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Ardent Listener
29th November 2009, 20:17
http://www.ft.com/cms/s/0/ee761ae2-d443-11de-990c-00144feabdc0.html?nclick_check=1

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silversurfer1
29th November 2009, 20:23
Obama is just a pop culture figurehead put in office to appease the idiotic masses. He takes his marching orders from the criminal banking cartels. That asshole knows exactly what he is doing. It's all political theater.

Ardent Listener
29th November 2009, 21:11
I got ahold of the text.

ARTICLE IS AS FOLLOWS--COPIED FROM THIS FORUM (http://www.alipac.us/ftopict-178716.html)--:

Obama warns on US public debt pile

By Edward Luce in Beijing and Krishna Guha in Washington

Published: November 18 2009 13:35
Last updated: November 18 2009 21:07

US President Barack Obama warned that the US economy could head into a “double-dip recession” unless urgent steps were taken to rein in mounting public debt.

The US president’s remarks – in an interview with Fox News in Beijing on Wednesday, towards the end of his eight-day tour of Asia – marked his strongest language yet on the necessity of putting public finances back on a sound footing.

“It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a double-dip recession,” said Mr Obama.

A 10.6 per cent plunge in housing starts in October – led by collapse in the apartment business – highlighted the dilemma facing him as he seeks to tackle the deficit without undermining a fragile economy.

“It’s about as hard of a play as there is,” Mr Obama said, adding that his team was trying to set up a “pathway long term for deficit reduction” without pulling a lot of money out of the economy in the short term via tax rises or spending cuts.

The mood in the US has already swung in favour of deficit reduction, with Republicans attacking Democrats’ plans for more spending to support jobs.

Washington-based analysts said the president was probably trying to prepare public opinion for a tough budget in February – while leaving open some space for measures to reduce unemployment, now at 10.2 per cent.

“I have no doubt that the White House is going to produce a tough budget,” said Maya MacGuineas, director of the Peterson-Pew commission on budget reform. “The question is whether they are going to spend political capital and push their budget in Congress.”

The timing of Mr Obama’s remarks, which came at the end of his three-day trip to China, is likely to fuel speculation that his Chinese hosts delivered stern private warnings about the consequences of continuing high US budget deficits. China, the biggest foreign holder of US Treasury bonds, has become increasingly vocal in its fears on the value of its dollar assets.

White House officials say the US fiscal situation had no impact on Obama’s interactions in Beijing, even though some observers presented his trip as that of a debtor visiting his banker. “He pulled no punches,” said Mike Froman, a senior national security adviser.

A day earlier, White House budget chief Peter Orszag said the US had to bring down its deficit to about 3 per cent of gross domestic product within six years – a reduction of about one percentage point of GDP based on the administration’s current estimates.

TuffyLess
29th November 2009, 21:19
thanx ardent :)
couldnt make it in to view it.

Ringramjr1
29th November 2009, 21:20
"Obama is just a pop culture figurehead put in office to appease the idiotic masses. He takes his marching orders from the criminal banking cartels. That asshole knows exactly what he is doing. It's all political theater."

Well said Silversurfer and spot on.

Ardent Listener
29th November 2009, 21:40
So were do you guys think Obama would make cuts to present a "tuff budget"? Remember, we have mass unemployment already, plus we are at war on at least two fronts. We can't cut social programs of course. Maybe instead we will soon all :rolleyes: help out our nation by paying more taxes.

Relayer
29th November 2009, 22:35
I dont believe a word of it. First off, there is the assumption that we are out of recession. Otherwise, no double dip.

And even if the economy were to stabilize at its present level, the plan is for long term deficit reduction. How will that help keep us out of a 2nd dip over the next 12 moinths? Again there is the assumption that the government can control the state of the economy!! What have they done in the past two years that has addressed the problems that got us into this financial mess? What do they plan to do in the future other than raises taxes and the cost for health care, raise taxes for carbon trading and the cost of all energy, raise taxes to finance the occupation of Afghanistan.


