The Impending US Bankruptcy

"There are other obligations, too, that aren't calculated into the national debt, or even the $70 trillion, but for which the government remains at risk. ... If the price pendulum swings back to 2000, we'll see the mortgage default rate, currently at a record 9%, soar. We'll also see more Americans file for personal bankruptcies and default on their credit cards. ... Large-scale bank failures could leave the FDIC short hundreds of billions of dollars. The total of insured deposits in this country is $4.5 trillion. ... The earthquake will come via a collapse in the market for U.S. government bonds as domestic and foreign investors realize that the only way Uncle Sam can meet his future spending obligations is to print massive quantities of money. The result will be sky-high inflation and interest rates and, most surely, a prolonged reduction in output and employment, This could happen today. It could happen tomorrow. But it will happen here just as it has happened in every other country that has tried to spend far beyond its ability to pay", Lawrence Kotlikoff (LK) at Forbes, 29 September 2008.

"The Treasury in going to devalue the US dollar by 30 to 40 percent, or more, from here. Why? Because they have no choice. ... The devaluation will be coated with a minty flavor shell of verbage and G7 misdirection and government programs with lots of letters in the names. ... Remember, its a secret. Don't tell the Chinese, foreign holders of US debt, and especially the US middle class whose life savings are going to be wiped out", Jesse, 8 October 2008, the link: http://jessescrossroadscafe.blogspot.com/2008/10/shhhhhh-here-is-secret-worth.html.

"Various level-headed economic pundits have opined that the $700 billion Bailout cannot possibly succeed. ... And the Bailout approaches $2 trillion now. Except for dedicated pros, it's impossible to keep tabs on its total size anymore. ... The '08 elections are being contested by a man who is so tainted by anti-American poison that, if elected President, he would not pass a Secret Service background check to be his own bodyguard. ... And the economic crisis is a mark-to-market not only of our financial assets, but also of our fictitious weltanschauung. To begin with, an economy based on consumption, borrowing and speculation rather that on production, saving and investment is a greater fool game bound to self-destruct. ... When a man who holds an MBA from Harvard advises his nation to go out and shop on 9/12, something is wrong with Harvard. When the American Dream has morphed from having personal freedom, to owning real estate with no money down, something has gone wrong with American dreaming. ... An overlord of cultural and economic saboteurs is in control. Their Bolshevik predecessors wreaked havoc by exploiting differences between the classes, but the new breed has accomplished the same by exploiting differences between the races. ... An economy cannot be bailed out that allows millions of terminal savages to wreck and terrorize its cities under the banner of "F**k Whitey'. An America that sends its National Guard to bring peace and order to Baghdad and Kosovo rather than Philadelphia and Cleveland cannot be saved from the mark-to-market of history. ... Starting with demographics. Because of all the answers to any question at all that concerns the future of the [US], the most important is Demography is Destiny. In 1965, America's ruling class decided that the problems with the black minority were not enough. This almost-vanilla ice cream needed more Tabasco. A country that was the envy of the world in every material and political area and many cultural ones as well, began the wholesale importation of the Third World onto its shores at the rate of over 1 million per year, not counting illegals, refegees and asylees. So now the ice cream is 1/3 Tabasco, and in two decades it will be 50%. ... One wonders whether the inspiration for this came from the great success stories of the multicultural late-Roman, Russian or Austro-Hungarian Empires. The enthusiams did not abate despite the fate of Yugoslavia and Czechoslovakia, Rwanda, Kashmir and Iraq. ... Wasn't there something in Federalist #9 and #10 aabout the destructive tendency of factions? But to understand that doesn't require the genius of Hamilton or Madison. It takes common sense at the level of a 14-year-old who has not attended an American school in the last 40 years. ... America already spends twice to three times as much on education per student as dozens of countries thaty outrank it in scholastic achievement. American schools are failing because they are full of sub-85-IQ imported children from unassimilable minorities. ... Unless he has been stung by a liberal encephalitis mosquito, anyone who had spent time among the nonwhites in the US or abroad knows that, in its obsession with white racism, the American society of 300 million is enagaged in a collective act of moral masturbation the like of which may have no precedent in history, excepting China's pre-1976 cult of Mao and the EU's cult of Islam. ... The Russians have a despotic leader who does what's best for her, her being Russia. He will be remembered by a grateful people as one of the five greatest sons that nation has ever produced. America has leaders who do what's best for Iraq, Albania and South Korea. Who work for Pakistani democrats, Chinese arms manufacturers, Chechen warlords, Bosnian mullahs or American mullahs. ... A bonfire of a trillion dollars can do nothing for a slumbering slob. But history's mark-to-market to Third World status may, if we are lucky, awaken a sleeping giant", Takuan Seiyo at Gates of Vienna, 14 Ocotober 2008. The link: http://gatesofvienna.blogspot.com/2008/10/real-mark-to-market.html.

LK, a Boston University professor sings my song.

Jesse, I'll give you the benefit of the doubt. I assume you mean 30-40% in the next say 3-5 years. I expect much more over the long term, see my 4 July 2008 post.

Can you believe Seiyo is an Ivy Leaguer too? A Wharton MBA at that.