International Male: The US federal government has actually raised the so-called financial obligation ceiling 104 times because 1944.
Shouldn’t they call it a debt target rather of a financial obligation ceiling?
Is this whole thing a farce?
Doug Casey: The circumstance is entirely and irredeemably out of control. It’s a farce. Quite absurd, except for the truth it’s so deadly major.
Can they reduce the financial obligation ceiling or the quantity of debt? And even decrease its growth at this point? No.
The circumstance is beyond redemption due to the fact that many US government expenditures go to pay entitlements– Social Security, Medicare, Medicaid, food stamps, and many other types of welfare.
Those things will be extremely hard to cut at this moment; breaking the doggy meals of countless corrupted Americans would trigger discontent. Plus, the so-called “defense” budget, which mostly supports the military/industrial complex while fomenting conflict. It’s actually much larger than disclosed due to the fact that it needs to include $50 billion of foreign aid, the cost of running outrageously big embassies over the world, the CIA, and black spending plans of all types.
On the other hand, all US government companies are bent on broadening themselves. The bureaucrats who run them realize that if they don’t grow the budget every year, they decrease their possibilities of going from one GS level to the next. Their success is based upon managing more people and investing more cash. Naturally, all these companies grow like cancers.
As a result, the “financial obligation ceiling” is a fiction. It will avoid of control unless there is an overall reorganization of the government– which itself would be dangerous. And that’s not going to take place up until we have a financial disaster that leaves absolutely no option.
International Male: You have formerly mentioned the US federal government should default on the national financial obligation.
What are the reasons for that?
Doug Casey: I know it sounds outrageous to propose the United States federal government default on its national financial obligation. Of course, they do not think it will ever be needed since, as numerous top-level federal government authorities have actually explained, they can simply print cash to settle the financial obligation.
Nevertheless, I disagree. What are the reasons for doing something as relatively devastating as defaulting on the debt? I’ll provide you at least 5. Stick to me. Let’s conduct an outrageous however not unreasonable idea experiment.
First, disallowing default, future generations of Americans will be become serfs to pay off the financial obligation. Profligate individuals have actually added the debt, however everyone’s kids and grandchildren are stuck with having to pay it off. That’s simply unethical. If you have any take care of the future at all, future generations should be conserved from becoming serfs to pay it off.
Second, it would punish the enablers who provide the United States federal government money. People who provide the United States government money facilitate it by doing all the silly and destructive things it does. They should not be rewarded; they should be punished.
Third, main default is better than the alternative. It’s like a hundred-story structure that will collapse. If that holds true, should you wait up until it collapses randomly and unpredictably, or should you have a controlled demolition!.?. !? It’s not an enjoyable option, however it’s the much better option.
4th, default would make further borrowing on the part of the US federal government difficult, a minimum of for a while. It would be exposed as an unreliable entity, like the Argentine federal government, which defaults all the time. People would still idiotically provide it more cash, however a default might decrease the rate of boost in the United States federal government’s size.
Fifth, it’s almost required that the debt goes away to assist de-financialize the US economy. The US is enormously over-financialized. It’s all about buying, selling, developing, and product packaging financial instruments. Government financial obligation, with the help of the Fed, is the actual engine of inflation. Defaulting on the nationwide financial obligation would pave the way for the reinstitution of a sound, redeemable, commodity-based cash. Individuals would need to concentrate more on real wealth than counterfeit monetary wealth, real engineering, rather than monetary and social engineering.
Of course, an objection reasonable people would make is: “If you default on the financial obligation, it’s going to be a catastrophe.”
My answer is that just because all the paper financial obligation of the US federal government goes away doesn’t mean the real wealth worldwide will disappear. The farms, factories, innovations, and the abilities of the employees, will still exist. However on a sound foundation. And with some new owners.
In addition, I ‘d point out that the US Government isn’t “we individuals.” It’s ended up being a discreet entity with its own interests, like a giant corporation. If it states personal bankruptcy, it’s a problem for its employees and clients far more than for you, the taxpayer.
