Too many Americans continue to think the problems facing our country can be solved via Democratic or Republican politicians. That somehow, someway, the 545 people responsible for all of U.S. woes, are also the same people we should count on to get us out of the mess.
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits? Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?
You and I don't propose a federal budget. The president does. You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does. You and I don't write the tax code. Congress does. You and I don't set fiscal policy. Congress does. You and I don't control monetary policy. The Federal Reserve Bank does.
One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of the 235 million - are directly, legally, morally and individually responsible for the domestic problems that plague this country.
The following graph illustrates what your Democratic and Republican "leaders" have done. As you can plainly see, their buying votes, costs YOU a lot of money.
Your wonderful "leaders" continue to tell you they've got it all under control too. Republicans are "fighting" to cut a whopping $61 billion from the budget, while Democrats proclaim "we're not broke," wanting to spend even more. But contrary to their lies, Barack Obama, Charlie Rangel, John Boehner and the rest of the Washington ilk, are fully aware that the U.S. debt bubble could explode at any moment.
They won't tell you the truth, or do the right thing, because they don't have the moral character to do so. But they are fully aware of the crisis we face. After all, they even got a stern warning from the insider's insider, Robert Rubin, at Davos.
The risks of our fiscal position are serious and multiple. And while these risks become more severe over time as our debt position worsens, all of these either have begun to materialise or could do so in the near term, so we should act now.
Growing out of our fiscal morass over time without policy action would require inconceivable rates of growth ... either we make the hard decisions so vital to our future, or we will be forced at some point to act more harshly and with less time to thoughtfully set priorities.
Rubin warned the political elite at Davos, in no uncertain terms, that the U.S. is teetering on disaster.
Bill Gross, who runs the world's largest bond fund, just dumped all government bonds from his Total Return Fund too.
Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., eliminated government-related debt from his flagship fund last month as the U.S. projected record budget deficits.
Yields on Treasuries may be too low to sustain demand for U.S. government debt as the Federal Reserve approaches the end of its second round of quantitative easing, Gross wrote in a monthly investment outlook posted on Pimco’s website on March 2.
Gross in his February commentary urged investors to reduce holdings of Treasuries and U.K. gilts and buy higher-returning securities such as debt from emerging-market nations. “Old- fashioned gilts and Treasury bonds may need to be ‘exorcised’ from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint,” Gross wrote.
Bill Gross is an insider. Geithner and Bernanke take his calls. Now, read what he had to say about inflation and government default at the Barron's 2011 Roundtable:
I don't know if the U.S. has reached a desperate point, but it is employing instruments and vehicles and policies that smack of desperation. We are not looking at a default here, but at years of accelerating inflation, which basically robs investors and labor of their real wages and earnings. We are looking at a currency that almost certainly will depreciate relative to other, stronger currencies in developing countries that have lower levels of debt and higher growth potential. And, on the short end of the yield curve, we are looking at creditors receiving negative real interest rates for a long, long time. That, in effect, is a default. Ultimately creditors and investors are at the behest of a central bank and policymakers that will rob them of their money.
Marc Faber, the infamous fund manager and publisher of "The Gloom Boom & Doom Report," followed up Gross' comment by adding:
Janet Yellen, vice chair of the Federal Reserve, said about a year ago that if it were possible to push interest rates into negative territory, she would vote for that. This is a very important statement because it implies that the Fed will keep real interest rates negative as far as the eye can see. Negative real rates amount to expropriation and destroy one function of money: to be a store of value and a unit of account. If you measure the stock market not in dollars but gold, it is down 80% since 1999. I no longer regard the U.S. dollar as a valid unit of account. People shouldn't value their wealth in dollars because one day, in dollars, everyone will be a billionaire.
Unless you're visiting from another planet, you should be well aware of the um, "close" relationship, between Goldman Sachs and the U.S. Treasury. Well ...
Former Goldman Sachs technical analyst, Charles Nenner, said: "I told my clients and pension funds and big firms and hedge funds to almost go out of the market, almost totally out of the market." He also predicts a major war.
So there you have it. Three major insiders - Robert Rubin, Bill Gross, and Charles Nenner - not only sounding the economic alarm bells, but acting on them by getting themselves and their clients out of the markets as fast as they can. When you add Marc Faber, a man with significant "skin in the game" to that list, you've got yourself 4 serious people, all warning of a very real and significant economic collapse.
What does that tell you?
That Republican and Democratic politicians are lying to you. Oh, and we're doomed.