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Cliff Dive
As I have long stated, GARGANTUAN, EXPANDING deficits and debts are here to stay; funded solely by “QE to Infinity.” You’re probably thinking I’m referring to the United States; but sadly, I’m speaking of the ENTIRE WESTERN WORLD – and much of the EASTERN WORLD, too.
However, for the sake of this RANT, I’m referring only to the carelessly used misnomer, “fiscal cliff” – as it relates to America’s FINANCIAL ARMAGEDDON. Given my aforementioned view, I have avoided this “official topic” until now. However, as Bill Holter wrote an excellent article on the topic last week…
The fiscal cliff…and fools – Bill Holter, Miles Franklin
…followed by David Schectman on Friday…
A Brief Discussion of Tuesday’s Presidential Debate – David Schectman, Miles Franklin
…I felt inclined to add my “two cents”…
Why A Balanced Budget Is Impossible In America
Aside from expiration of the “Bush tax cuts” at year-end, even I wasn’t sure EXACTLY what the “fiscal cliff” referred to. Thus, I found an article describing it in full…
…per the concise explanation below…
“Fiscal cliff” is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect. Among the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron’s, over 1,000 government programs – including the defense budget and Medicare are in line for “deep, automatic cuts.”
The aforementioned “Budget Control Act” was signed in August 2011, just after the U.S debt ceiling was breached and S&P downgraded our credit rating from AAA to AA+. The act was only signed to enable a debt ceiling increase, with an assumption the hastily created “Super Committee” would agree to further cuts immediately thereafter.
However, the Super Committee “dog and pony show” was nothing more than a ruse; as given MASSIVE bipartisanship, there was never a chance they would agree to anything substantial. Thus, the “Budget Control Act” turned out to be NOTHING more than a means of kicking the can past this year’s Presidential elections. And what did America gain from it? NOTHING, other than a COLLAPSING economy and – thus far – $1.7 TRILLION of new debt in just 14 months…
Even if the U.S. economy were humming along full steam ahead (the REAL economy, not the one held positive by GDP accounting chicanery), there is NO WAY the heavily unemployed, subsidy-requiring public could handle spending cuts of ANY TYPE; much less, the supposedly draconian measures suggested by this Act.
With Half of American Households on the Dole, is Entitlement Reform Even Possible?
And if god forbid, such MASSIVE spending cuts were actually introduced, we would immediately see the type of WIDESPREAD RIOTING affecting Europe – in GREECE…
Athens Full Day Strike Turns Violent: Tears Gas, Petrol Bombs Exchanged
…PORTUGAL…
Protests in Lisbon after Portugal’s draft budget revealed
…SPAIN…
Anti-austerity protests grip 56 Spanish cities
…ITALY…
Students riot across Italy in protest over austerity measures
…and FRANCE…
Thousands of French Protest Austerity Plans
By the way, these are NOT old articles, as ALL have were written in the past two weeks. And if you go back to 2011 – just before the Fed and ECB intervened with MONEY PRINTING SCHEMES like the “swap agreement” and “Long Term Financing Operations”- even Europe’s so-called “stronger” nations experienced the same; such as the UK…
U.K. Faces Massive Strike In Protest Of Austerity Measures
…and GERMANY…
Of course, rioting is just a symptom of the real issue – POVERTY; i.e., hunger, homelessness, and destitution. And the only “cure” for such symptoms – particularly in a DEVESTATED economy, which is EXACTLY what will result from spending cuts – is MORE MONEY PRINTING…
…yielding increased INFLATION…
…surging DEBT…
Treasury Downgrade Soon: Debt Ceiling To Be Breached In A Matter Of Weeks
…and further economic COLLAPSE…
As I have noted countless times before, fiat currency defines a PONZI SCHEME; as it MUST grow larger to stay viable, and MUST retain citizens’ CONFIDENCE.
Given the U.S. passed the “point of no return” long ago, there is NO CHANCE of any outcome other than systemic IMPLOSION – to eventually be replaced with a foundation of REAL MONEY; i.e., PHYSICAL gold and silver.
In other words, we are already amidst the nation’s – and ENTIRE WESTERN WORLD’s – “CLIFF DIVE.”
PROTECT YOURSELF, and do it NOW!
Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.
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2012-10-24 16:41:22
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