Those are a few of the arguments I ‘d make for defaulting on the nationwide financial obligation. However it’s simply a rather academic idea experiment. The powers-that-be will choose to develop the present house of cards greater, most likely propping it up with FX controls, Reserve bank Digital Currencies, a Social Credit System, much greater taxes, more inflation, rate controls, and god understands what else in the years to come.
The default will happen, however more gradually, through the subtle fraud of inflation, which is actually the very worst and most unethical method to default.
International Guy: Paul Krugman and other mainstream financial experts have proposed the US government concern a trillion-dollar coin to purchase up the federal financial obligation.
That “severe” people can advance such a clownish solution shows that it’s all an absurd charade.
What is your take?
Doug Casey: When you’re using fake currency as an alternative genuine money, it’s inevitable that soothsayers will come up with ridiculous solutions. Krugman isn’t an economic expert; he’s a political apologist. And a fool. He does not describe the method the world works, but the method he ‘d like to make it work– utilizing coercion and scams, not voluntarism and the marketplace. Every concept he has is so stupid that it’s criminal.
The solution to this issue is to return to a product cash. Money must be, as soon as again, just a legal tender and a shop of worth. It might no longer be utilized as a political football.
And the US government should be cut in size by 50, 75%, or 95%. Who knows how deeply you can cut the size of the United States federal government up until you try doing it? But it’s essential, at least if what remains of the concept of America is going to survive.
Using commodity cash will, itself, significantly scale down the US federal government. The United States State has actually become a behemoth and a parasite. It’s a far bigger threat to the average American than the Russians, the Chinese, the Iranians, or all of them together. Returning to sound cash and a small federal government would make for a more enjoyable, thriving, and more secure world– although the procedure of doing it would be unpleasant for some people.
On the bright side, the only people who will be seriously hurt are the parasites living off the federal government. I say to hell with the parasites. They must be inconvenienced.
International Male: It’s tough to believe the US government was ever debt-free.
However it happened once– in 1835– thanks to President Andrew Jackson. He was the very first and only president to entirely pay off the national financial obligation.
Jackson also shut down the Second Bank of the United States, the precursor to the Federal Reserve, the US’s current iteration of a reserve bank.
It’s unimaginable a contemporary US president might or would do such things.
Provided the useful reality of the world today, where do you see the federal financial obligation going, and what are the ramifications?
Doug Casey: It was terrific that Andrew Jackson paid off the national financial obligation, something that Alexander Hamilton, with his deformed ideas of economics, sold to the nation. But it’s now absolutely impossible to settle $32 trillion of acknowledged financial obligation, scores of trillions of contingent liabilities, and scores of trillions more of unacknowledged financial obligation.
I want to mention that there really have been previous defaults by the US government. For example, Abraham Lincoln, during the War between the States, defaulted by printing up so-called Greenback currency.
Roosevelt defaulted on the debt by fraudulently devaluing the dollar, raising the cost of gold from $20.50 to $35, however just after confiscating it from people. That was a default. Then there was Nixon, in 1971, defaulting on the pledge to pay foreign federal governments at $35 gold. Now the dollar is only worth 1/2000th of an ounce of gold.
International Guy: Is there any way to turn lemons into lemonade and benefit from this scenario?
Doug Casey: Let’s not sugarcoat the circumstance. The genuine concern is how to profit from the collapse of an overextended and corrupt empire.
It makes good sense to look at the historical precedent, like the Roman Empire. Existed any method to make money from the collapse of the Roman Empire? Well, some people did, I suppose. However the requirement of living collapsed for almost all its citizens throughout the occurring Dark Ages.
Is there any way to benefit from the collapse of Western civilization? That’s so serious that it’s nearly like asking whether it’s possible to benefit from an asteroid hitting the Earth. The best you can intend to do is insulate yourself as much as possible.
At this point, the best method to be harmed least, or potentially even benefit within an extremely bad situation, is to own gold, silver, and other commodities. And to improve your skills as a speculator. Remember, the majority of the real wealth worldwide is still going to exist; it’s just going to change hands.
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