The bankruptcy of the United States is now certain

The bankruptcy of the United States is now certain
From Porter Stansberry in the S&A Digest:
Israpundit »

Reprinted:
It’s one of those numbers that’s so unbelievable you have to actually think about it for a while… Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that’s not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That’s an amount equal to nearly 30% of our entire GDP. And we’re the world’s biggest economy.

Where will the money come from?"

"How did we end up with so much short-term debt?

Like most entities that have far too much debt - whether subprime borrowers, GM, Fannie, or GE - the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then “rolling over” the loans when they come due. As they say on Wall Street, “a rolling debt collects no moss.”

What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt… at ever shorter durations… at ever lower interest rates.

Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that’s when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt it’s called “a default.” Currency speculators figured out how to accurately predict when a country would default.

Two well-known economists - Alan Greenspan and Pablo Guidotti - published the secret formula in a 1999 academic paper. That’s why the formula is called the Greenspan-Guidotti rule. The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities.

The world’s largest money management firm, PIMCO, explains the rule this way: “The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support.”"

"The principle behind the rule is simple. If you can’t pay off all of your foreign debts in the next 12 months, you’re a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It’s a guaranteed default. The U.S. holds gold, oil, and foreign currency in reserve. The U.S. has 8,133.5 metric tonnes of gold (it is the world’s largest holder). That’s 16,267,000 pounds. At current dollar values, it’s worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that’s roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether… that’s around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we’ve been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months - an amount far larger than our reserves."

"Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So… where will the money come from?

Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we’re still going to come up nearly $3 trillion short. That’s an annual funding requirement equal to roughly 40% of GDP.

Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or the Russian central bank, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet."

One thing they’re not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None own even 1% of their total reserves in gold.

I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry’s Investment Advisory, which we published last Friday. Coincidentally, the New York Times repeated our warnings - nearly word for word - in its paper today. (They didn’t mention Greenspan-Guidotti, however… It’s a real secret of international speculators.)

Crux Note: The S&A Digest comes free with a subscription to Porter Stansberry’s Investment Advisory. Porter says his latest issue is the most important he’s ever written. If you don’t act right now to protect yourself from the dollar, he thinks the odds are very high you’ll be wiped out over the next 12 months. To learn more, click here.

and more:
Financial News, Investment Ideas, Business News, Financial Insights: "FDIC admits the obvious: We're broke The fund insuring your bank deposits officially in the red..."
Another huge country dumping the dollar

New EU president confirms New World Order desire

New EU president confirms New World Order desire (19Nov09)
Posted on November 22nd, 2009 by David-Crockett
The Betrayal





Politics: Guess what? The new EU boss wants our taxes:
http://www.newsoftheworld.co.uk/
THE NEW EU PRESIDENT wants everyone in Europe to pay taxes directly to Brussels in a massive power grab. Read on

Understand what these events lead to. Send for or download these free booklets:

Revelation: The Mystery Unveiled
The Beast of Revelation: Myth, Metaphor or Soon-Coming Reality?

The EU 's New Chiefs

Van Rompuy takes EU presidency


Baroness Ashton appointed as EU's foreign policy chief

EU Wasting No Time, Will Choose Top Men Within 5 Days.

Is the prophesied first beast of revelation emerging from its matrix?

EU Summit to Choose President; Van Rompuy Is Favorite…(Update2)
By Johan Carlstrom and Jonathan Stearns
Bloomberg.com NEWS
Nov. 11 (Bloomberg) --

The European Union will hold a summit on Nov. 19 to choose its first president and foreign minister, with Belgian Prime Minister Herman Van Rompuy and ex- Italian leader Massimo D’Alema tipped as possible candidates.

Swedish Prime Minister Fredrik Reinfeldt, whose country holds the rotating EU presidency, said he had called the meeting of the bloc’s 27 leaders in Brussels to fill the posts. He declined to name any possible candidates.

“There are many names for both the positions,” Reinfeldt told reporters today at a Brussels press conference.

Passage last week of the EU’s governing treaty shifted debate over who would fill the posts into high gear, with Van Rompuy emerging as a compromise candidate for president after former U.K. Prime Minister Tony Blair’s chances faded, partly due to his support for George W. Bush’s Iraq war in 2003.

Reinfeldt said he completed a first round of talks with EU leaders today and is seeking to reduce the field of candidates.

“My intention is to put forward one candidate per job,” Reinfeldt said. “When you actually speak to all 26 colleagues you get more names than we have jobs to offer. And that shows that we will need more consultations.”

