We Are Now Facing A Catastrophic Situation

Greetings,

We Are Now Facing A Catastrophic Situation

Today a 50-year market veteran warned King World News that we are now facing a catastrophic situation.

“The richest one percent of this country owns half our country’s wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It’s bullshit. You got ninety percent of the American public out there with little or no net worth.
I create nothing. I own.

We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you’re not naive enough to think we’re living in a democracy, are you buddy?

It’s the free market. And you’re a part of it. You’ve got that killer instinct.
Stick around pal, I’ve still got a lot to teach you.” — Gordon Gekko (Wall Street)

John Embry: “I think the global economic, financial and political situation becomes more fraught with danger every passing day. The central banks are essentially impotent now in the face of an insoluble global debt and derivatives situation…

“The have now been reduced to running their mouths and providing whatever amount of liquidity is required to keep the whole edifice from imploding.

It would appear that the U.S. Fed has painted itself into a corner with its promise to raise rates. They have waited far too long. No the U.S. economy is giving ground noticeably, despite the government’s bogus economic statistics to the contrary.

U.S. Dollar Under Attack
This makes a rate increase clearly the wrong strategy at this point in time. However, perhaps their real concern is the U.S. dollar. The dollar is now overvalued from a trade perspective and it is also seriously over owned. A number of dollar holders, China and Russia just to name two, are making noise about eliminating the dollar from global trade transactions. This has been a massive source of demand for dollars.

At the same time, the petrodollar aspect is in increasing disarray as the major petroleum producing nations are no longer accumulating dollars, but rather being forced to redeem them in order to meet mounting deficits. It’s just a matter of time before the U.S. dollar is replaced as the world’s reserve currency, and the implications of that in terms of the living standards for North America is very disturbing to put it mildly.

Eric, when you look at the U.S. debt situation it is truly mind-boggling. Funded federal debt is now moving above $19 trillion, which is comfortably in excess of U.S. GDP. This is a situation which is always a precursor to a debt crisis. However, that is the least of their problems. Off balance sheet debt is in excess of $5 trillion and unfunded liabilities are several multiples of the funded debt……more here

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We Are Now Facing A Catastrophic Situation