"The problem with Socialism..."

Time to short the US dollar. Or oil. Or both.

Because, if what this article says comes to pass, and in my estimation it will, both oil and the USD will experience precipitous drops in value.

If what this article say's is true maybe 2012 is of signifigance ...we are all doomed . that sucks casue my daughter is only three ...anyway i hope the u.s. can pull out of this mess .

Paul in calgary

But then again scripture say's the yellow man will take over .

maybe this is all part of it ?

Paul in calgary

I have thought for some time now that the greatest threat facing America is bankruptcy. And should the day come that the U.S. federal government can no longer cut a cheque, it'll make the recent financial problems look like a Sunday picnic, and no one -- not even Canadians -- will remain unscathed.

The best way to mitigate the danger is to ensure that both our government and personal finances are rock solid. So far the Harper government has not delivered, nor has the common citizen.

Maybe Al Gore lost the key to the "lock-box", huh?

And China is laughing all the way to the bank.

Why? The dollar falling will precipitate actual change, not 'hopey change'. The US has a history of getting to the precipice, teetering for a brief moment, and then turning around.

Given a choice between losing 'entitlements', and stringing up 'environmental whackos', the proles will run out of rope so fast you head will spin.

Just the drilling leases currently in the system would generate most of the cash needed to bring the books back in order. As example, in California, just the leases held up by environmental lawsuits would have generated more revenue than the current budget shortfall this year.

As for oil, the current price isn't reflecting the US's drop in consumption, as China and India's increasing volume is holding the prices at the level we are seeing.

Tax and overspend. Tax and overspend.

This turns into overtax and overspend.

For shame.

What is happening in the USA is the best show on earth. It is real drama with real consequences and the way the game is being played has something for everyone. A bit of horror a lot of larceny, fraud, lying, cheating, underhandedness, intimidation, thievery bribery and even a bit of heroism in some quarters.

Great show, great entertainment. That Obama ... what an actor! That Soros, what a producer, that Pelosi ... what a director, that Al Gore, what a subplot character ... This is a movie that will cost billions more than Avatar, but will lose a lot more at the box office, but it is in 3D and you don't need glasses.

Oh dear....

The article is true and I've been saying this for years. I suspect their will be social unrest (in about 10 years) and a movement to equalize benefits between current and future retirees will be the hot topic.

The problem is that the numbers are so high that the reality hasn't hit the regular Joe on the street. It is hard to comprehend how much a billion really is and the politicians are throwing around trillions. For most wage earners, earning a million dollars will take their entire working life, and that is before the government gets their hands on "their" share. Home mortgages are often set up to be paid over 25 and now 35 years. On the national debt and all these bills and bailouts being thrown around, that isn't even chump change in the big picture but actually owning a home is a lifelong goal for most of us. The mind boggles.

kind of like differentiating between a star 10 light years away and one that is 100 light years away, I can't tell the difference. Everyone has lost perspective.

Socialism ends when the socialists run out of other people's money to spend.

Time to invest in companies that make high end printing presses and those that make paper that dollars are printed on.

A couple of things i have learned about the US entitlement system in the last few months:

1. The maximum annual payment (if you being collecting at 65)in the Canadian Pension plan is about 11000. It is taxable income. Old age security max is about 6000 and subject to a 15% clawback above 65000 of taxable income. so the best you can get in CDA is 17000 and it is at least to some degree taxable. It is an indexed-to-inflation benefit more or less.

The US social security maximum is 26,600. It is a TAX-EXEMPT indexed benefit. So a working couple earning a middle-class income is being promised a retirement income of 53000 tax-free(!!) a year. That kind of an entitlement will be fought to be preserved tooth and nail as it has in the past when chenges were attempted.

2. In addition to social security liabilites there are massive state government unfunded entitlement liabilities that are almost criminally rich to the beneficiaries - they are the state-employee retirement pension plans. an example that is by no means unique is the State Of Illinois public employee pension that pays 85% of an employee's maximum annual income as early as age 50 (!) the benefit is indexed and fully funded by the state i.e. no funding from the employees. this liability is going to hit sooner and harder than the Social security liability and the Medicare/medicaid liability especially when you consider the fact that states are not allowed to issue debt - these payments have to be made out of cashflow.

Collapse of the US entitlement ponzis is imminent.

Buy gold people, buy gold.

Head on over to your local post office or bank and start collecting those canadian mapleleafs, or the american eagles, they come in different denominations and everyone should own some.!

Whenever finiancial trouble shows itself, Gold has always been the fallback currency of choice throughout history.

Hmmm, and just think Bush tried to fix that and got castrated.
,

Meanwhile back in the old country, the European Court has determined that Britain doesn't have to index the pension of pensioners if they are retired in Canada, New Zealand and Australia, to name a few retirement spots. Of course if they retire in Europe or stay in the UK then their pension gets indexed for inflation and such.

My two points are: the EU virtually ruling over sovereign countries, and, being farked by those who change the rules of the game that you have been playing by for all your life. I'm afraid that the next batch of Canadian and American pensioners will find that all their contributions will be for not as the piggy bank will be long empty of coin but stuffed with IOUs.

NY income tax refunds are being withheld, until such time at the state has enough money that the checks don't bounce.

Fun, eh?

Alex i have rightn ow about 4k in silver coins i wish i would have bought gold a few years ago but finacially i was just unaware so i will ride the silver also silver is more user freindly as it is not 1k per ounce like gold so i can actually go buy groceries with it if i need to or do what ever ...but yeah buy gold and silver if you can it is alway's good to have some on hand .

Paul in calgary

We have passed the fiscal event horizon. A singularity looms. Debt default, hyperinflation, or something equally traumatic is coming soon.