He said the EU president will come from a “narrow” category of current or former prime ministers.

“Van Rompuy is the only person now seen with any credibility as EU president,” Shada Islam, an analyst at the Brussels-based European Policy Centre, said in a phone interview. “D’Alema is the foreign ministry frontrunner.”

EU’s Global Profile

Van Rompuy, 62, is joined by Dutch Prime Minister Jan Peter Balkenende, 53, and Luxembourg Prime Minister Jean-Claude Juncker, 54, who are also contenders in the behind-the-scenes campaign for the EU presidency, intended to heighten the bloc’s global profile.

The EU president, with a 2 1/2 year-term renewable once, is also supposed to “drive forward” the work of EU summits and “facilitate cohesion and consensus,” according to the bloc’s new treaty.

D’Alema, 60, who has served as Italy’s prime and foreign minister, emerged as a lead contender to become chief EU diplomat after Prime Minister Gordon Brown said yesterday that U.K. Foreign Secretary David Miliband, 44, who had been seen as a frontrunner, “was never a candidate for the job.”

Another possible candidate is Swedish Foreign Minister Carl Bildt, 60.

Paddy Power Plc, Ireland’s biggest bookmaker, made Van Rompuy the 1-2 favorite for the presidency, ahead of Blair at 11-2 and Balkenende and Juncker, each at 7-1. A week ago, Balkenende was the 9-4 favorite. D’Alema is frontrunner at 7-4 to become foreign-policy chief, ahead of Miliband at 5-1 and Bildt at 6-1.

Analysts say the future EU president will face an immediate challenge in establishing clout.
“The EU president’s role hasn’t really been defined clearly,” said Islam. “So leaders can choose between a high and low profile person. But if the EU is to polish its global profile after years of institutional stagnation it’ll need a very articulate and active foreign minister.”

Related Articles »
EU to Appoint President Within Days
By JOHN W. MILLER
WSJ.com
BRUSSELS -- European Union leaders are days away from picking their first president and foreign minister, and their decision should be finalized before a summit scheduled here on Nov. 19, EU officials say... The EU's new framing document, the Lisbon Treaty, takes effect Dec. 1. National leaders would like to have a name by then.

EU President Takes Tough Line on Filling Top Jobs
New York Times
... most decisions on top EU jobs were made under rules that allowed any nation to block an appointment, but that right disappears under the Lisbon Treaty. ...

Send for your copy or download:
Revelation: The Mystery Unveiled
The Beast of Revelation: Myth,

Angela Merkel re-engages Germany as active player in European Union

Roger Boyes: Commentary
Times Online

Excerpt:
...Germany is about to re-engage with Europe. Having turned inwards for the best part of a decade, Germany is ready again to become an active, even assertive, player in the European Union...

...Mr Kohl — notably absent from the Wall ceremonies yesterday — always argued that, German unity and deeper European integration were two sides of the same coin. If Germany was to grow bigger, then, it had to reassure its neighbours — and not just a sceptical Baroness Thatcher — that it was embedded in the European Union.

...So Chancellor Merkel feels that the time has come to turn Germany outwards again.

...she wants a big German input into the euro-zone over the coming years of delicate economic recovery. Because this is exactly what her mentor Mr Kohl would have done.

All the signs are that this will only be the beginning.

Read entire post: Angela Merkel re-engages Germany as active player in European Union

Revisit the previous post on this site: Is The Prophesied Political Beast Born?

Is The Prophesied Political Beast Born?

Leviathan Is Born: The Annexation of Europe by Brussels
By Paul Belien
Created 2009-11-05 09:00

Excerpts:
November 3rd 2009, at 3 pm local time, the Czech Republic ceased to exist as a sovereign state when Vaclav Klaus, its president, put his signature under the Treaty of Lisbon. The Czech Republic was the last of the 27 member states of the European Union to ratify the treaty which turns the EU into a genuine state to which it members states are subservient...

Now, with Mr. Klaus’s signature, the game has drawn to its close and a treaty, so despised by the people that it was never put to them, has turned 500 million Europeans into citizens of a genuine supranational European State which is empowered to act as a State vis-à-vis other States and its own citizens. The EU will have its own President, Foreign Minister, diplomatic corps and Public Prosecutor.

Henceforward, the only remaining sovereign power of any significance in Europe is Russia. Apart from Switzerland, Norway and Iceland, the EU leviathan has a grip on every other nation, whose national parliaments are, in accordance with the Lisbon Treaty, obliged to “contribute actively to the good functioning of the Union,” i.e. further primarily the interests of the new Union, rather than those of their own people...