Just more propaganda!!

akak
29th November 2009, 22:49
"Double-dip Recession" my ass!

Anyone trying to peddle the feeble lie of "recovery" in these last months has just proven themselves a total shill for the financial and political powers-that-be.

One might as well try to label World War II as a "double dip skirmish"!

Ardent Listener
29th November 2009, 22:58
"Double-dip Recession" my ass!

Anyone trying to peddle the feeble lie of "recovery" in these last months has just proven themselves a total shill for the financial and political powers-that-be.

One might as well try to label World War II as a "double dip skirmish"!

I don't view it as a recovery, but I am expecting a new wave of economic collapse that will set us deeper yet into this depression. The great depression had such waves back in the 1930s. Hang on it's going to get even more nasty I'm afraid.

SeekrBrnEvryMin
29th November 2009, 23:28
I think the jist of his announcement is this:

“It’s about as hard of a play as there is,” Mr Obama said, adding that his team was trying to set up a “pathway long term for deficit reduction” without pulling a lot of money out of the economy in the short term via tax rises or spending cuts.

Obama, here, says he wants to program some set of measures that, in the short term, that will not raise taxes or cut spending.

This in concert with the Chinese (note the political occasion) and their concerns about the health of the USD.

Let's try to figure out what Obama intends to do. It may be helpful using the process of elimination.

First, he is speaking of the short term, not long-term. Long-term, he certainly will program in tax hikes. As for reductions in spending, you'd think the Congress would be looking for low-hanging fruit, but no such luck. That part of the budget seems to be what is most susecptible: dollars for jobs.

So, if tax increases and short-term spending cuts are what Obama is ruling out in this press release, how else could he trim the deficit using short-term measures, without tax increases or spending cuts, for long-term gain?

It must be through monetary policy, and what he has in mind is being coordinated with the Chinese.

I am not smart. But the only way I know to reduce the deficit in the short term is to pay off debt. There's some conjecture out there that Fed policy is to work to strengthen the dollar. That doesn't seem to help in a near-term effort to reduce the deficit.

Actually, I think we're striking a deal with China to work together (their yuan is pegged to the USD) to keep a status quo in terms of currency and return to China the wealth they've earned.

I think China is going to be receiving a few shipments of US gold. And so will some of the other international creditors of the US.

This give us the latitude to satisfy our creditor customers and continue our business of manipulation over the short term, and since the art of manipulation is our forte, we can reap a deficit reduction over the long term by buying time with our creditors.

This would be smart, wouldn't it? Selling gold at the high point, reducing debt obligations near-term, reduce dollar risk and the need to raise interest rates to keep our creditors buying our debt, and coordinating with China all the way?

Relayer
29th November 2009, 23:51
The Federal Reserve Becomes the ‘Buyer of Last Resort’

November 29, 2009 – While the debate continues whether inflation or deflation will be the dollar’s eventual fate, the Federal Reserve is pursuing a pernicious policy that is insidiously debasing the dollar. This policy has generally been met with indifference, if it has even been noticed at all.

The inflation/deflation debate focuses only on the ‘quantity’ of dollars and completely fails to address an equally important monetary facet, the ‘quality’ of the dollar. The Federal Reserve is debasing the dollar by purchasing inferior assets of poor quality. These assets are mortgage-backed securities issued by federal agencies like the insolvent and for all practical purposes bankrupt, Fannie Mae.

These are assets neither the banks nor other investors want. If there was a demand for these assets, the Federal Reserve would not need to buy them. Instead of acting in its historical role as the ‘lender of last resort’, the Federal Reserve has on its own expanded its mandate to become the ‘buyer of last resort’.

By purchasing mortgage-backed securities, the Federal Reserve is debasing the dollar. Just how pervasive – and therefore serious – this debasement has become is apparent from the following chart prepared by BusinessInsider.com.

According to its latest report, the Federal Reserve now owns over $1 trillion of mortgage-backed securities, which is 45.6% of all assets owned by it. One year ago mortgage-backed securities were only 0.6% of the Federal Reserve’s total assets.

