksters! Ask JPMorgan CEO Jamie Dimon and his accomplices about that!




Charts consist of the latest data available from the Bureau of Economic Analysis (GDP at 3-31-12), U.S. Treasury (Public Debt at 6-28-12), and U.S. Census Bureau (Population at 7-1-12):
Public Debt $15.781 trillion
GDP $15.468 trillion
Population 313.857 million
Annualized Interest Expense $407.971 billion
Effective Interest Rate 2.67%

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

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USA Sovereign Debt Exceeds GDP: The American Dream Gone Wild

The USA public debt continues greater than the annual GDP. That is, the debt ratio has exceeded 100%. Egan-Jones warned about this in their downgrade of United States sovereign debt to AA. This is disturbing plus foolhardy as Americans enjoy the free ride while they can. Your share of the United States public debt is $50,100 and add another $1,320 for your share of this year's interest expense if we prefer not to roll the interest into the debt.

The two-party corporate political system kicks this debt bomb down the road with the blessings of their constituency. This is because a majority of Americans have bought into the fallacy that the government works for them and should be in charge of their lives in the name of the public good, safety, health, protection against the latest terrorists, and/or (insert your rationale here).

Of course, the government is actually for the benefit of the lobbyists, maximizing their profits, and keeping you under control. But just enough morsels are tossed out to the masses so they buy into the fiction: "Government is the great fiction, through which everybody endeavors to live at the expense of everybody else" (Frederic Bastiat). The problem is this fiction cannot sustain itself and ultimately a Day of Reckoning cometh for the USA. The morsels will stop at that Day for American citizens. The government domestic security infrastructure and matrix that is being built up will sure come in handy to keep you subdued, obedient, and compliant.



This fiscal lunacy doesn't stop the federal spending on wars & military budgets, Homeland Security, TSA, NSA, CIA, & police state infrastructure, federal employee & military pensions & benefits, corporate welfare & subsidies, individual tax breaks & credits, social benefits & care, and all the other free stuff and handouts every last American wants. A significant portion of this spending has to be funded by borrowing (30%+ of every dollar spent) and this keeps the fiction alive that you live in the Land of the Free. The major media, the corporate advertising delivery system, will continue to affirm this make-believe world for you and will act just as surprised as you when the Day of Reckoning arrives.



Bash poor old Chairman Ben Bernanke and the Bankster-controlled Federal Reserve all you want, but he's got to keep those interest rates crammed down in a zero-interest rate environment and print money just as fast as he can to keep America afloat. He doesn't get one bit of assistance from the President or Congress to stop this madness as they dance to the  tune of the lobbyists. If he doesn't perpetuate this Ponzi scheme, the entire American Dream would blow up.

The interest expense on the USA's ever-increasing debt could skyrocket easily to $1 trillion annually if the interest rates got  loose from Bernanke! Not only that, some of the Too Big To Fail banks might actually become insolvent from interest rate shock and counter party panic. The entire frigging financial system might meltdown! It's hard out here for the Wall Street Banksters! Ask JPMorgan CEO Jamie Dimon and his accomplices about that!



Charts consist of the latest data available from the Bureau of Economic Analysis (GDP at 3-31-12), U.S. Treasury (Public Debt at 5-29-12), and U.S. Census Bureau (Population at 5-31-12):
Public Debt $15.71 trillion
GDP $15.45 trillion 
Population 313.65 million
Annualized Interest Expense $413.96 billion
Effective Interest Rate 2.80%

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

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USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

Greetings American Citizen:

It has come to my attention that the USA public debt is now greater than the annual GDP. That is, the debt ratio has exceeded 100%. Egan-Jones warned about this in their recent downgrade of United States sovereign debt to AA. This is disturbing plus foolhardy for me to continue giving you a free ride. Your share of the United States public debt is $49,843 and it would help a bunch if you could chip in another $1,349 for your share of this year's interest expense. When can I expect payment?

Where's Uncle Sam? You ignored his collection letters over the years. He retired in frustration. I'm his totalitarian sibling who's running things now. Sam says I have control freak issues. If this spending and borrowing habit doesn't stop, I'll have to do a reset after hyperinflation and economic collapse. Then I will have total power!

You can't pay your share of the debt and interest? You really should, but I tell you what, for now, let's kick the can down the road. In memory of Uncle Sam and the Good Old Days. No one wants to face a Day of Reckoning, even when they know it is inevitable. I'll give you a short-term extension, but it's just for a little while. This living on debt must stop otherwise the crony capitalists and foreigners will buy up all the assets at Depression level prices someday!



Your children and grandchildren can surely figure out a way to pay me for all of these wars & military budgets, Homeland Security, TSA, NSA, & police state infrastructure, federal employee & military pensions & benefits, corporate welfare & subsidies, individual tax breaks & credits, social benefits & care, and all the other free stuff and handouts every last one of you Americans want. You keep telling everyone how smart your kids and grand kids are. They better be! I hope you aren't fibbing, or delusional, like when you say you live in the Land of the Free.