The new European superstate, however, is not a democracy. It has an elected parliament, but the European Parliament has no legislative powers, nor does it control the EU’s executive bodies. The latter, who also have legislative power overriding national legislation, are made up of “commissioners.” These are appointed by the governments of the member states (although no longer with one commissioner per member state, as was the case so far, but with a total number capped at two-thirds of the number of member states). The EU is basically a cartel, consisting of the 27 governments of the member states, who have concluded that it is easier to pass laws in the secret EU meetings with their colleagues than through their own national parliaments in the glare of public criticism...

The formal decision about who will become President and High Commissioner will be taken in late November. As the wheeling and dealing – all of it behind closed doors so that the people will not know – continues...

Related post:

Britain betrayed as hated EU treaty becomes law
Wednesday, November 04, 2009,The Sun
BRITAIN dragged into vastly more powerful European Union... after Labour party betrayal

So what lies ahead? Read the following posts:

Is the —Beast— Awakening?
A fourth Reich?
The Fall of the Berlin Wall: Bible Prophecy and the Hand of God

The Church of God has been proclaiming these for over 50 years:

“No all-out full-scale war is prophesied between Russia and the United States. The famous prophecy of Ezek. 38 and 39 foretells a Russian invasion of Palestine, much later, not against the North American continent.” —The Plain Truth, August 1950, p. 2

“…the world will be dumbfounded to see Germany emerge suddenly in a power never equalled by Hitler—by a union of ten nations in Europe, probably including some at present puppets of Russia—in a gigantic United States of Europe. This definitely is prophesied!” —The Plain Truth, August 1950, p. 4

“Russia may give East Germany back to the Germans and will be forced to relinquish her control over Hungary, Czechoslovakia and parts of Austria to complete the ten nation union. Europe will have a free hand to destroy America and Britain as prophesied.” —The Good News, April 1952, p. 16

As Mr. Herbert W. Armstrong wrote in the August 1950 issue of The Plain Truth, “Bible prophecies reveal the general course of world events” (p. 2). Certain details will only become fully clear when the prophesied times are immediately upon us. However, Scripture makes plain the overall sequence of end-time prophetic events, which is unlike what most self-styled “prophets”—or even the world’s best prognosticators—propose based on their limited human understanding of world events.

More than 50 years ago, during a time when most religious and political leaders only saw the potential for conflict between the U.S. and the Soviet Union, this Work recognized that Bible prophecy put the end-time focus on ”Assyria”—Germany, not Russia—as the aggressor that would ultimately put an end to the dominance of the American and British-descended nations (see Psalm 83:8; Isaiah 10–11).

Truly, those who are watching world events unfold today realize that Scripture’s “big picture” panorama of the end-time prophetic sequence remains sound, as explained more than 50 years ago through the ministry of Mr. Herbert W. Armstrong, which we in this magazine are continuing.

—William Bowmer
America's Last Days?

The U.S. National Debt as of Monday 9 November 2009 at 8:114:01 AMis

$12.002 Trillion

Sodom Rises Again

By Douglas S. Winnail

Today, “progressive” people are promoting the very lifestyles that brought divine destruction on the cities of Sodom and Gomorrah! The Bible predicted that this would occur—and explained where it will lead—in prophecies that are coming alive today!
Read more: Sodom Rises Again!


Stolen water is sweet
The commercial was ending as I returned with my snack into the living room. The website address and the catch phrase remained on the screen like a stain on the carpet. “Life is short. Have an affair,” read the website’s catch phrase. My shock was entangled with confusion and disbelief. Was this a crude joke? Did I just see an advertisement promoting an extra-martial affair? Has the concept of “Whatever happens here stays here” overtaken every aspect of life? ...Read more »

FAITH UNDER FIRE
WorldNetDaily Exclusive
Man fired after saying homosexuality wrong - Accused of 'harassment' even though lesbian approached him--WND

Ripping out anti-'gay' Bible pages catches on
Homosexual 'Lord of the Rings' actor prompts others to deface Leviticus 18:22
--Popeater

Pedophile protection act is now LAW
Christian group banned for 'vilifying homosexuals'
http://www.remnantofgod.org/

Request or download your copy of:
The Ten Commandments
The United States and Great Britain in Prophecy
Sex without responsibilities and without consequences
From Closet to Mainstream: The Homosexual Agenda