The Federal Reserve is very highly leveraged, much more than most banks. It is carrying $2,157.0 billion of debt on $52.8 billion of capital, giving it a leverage of 40.8-times more debt than capital. The mortgage-backed securities it owns are 19-times greater than the Federal Reserve’s capital, meaning that if the true value of these assets is less than 5.3% of their book value, the Federal Reserve’s capital is depleted, effectively making it another insolvent institution.

See Chart
http://forums.silverseek.com/attachment.php?attachmentid=1223&stc=1&d=1259556595

Given that Fannie Mae is itself insolvent and most other mortgage generating federal agencies are not far from perilously sliding down to that same dire financial condition, it is reasonable to assume that the true value of these mortgage-backed securities is less than 94.7% of their book value. Consequently, the Federal Reserve is therefore – on a strict accounting basis – insolvent. It remains liquid because banks continue to provide it with funding and because people continue to accept in commerce and use without question the Federal Reserve’s liabilities, i.e., the paper currency it issues. But for how much longer?

On December 3rd, Federal Reserve chairman Ben Bernanke will be center-stage at the Senate for his re-confirmation hearing for another term. What should be center-stage and examined closely, however, are this professor’s chalk-board theories that he is using in his untried and untested experiments to solve the ongoing financial crisis.

One doesn’t even have to read a book on monetary history to know what the Federal Reserve should be doing. We only have to recall what Paul Volcker did when he was Federal Reserve chairman at the end of the last boom-bust cycle. He kept raising interest rates to defend the dollar.

Mr. Bernanke of course is doing the exact opposite with his zero interest rate policy, on the theory that he can save the economy without damaging the dollar. However, it is becoming clear – and the above chart is only one example – that the dollar is being irreparably damaged. Consequently, rather than saving the economy, Mr. Bernanke is hastening the further downfall of the economy and the dollar’s inevitable collapse.

Relayer
30th November 2009, 00:17
So how does Obama pay off the debt? With the printing machine (monetary policy). Even that cannot pay off the debt. This is no possibility of the US paying its debts. They are beyond the point of no return. They can do one thing. Print more money.....and hope everything turns out ok.

Obama's speech does not even begin to address the problem of the government debt.

US and China cooperating on a strong dollar is propaganda. The dollar cannot be strengthened as it is being debased.

SilverLite
30th November 2009, 00:36
So how does Obama pay off the debt? With the printing machine (monetary policy). Even that cannot pay off the debt. This is no possibility of the US paying its debts. They are beyond the point of no return. They can do one thing. Print more money.....and hope everything turns out ok.

Obama's speech does not even begin to address the problem of the government debt.

US and China cooperating on a strong dollar is propaganda. The dollar cannot be strengthened as it is being debased.
when in debt, print more money... when in doubt, hold your money... when shtf, wipe with money... :)

SeekrBrnEvryMin
30th November 2009, 00:39
So how does Obama pay off the debt? With the printing machine (monetary policy). Even that cannot pay off the debt. This is no possibility of the US paying its debts. They are beyond the point of no return. They can do one thing. Print more money.....and hope everything turns out ok.

I was going to suggest that the US and its backing bankers have ways to manage debt to their advantage, including PM and other hard-asset investors, and that the game is to milk the dollar for all it's worth, and the game is worth another 25 years' worth of playing, but if you say 'no,' and hyperinflation is all you see, then that's okay by me...

Obama's speech does not even begin to address the problem of the government debt.

No, but it gives political clues as to what US intentions are, and if you read the tea leaves correctly, you might get yourself into a position to make some money.

US and China cooperating on a strong dollar is propaganda. The dollar cannot be strengthened as it is being debased.

The dollar can, and will, be managed. That cow still has a lot of milk.

Relayer
30th November 2009, 01:01
The problem is the shadow banking system. 1 quadrillion dollars in OTC derivatives (and still rising) cannot be managed!

SeekrBrnEvryMin
30th November 2009, 09:40
Luke, you do not know the power of the Dark Side.

I'm with you, Relayer, all my FRNs have been converted.