After issuing $32 billion of new 2-year bonds last Tuesday, the U.S. debt to GDP ratio hit 101%. Quietly. I guess the mainstream media was too busy arguing over contraceptives to bother reporting that we're on the road to Greece.

Oh, and surprise! The "federal government [will most likely] hit the debt ceiling sooner than expected."

Sweet, huh?

Who's going to bail out the U.S. when the inevitable default happens?

Consider the following chart from Zero Hedge as an icy cold shower.

Who's Buying US Debt?

click to enlarge

If that doesn't frighten you, you haven't been paying attention. Our Extend & Pretend Master Plan chickens ... are coming home to roost.

Think about this.

The Federal Reserve, China, Japan, and UK respectively, are now the biggest buyers of U.S. government debt (December 31, 2010 to December 31, 2011).

The UK is at a staggering 950% debt to GDP ratio. Japan's ¥1,086,000,000,000,000 (quadrillion) of debt puts them at a debt to GDP ratio of 225%. China (along with Russia, India and Iran) is already diversifying out of U.S. Treasuries. And the Fed? They're simply monetizing the debt.

Congress granted the Federal Reserve an exclusive monopoly on money, along with the power to print and issue it at will. So when the U.S. Treasury issues new bonds to cover government spending, and the Federal Reserve purchases the debt by writing checks against itself (creating money out of thin air), this process of government financing is called monetizing the debt. Put simply, the Fed prints whatever money Congress needs.

For a more detailed explanation see: The monetization of U.S. government debt, we're watching and it's bigger than you think.

Of course the Federal Reserve isn't the only central bank purchasing government debt by means of printing their own money, they're all doing it. It's a global ponzi scheme writ large. Kicking the can down the road, spending tomorrow's income today ...

A cruel hoax designed to keep the Ruling Class in power by fooling the masses.

G10 Debt Distribution

click to enlarge

America has been traveling this path toward destruction for a long time now. None of this is difficult to understand.

The Federal Reserve, a central planning bureaucracy not unlike those found in the old Soviet Union, enables the government's spending addiction via its printing press. In the name of war, crony capitalism replaced the natural market. In the nae of progress, government dependency was created. And economic models based on consuming wealth rather than producing wealth became the new "conventional wisdom."

Greece grew its debt faster than its income until they could no longer service the debt. There is no way out. One way or another, the losses will be taken. But this is America! It can't happen here.

Think again. Because America's government debt per capita is already worse than Greece.

America's Per Capita Government Debt Worse Than Greece

click to enlarge

As our first chart illustrates, Treasury auctions are already starting to fail. For absent the Federal Reserve's magical printing press, there aren't enough investors willing to support Congress' profligate spending left. Eventually, yields will have to rise. But until then, the Fed will keep printing whatever amount of money they need.

They'll call it something else of course, like "quantitative easing," "liquidity injections," or some other such nonsense, pretending they sound smart. But monetizing the debt - printing all the money Congress needs - is what they're actually doing.

How else do you think they're going to rollover the nearly $3 trillion of government debt coming due this year alone?

History (and common sense) teaches us where this game leads: economic depression and financial ruin.

According to a new report, Primary Numbers: The GOP Candidates and the National Debt, the Committee for a Responsible Federal Budget has determined that Ron Paul is the only candidate offering a plan which will actually reduce federal debt (by about $2.2 trillion by 2021). But, but, um, he's crazy! His budget plan is like totally unrealistic and stuff.

No. The only thing unrealistic and crazy around here is the idea that we can continue the status quo Extend & Pretend Master Plan, which Obama, Gingrich, Santorum, and Romney are more happy to do.

They'll blame "the rich," "speculators," and every other boogie man they can dream up ... war makes a wonderful distraction. But the day of reckoning will come. Either the dollar will collapse or the federal government will collapse. And chaos will reign.

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