I was pleased to see someone state the issue this way. I have been bothered by those who state that the debt will be paid back by grandchildren and great-grandchildren. This assumes that the current scheme will last until then, an assumption I do not share. Whether the day of reckoning will be in this cycle or in one or two cycles after that is not as important as the fact that some type of crisis seems to be coming.

The idea of government debt default is an option that few have considered but I suspect certain interested parties in the West have weighed the option of defaulting on US government debt - an action that would affect China in a significant manner. Debt default would have a deflationary effect upon the world economy and the collapse of the US dollar would not be guaranteed in such a situation.

However, the other option of hyperinflation would have a destructive effect upon the US dollar.

Either way, it appears that some type of financial trouble awaits us in our lifetimes - whether or not it is this cycle.

hang onta your hats---hell is coming to breakfast.
Now you know why the lefties believe in "gun control".....
Such a change in the balance of power always ends badly.....
Interesting times ahead....

But then again scripture say's the yellow man will take over .

Posted by: paul at March 18, 2010 2:27 PM

It does not.

The dems of course have a solution. In fact it is a big reason why they see no problem with all of this entitlement stuff.

Cut, or rather SLASH, defense spending.

Found this over at american thinker - a govnr who calls a spade a spade:

..."How does Gov. Christie successfully condemn and destroy this pathologically evil liberal definition of fairness?

"One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life, and nearly $500,000 for health care benefits -- a total of $3.8 million on a $120,000 investment. Is that fair?"

And he continues.

"A retired teacher paid $62,000 towards her pension and nothing -- yes, nothing -- for full family medical, dental, and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it "fair" for all of us and our children to have to pay for this excess?"

http://www.americanthinker.com/2010/03/chris_christies_new_jersey_rev.html

Just to be safe, in the event that the tipping point has been reached, it might be prudent to take some courses in speaking Mandarin. Bread and circuses anyone?

Googling "china bubble" brings up some interesting food for thought.

China appears to be in the mother of all bubbles right now, still buying US Treasuries to keep the yuan cheap. Not everybody thinks its a bubble, but those who do have some pretty strong arguments and evidence on their side. Like Kate posted in January, a whole brand new town in China with no residents. Apartments all sold as investment properties, nobody living in them. Stuff like that is common these days in Chicomland.

Bottom line, centrally planned economies don't work. China has one, its going to crash like a lead zeppelin sometime pretty soon. Probably when Barry bounces his first really big check.

On the gold issue, I don't have any. I have tools, all different kinds. Gold is nice, but you can't eat it and you can't fix your car or your roof with it.

Have to agree with Phantom, gold is only a form of currency and while, if you have some it may be lovely to look at and wonderful to touch, you can't eat it or drink it. If you bury it, it wont grow, if you sit on it, it wont hatch. To be useful it must be circulated, just like paper money, now who would have thought of that.

I invest in ammunition. Not sure about gold, but when all fails, and I have a stash, people from all walks of life will be paying me gold for a few rounds.

There is one insurance broker in Kanukistan, he invested $70,000 in 7.62x51 a few years back. He's already doubled his money.

UHMM I HAVE AMMUNITION AS WELL i am talking about investment ...i know iknow toothpaste could be worth more than gold i understand canned food will be worht alot as well yes yes i know ...i have all of that ..i also have a water purifier and a brother who is an electrician ....i am an aircraft engineer by trade a tin basher if you will i have over 8000 in tools and that does not inclued any of my electric or battery powered tools that is just the stuff i use for aviation also have a tool box big enough to sleep in so yeah i here yall but gold or silver might not be a bad option the govornemnt doesn't know you have it they can't tax it it is reall and with you not in a bank or on paper it is there ...and that is a good thing should you ever need it ...and if you don't it is still a good investment ...also you can melt it down and kill wearwolves with it as well ...so yeah .

Paul in calgary

Agree with Phantom and others that gold is not what you want to be buying now. I've also been investing in ammunition as in a SHTF scenario guns and ammo are way more useful than gold. I'll be happy to trade some 7.62x39 or .223 for gold if we're in a barter economy situation. The 7.62x51 I won't trade. Glad I invested in ammo as its value has doubled over the last couple of years.

Tools are another good investment as well as a generator, lots of canned food, antibiotics and other prescription drugs that might be in short supply and gasoline. Haven't figured out a way to store the gasoline safely even though I've got quite a large lot. Not worried about winters but it does get rather hot here in the summer and my weedwhacker gasoline can bulges quite noticeably during 35 C days. Can't forget about a kilo or so of BHT to add to gasoline in long term storage. A propane powered generator might be a better investment as propane tanks seem to do just fine on hot summer days.

Also, if you can afford to do so, move to a small town as I'd hate to be in downtown Vancouver or other similar sized city when the economy implodes.

To Gord Turk's comments: "One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits." now if the state in question had invested that money in a proper pension fund instead of putting it in general coffers (and returning squat) then there would probably be some money to let the dude retire with what was originally agreed upon. The same thing happened in Canada when the government took over the military pension funds and put them towards general revenues. Creative Bookkeeping 101 folks.

The people who own the fiat money system ( those who own chairs at the Fed reserve) have over extended the currency supply to the point where if the true currency to reserve rates were known the dollar would be worthless. They refuse to contract excess currency supply because people still have sufficient misplaced faith in the dollar foolishly continue to trade with it, propping up the decayed greenback system.

Right now a transnational blended currency is being valuated to replace the current chronically inflated US system. Its owners are about to collapse the old system to install the new one. Whether the collapse of the greenback system is a slow process or a fast catastrophic one, depends on the amount of people wising up and dumping green backs for tangibles, gold, silver or more stable currencies. A greenback exchange "run on the bank" will trigger the monetary system collapse.

Jefferson's and Jackson's predictions of private central banking running a currency system that will sell out the nation's sovereignty will prove prophetic.