The USA is NOT in uncharted territory. This is becoming a blow-by-blow repeat of the last days before the French Revolution. Rather than bore you
with the details that are staggering, here's the summary.
- The prolonged paying of interest by issuing ever more bonds.
- A skyrocketing "real rate of return" on Government stock
- The belief that somehow Government debt is not like that of the ordinary man and does not obey the same laws of economics and mathematics.
- The involvement in a foreign war to support rebels against an unfair tyrrant (in King Louis XVI's case it was to support Washington)
- The stripping of the world economy of all working capital to feed an out-of-control budget deficit that in King Louis XVI's case reached
- The bolstering of the state's finances by selling "no-bid contracts" which parallels the sale of aristocratic titles that had special privileges
by the French King. Indeed, by 1789, one in 12 people was an "aristocrat", similar to graduates nowadays.
- The issuance of immunity against prosecution and special taxes.
- The development of special prisons for those who had "not yet done a crime" such as the Bastile in Paris to silence criticism, not least of the
- The nationalization of finance hoses in difficulty to prevent disruption of further sales of bonds.
- Economy plunges into bitter recession with lavish expenditure in an effort to boost the French economy.
- The crass belief that a bond default by the Federal Government would cause a period of civil unrest developing over the several weeks that could be
held in check by martial law.
THIS IS WHAT ACTUALLY HAPPENED...
Friday 11th July 1789
- King refused new funds by National Assembly.
- The King then repudiates all his debt.
- Bond market goes into worst collapse in history.
- Almost all French finance houses collapse instantly.
- Paris stock market plummets
- Merchant houses begin collapsing.
- Mass layoffs in Paris.
Friday 11th - Sunday 12th
- Angry doctors, lawyers and middle class folk now having lost everything realise threat of Royal reprisals and martial law and start taking over
armouries from soldiers who abandon their psots fearing they are not going to be paid.
- Total bond market collapse.
- Total stock market collapse.
- Comprehensive collapse of French business interests, mass layoff.
- Threat of reprisals.
Tuesday 14th 1789
- Fearing threat of reprisals, angry mob, mainly of middle class folk storm the Bastile, the French King's direct equivalent of Gitmo.
- Fighting in the street, heavy loss of life.
Wednesday 15th 1789 Onwards
- French Chateaus, the equivalent of the homes of US CEO's are attacked and wealthy aristocrats lynched.
- Fear of local law enforcement means that they too are now mobbed and lynched.
- Lynchings spread down the chain to minor aristocrats, the wealthy, the qualified, professionals, landlords, anyone employed with all law enforcement
- All business and farming at a stand still as everyone too afraid to go out.
- In weeks, mass starvation.
People think there will be martial law or a coup developing over the time of the crisis. If I am right, the answer is no, what will happen is that
events will unleash in hours.
If I am right, the day after America defaults on its debt will look like this:-
I didn't know all the specifics of the French Revolution, it sure matches what is happening in the US. As with the french the US is sucking up
capital from across the world in order to fund itself because we don't make enough or have enough savings in order to tax it for funding of the govt.
Heck our expenditures are so big that there isn't enough money to fund them, so we have to borrow from the rest of the world. This process cannot
go on much longer, and the rest of the world and the govt. knows it. The US will split apart into a bunch of areas when the central govt. doesn't
have any ability to stop this mess. Of course they have a military, but guess what the military have families and exteneded families in this mess.
You might see whole units or people disserting just to protect their family and loved ones.
Also if I haven't you didn't read my post about the market on another forum yesterday. CNBC pundit Rick Santelli was on live yesterday talking
about the bond market and he made a comment that shocked me, it shocked me because I'm surprised that they allowed him to say it. Essentially he
said that a big direct buyer was buying bonds for many months now during every auction, and the rumor is that it's the Fed buying the treasuries and
bonds and trying to hide it from the public. What this is called is monetization no matter what. I went to the CNBC website to see the video clip
and they never posted it on their website, but I was able to find it on youtube and will post a link. This is important because this shows what was
quoted in the international news some months ago that China has curtailed buying more treasuries. And the powers that be are doing everything they
can to hide and obfuscate and deny what is in our face. And that is we are printing money to buy our debt because nobody wants the dollar anymore.
