Ranting Andy: Sunday Night Special

RANTING ANDY – So here we are, just five days from the debt ceiling deadline, and, as expected, COMPLACENCY is in the air.

No one seems to care how horrible the situation is for the United States, not in the slightest except for token airtime because it has to be MENTIONED.  No analysis goes into such coverage, simply statements such as “Democrats and Republicans are wrangling about the debt limit”, as if it is more a political topic than a financial one.  The politics are certainly more “interesting” than the guts of the issue, although hardly an ounce of charisma emanates from key players such as Boehner (spells like “boner”) and Reid.  Even Obama, whose only real exceptional asset is charisma, looks decidedly less impressive these days, and sounds dumber by the minute.

Frankly, I don’t think Americans are paying much attention to ANYTHING these days except for reality shows, video games, and Lady Gaga, and the mindless media thoroughly reflects this ambivalence.  At this point, the average American is so deeply in debt that nothing seems to matter anymore, so long as entitlement payments continue to come in from the government.  To give you an anecdotal view of how socialist America has become, watch a TV show like “Judge Judy” for a few episodes.  Invariably, each case features people on the dole in some way, shape, or form, in most cases without proving much of anything to get their taxpayer-funded, printed money checks.  In fact, I’d guess at least every third or fourth case features someone that openly admits to defrauding the government to get these funds, but again no one seems to care.

The economy continues to crumble, seemingly at an accelerating rate, but thanks to the PPT the Dow never materially falls no matter how bad the news (no, the levitating Dow is NOT due to rising inflation expectations), just as, thanks to the Cartel, gold is never allowed to sharply rise.  A stray “positive” economic number like today’s jobless claims sub-400,000 print (which will be revised above 400,000 next week) affords yet another 10 AM EST gold smash and bevy of headlines claiming the economy has bottomed, but 20 straight horrible economic numbers never produce a gold surge (or if so, it is capped at 12 PM EST), and yet another day passes, an inch closer to the abyss with no solutions even dreamt of, let alone voiced.

Again, just five days from now the Keystone Kops – sorry, the U.S. government, will make a monumental decision sure to have significant negative ramifications for years to come (no matter what they decide).  As noted in my July 9th RANT, “Debt Ceiling Debacle – Death Blow to America”, the U.S. has raised the debt limit 75 times since 1940, or essentially once a year, with nearly every such increase labeled as “temporary.”  In fact, it was raised nine times during the Bush II administration alone, but such events were never mentioned at all when the stability of the dollar, and America in general, was not in question.

Unfortunately, now it is. 

With QE2 “officially” over (although I guarantee it is still going on covertly), the dollar and essentially all paper currencies hitting new lows against gold and many other commodities, and economic activity declining across the Western world, there is simply no more room to increase debt without hitting a major crisis inflection point.  Conversely, particularly in the United States, there is simply no room to cut entitlements without inviting massive social unrest, nor to cut military spending or Wall Street bailouts as these sectors represent, BY FAR, the largest lobbying groups in America. 

Readers, there is a reason that Mitt Romney is the only real Republican candidate for President, and I assure you it is NOT due to his brilliance or track record.  These days, the only way to mount a significant Presidential campaign is to have the military and financial sectors funding you (and thus controlling your votes), and it appears that only Romney has such funds behind him at this point.

To demonstrate the insantity, Obama spent $521 million to be elected in 2008, compared to the mere $59 million spent by George H.W. Bush just 20 years earlier in 1988!  Does that give you an idea how dangerous the financial and military lobbies have become?  And is it any coincidence that the WARS and FINANCIAL DEREGULATION that have literally annihilated the U.S. as we know it dramatically expanded during this period?

http://most-expensive.net/presidential-campaign-us

Anyhow, back to the topic of this RANT, titled “Sunday Night Special.” 

Complacency may be the norm today, as, frankly, most Americans are exhausted by the non-stop political finger-pointing and just want to see a resolution (not that they’d understand a resolution if it bit them on the nose).  And don’t worry, we still have the PPT, Gold Cartel, ESF, covert QE, government HFT programs (note the past two days’ HUI attacks), and enough partnership with colluding Central Banks (such as the EU, the BOE, and the BOJ)  to keep the markets from imploding beforehand.  These manipulative forces, by my rough estimate, account for roughly 75% of ALL market trading activity, meaning there is little left for free market forces.  But that 25% free market force can dramatically expand during crisis, and wait till you see the crisis upon us now.

The way I see it, there is no substantive plan AT ALL being proposed by either the Republicans or Democrats.  The GOP is grandstanding with draconian (and impossible) spending reduction targets, whose only real target is to fool Americans into thinking they are fiscally “conservative.”  They know very well that such plans could never pass into law, and frankly if they did you’d see immediate social unrest that would make what we’ve seen in Athens thus far look like Romper Room.  As for the Democrats, they frankly have no plan at all, grandstanding conversely by pretending they are a champion of the people by proposing tax increases for the “rich.”  Such tax increases, too, have no chance of being passed, and if they did business activity would immediately plummet.  Corporate tax rates in America are already the highest of any industrialized country, and raising such rates further (on the companies and their “rich” owners”) would likely cause the same type of reaction as the communist doctrines instituted by the fictional U.S. government in “Atlas Shrugged”.