You haven't been noticing, maybe actually ignoring or denying, what's going on? Oh, you were busy posting their cute pics and videos on Facebook while watching TV, movies, and other mass media. FYI, the Republic was lost while you've been self-absorbed and apparently ridiculously gullible. Oops!



Poor Ben Bernanke, he's working so hard to help you, printing money just as fast as he can to keep America afloat. Then he has to worry about those darn interest rates and keep them crammed down in a zero-rate environment. Otherwise, the interest expense on the USA's ever-increasing debt would skyrocket. Not only that, some of the Too Big To Fail banks might actually become insolvent from interest rate shock and counter party panic. The entire frigging financial system might meltdown! On top of all these worries, his bosses keep pestering him about more and more for them - the Wall Street Banksters!

Most likely your progeny will have to pay for all this apathy and greed of yours in unspeakable ways. But, by God, grandpa and grandma got to live the good life! Who said you couldn't be bought? Your price was easy for you, you cheated and haven't paid. You are so selfish plus been bought and sold by the political system.  I won't tell anyone, I understand. It's been tough these past few years and it's still hard out here for an American, right? No worry about your current situation, the price I will extract is the future prosperity and freedom of your children and grandchildren. In the meantime, continue enjoying life as best you can!

Please refer to Greece, Spain, former Soviet republics & satellites, Latin America, et. al, for a preview of the early stages of upcoming American despair. It's difficult to tell you the latter stages when I am in complete command. Of course, the bi-partisan political and corporate corruption will get worse and worse. Freedom, liberties, and rights will vanish as the government and major media, the corporate advertising delivery system,  fuel fear about terrorism, always scaring you with an enemy to justify perpetual war and domestic crackdowns. That's when your descendants will curse you for being a selfish coward and bum as their Bill of Rights is destroyed by tyranny. It gets really, really bad in the New Amerika. Say hello to and tell those precious kiddies of yours to cowboy and cowgirl up! It's going to be a rough ride!

/s/ Big Brother





Charts consist of the latest data available from the Bureau of Economic Analysis (GDP at 3-31-12), U.S. Treasury (Public Debt at 4-27-12), and U.S. Census Bureau (Population at 4-30-12):
Public Debt $15.62 trillion
GDP $15.46 trillion
Population 313.46 million
Annualized Interest Expense $422.71 billion
Effective Interest Rate 2.78%

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The Elephant in the Room: Egan-Jones Downgrades USA Debt to AA

Egan-Jones Ratings Company has downgraded USA sovereign debt from AA+ to AA, with a negative outlook. That leaves Fitch Ratings and Moody's Investor Service with the deluded conclusion that the United States of America should be rated AAA. Yet even Fitch and Moody's have hedged their malfunctioning debt-rating models with a negative outlook.

Egan-Jones noted concern that "the increasing debt load coupled with the fact that there has been no tangible progress in addressing the country’s growing debt to GDP". Sean Egan continues, "Unfortunately, the debt is growing fairly rapidly while the GDP is not". Wasn't the bi-partisan Super Committee supposed to clean up all this messy budget balancing and skyrocketing national debt? The U.S. Debt Clock is now at $15.63 trillion and just whirring away, while the USA 2011 GDP was estimated by the BEA at $15.09 trillion. Yep, the USA is at the threshold of a fiscal world where debt is greater than GDP with no balanced budget in sight.

The United States federal budget will never be balanced, increasing taxes and cutting spending are not on the bi-partisan negotiating table. You can't get re-elected taking away constituents' spending money or cutting government goodies. Nothing has changed since August 2011 and the political debt-ceiling debacle. Monolithic, self-preserving Washington and powerful, self-absorbed special interests have created a circular fiscal firing squad. American citizens, Main Street, will be the casualties and are as much to blame as the corrupt politicians and corporations. On Easter, there should be national prayer that the global credit card America lives on is not revoked. A credit limit increase would be nice too.

Stay tuned for more notes from underground. The decline of the American Empire continues as the Fed printing presses run 24/7/365...

USA Sovereign Credit Ratings at a Glance
Fitch Ratings: AAA, Outlook Negative
Moody's Investor Service: AAA, Outlook Negative
Standard & Poor's: AA+, Outlook Negative
Egan-Jones Ratings Company: AA, Outlook Negative
Dagong Global Credit: A, Outlook Negative
Weiss Ratings: C-, equivalent to BBB- or 1 level above junk, Outlook Not Provided

Egan-Jones Ratings President on Downgrading U.S. Credit Egan-Jones Ratings President Sean Egan on downgrading U.S. credit due to the government’s mounting debt.