They govt. and the politicians have to by hook or crook keep this game going because they know that the american people won't accept the severe (and
I do mean severe) austerity programs and cuts that would be required to protect the dollar (it's to late anyway because there are just to many
dollars and the world economy demands another form of trading currency) and our economy. Both the right and the left have made so many promises that
they are out on the planck and can't go back the way they came. Many believe it or not would rather jump off and swim to some shore in order so they
don't have to go back onto the ship of a country to explain or see what there actions and their co-patriots actions have done to the country/ship of
state. Imagine that right wing white/grey/blue color worker who listen to Rush Limbaugh or the left wing it's no one's fault lets just pray etc.
etc. (for the right also). Imagine that they find out that they can't buy food with any of the green pieces of paper they have. Imagine they go to
the bank and find out that your safety deposit box can't be opened even with somebody like an IRS official there, because what they haven't told you
until later is that the govt. has took all the safety deposit boxes and combed for precious metals and things of worth (it won't be like the
depression this time, it will be 10 times worse).
Everything in this country runs off of some form of currency, and who will make the determinate of what is good and what is bad currency on the local
level when the green paper isn't working or is hyperinflated like the Weirmer Republic. And to add insult to injury the checks from the govt. that
more than half the population of the US get in some form or the other don't show up, what do people do. They riot, the go crazy, they are in shock.
Because the deal that was struck by the right was that we will support you as long as whatever you do is done to THOSE PEOPLE and benefit our group.
And for the left they will support you as long as whatever you do it benefits MY group. What it will look like as first will be what happened in
argentina back in 1999 where there economy imploded and middle and upper class people found themselves overnight poor and destitute.
My family fled France before the revelution and has made the US its home since the year 1700. Yes, they were apparently , at least lower echelon
aristocrats; the family name is a legacy of that standing.
I now live on the west coast of the US.
If I have to flee westward, it's going to be a loooong swim!
Probably for the best, though....
Parce que je connais qu'il le Chinios c'est un lange tres dificile!
(Pardon my French, it's been a while since I've used it!)
1. Monetarise the ENTIRE DEBT in a single impact. This would reduce the USA instantly to a Third World Country, Zimbabwe style inflation and with
even the greatest Billionaires barely able to swap their entire fortune for enough Russian roubles to buy a Lada car. For this, it would take
astronomic political guts. The Russians pulled it off in 1989, the German Weimar did it but ended up being run by Hitler and Zimbabwe did it
resulting in most of the country on the verge of starvation, but it is VERY CLEAR that that sort of political will is not around in the USA.
2. The Rats must leave the sinking Titanic before the end. Last ones in it get drowned.
In short, STATES MUST URGENTLY CEED FROM THE UNION TO SURVIVE. The SOviets pulled this off in 1989 as did the Yugoslavs.
3. Entire USA defaults on debt, total collapse of law and order, mass killing that spread to the murder of anyone with even just a college degree.
What will make everything billions of times worse is that the collapse will not come at the time of the Government's choosing. The US Government
may well be planning a controled debt default in the future, but I am convinced it will occur well before the planned date for reasons beyond its
There is a bigger time-bomb about to go off which will wreck the USA.
The United Kingdom is in a way worse cont=dition and Gordon Brown is prepared to sell his soul to be re-elected. An election must occur, by law, by
3rd July 2010. In late March 2010, my guess is that he will try a give-away budget to buy votes. As this beomes apparant, UK Bonds will fall
shrply, and UK bnds will eb downgraded frmo AAA to AA. This will become a self-fulfilling disaster and the Bond Market will crash making refinancing
of UK's debt to pay for interest impossible and trigger a crash in shares. This in turn will smash much of the bankning and finance industry and
force Brown to intervene again to bail out more of the sector, resulting in even higher and more unsustainable debt, triggering a total Bond collapse
and skyrocketing the cost of refinancing the interest payments. With riots in the streets, Brown will turn either to Martial Law or hsi party will be
wiped out in an election, leaving the Tories with the insoluable problem of hyper-stagflation and likely bond default and no way to finance the
staggering debt burden.
Once the crisis over Britain's unsustainable debt becomes clear, people will know that the recovery is over and likewise question the US debt which
is way, way bigger and trigger a collapse in US Bonds and markets and spreading back to the UK for a further round of catastrophy.
By the end of May 2010, Britain and the USA, as we know them, will be over.
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