Now that we’ve passed this period of peacock-strutting, with both parties lamely making their points, we are faced with the real issue; there is NOTHING substantive on the table, and time is running out.  Heck, Congress doesn’t seem capable of passing a bill that is less than 1,000 pages long, and with just five days left there no longer exists the time to even TYPE 1,000 pages, much less the most important 1,000 pages of this generation.  We are now in the “deer in headlights” stage, where both parties don’t know what to do at all, it seems.  Following his pathetic, nationally televised speech on Monday, Obama has been eerily quiet, praying for someone to come up with something, while Boehner and Reid are displaying their complete lack of competence for the entire world to see.  No substantial plans, and just five days left!

So what do I expect to happen, as well as the ramifications?  I recognize, of course, that making short-term predictions can be hazardous to one’s reputation, but it shouldn’t matter too much in this case because the impact on GOLD AND SILVER will be the same no matter what these buffoons decide.

I expect yet another weekend of suspense, where as usual nothing gets done during the week so an EMERGENCY SOLUTION needs to be crafted around a large boardroom table in Washington on Saturday and Sunday. 

Remember those fun days in 2008 and 2009, when weekend bailouts (AIG, FNM/FRE, Merrill Lynch, Wachovia, Citigroup, etc.) were crafted on Sunday night, to be released just in time to prevent “market meltdowns” in “Asian trading”?  Such acts of desperation are ominous signs that FINANCIAL CRISIS #2 is nearly upon us, and if you remember last weekend we experienced the same propaganda that something MUST be done by Sunday night, OR ELSE.  Nothing was done, of course, due to the aforementioned political grandstanding, but then again we really had another week to get things done, which appears to have been largely squandered (as I write, headlines are hitting the tape that ABOLUTELY NO PROGRESS is being made).

I assure you, this weekend WILL BE a true crisis, as a debt limit extension must be signed by Tuesday night or the U.S. will officially default on its obligations, spurring a massive financial conflagration that will likely be sparked by everyone’s favorite WMD’s, the hundreds of billions of outstanding CREDIT DEFAULT SWAPS betting that the U.S. will default (and, just a guess, likely still backed by AIG).

As we head into tomorrow (Friday) afternoon, I expect a heightened level of rhetoric about how dangerously close the U.S. government (and by proxy, hundreds if not thousands of other sovereigns and municipalities) is to such an event, and subsequently a fever pitch of mass media focusing on how a deal MUST be announced by Sunday night before Asian trading commences.  This event will gain vastly more attention this weekend than last, and I fully believe that, going INTO the weekend, there will be essentially nothing substantial on the table from either party (or the suddenly quiet “Tea Party”).

But come Sunday night, I expect a triumphant, “bipartisan agreement” to “temporarily” raise the debt limit by roughly $1 trillion, to $15.3 trillion, with essentially ZERO spending cuts or tax increases to back it up – in essence, the worst possible scenario for the dollar and the U.S.’s credibility.  However, a carefully crafted communiqué, possibly accompanied by a press conference, will state that “we are confident that a more substantive agreement will be reached by year-end, and thus we are creating a no holds barred, bipartisan committee to investigate a solution.”

The White House propaganda machine will then turn up the jets to involve interviews with every possible biased media outlet in America, from “60 Minutes” to CNBC to the Wall Street Journal to even the ultimate sell-out, Warren Buffet, to convince the sheeple that government is competent and working for their best interests.  And, if they’re lucky, the PPT/Cartel/ESF/HFTs will be able to buy them a day or so of “positive market reaction” before reality sets in.

And that reality will be the mother of all GOLD and SILVER rallies, as international (and possibly U.S.) rating agencies start to downgrade U.S. Treasuries, while even the average investor will start to realize the U.S. debt has not a chance in hell of ever being repaid, or for that matter of even contracting.  Interest rates will become involved in an incredible battle between the bond vigilantes of the real world and the covert plus overt QE of the manipulative world, a standoff that will be long and strong, but likely eventually won by reality.  Remember, even the SLIGHTEST increase in interest rates spells certain, immediate catastrophe for America, so do not underestimate how much printed money (U.S. plus Japan/EU/BOE, etc.) will be put forth in this WAR OF ALL WARS, which will rage on until the bad guys are defeated.

Again, I cannot emphasize enough that the END IS NOW, and frankly I don’t see how this debt ceiling chapter can be passed without the U.S.’s credibility dropping DRAMATICALLY in the eyes of the ENTIRE WORLD, particularly in those countries – such as China, India, and Russia – whom are desperately buying gold and silver in preparation for a mind-blowing decline in the value of their still enormous dollar reserves.

PROTECT YOURSELF, and do it NOW!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: