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California's Default Is Certain

I would not be surprised if at the heart of the matter California needed to keep deficit borrowing for operations because of its lavish retirement program.
The average Social Security payment is like $13,600 a year and average California state retiree is paid $30,000 to $40,000 a year.
A retired San Francisco fire chief reportedly has something like a $240,000 pension, plus a current city budget officer job that pays him another $170,000 a year.
California presumably will cut programs for the huge throng of illegal immigrants they have welcomed into the state, in defiance of immigration laws and common sense. Even California has proven that unrestrained immigrant growth in a nation with a zero native population growth rate harms a fragile environment as well as economic environment.
The rising tide of taxes, the overcrowding in cities, the traffic snarls, the urban sprawl prompted entrepreneurs to flee California. If the state had cultivated a more stable and sustainable environment, these emigrants would have still been around to help with a solution.

Washington's Dilemma: This Isn't a Recession, It's a Collapse

California should immediately merge with Mexico. The new combined nation should issue a new currency, the Cuero, which will solve all their problems.
A new currency will solve everything, just as merger of smaller banks into ever bigger banks, solved the earlier banking solvency problems.
That retired San Francisco fire chief who has a $240,000 annual pension plus a current $170,000 city budget job will, I am sure, be more than happy to accept full compensation in Cuero's rather than 50 percent compensation in U S. fiat dollars.
Bigger and better. It's the solution to everything. And so much more efficient. Jobs eliminated allows wages to be converted to debt service payments.

The Next Major Financial Crisis

The looming credit card crisis can easily be papered over with more handouts from the Federal Reserve, which will charge U. S. taxpapers interest on said handouts.
Of course the inability of U. S. taxpayers to pay back the credit card handouts plus interest (presumably the pre-set default rate of 29 percent) will be the crisis after the credit card crisis.

Will Chimerica's Demise Take Down Global Economy?

It has been pointed by others that the young United States experienced some of its greatest internal economic expansion when tariffs were routine in the 1800s.

How can protectionism harm the U. S. if it results in higher wages and higher purchasing power for Americans overall?

Free trade - which swept not only U. S. but also Mexican and products from other nations off the Wal-Mart shelves during the Asian currency crisis - have definitely contributed to the economic collapse.

Cheap foreign goods that put American production workers out work resulted in lower wages for keeping up with the all important usury banking control system. The banking system could not go on if its customer base is no longer getting expanding wages to pay compounded interest. The system cracked from the divergent forces.

I am still surprised economists have not reached that consensus yet.

Economic Collapse Is Accelerating

I have read elsewhere there are up to 18 million vacant homes - and you report that there are more to come.

People who lose jobs cannot pay mortgages - and they can't pay rent either. In the last Great Depression exended families moved in together for a decade until the storm had passed. So buying a home to rent out could be a speculative venture in some markets.

The reason why Jeff Nielson's view and the typical CNBC guest are not in synch is due to the massive financial help the government and the privately owned Fed gave to only the banking - financial sector. If they had not done that, a lot of talking heads on CNBC would know a lot of unemployed financial people - or be unemployed themselves - and they would grasp what Main Street is experiencing.

A Dire Warning for the U.S. Economy

Jeff Nelson is correct. Both parties are essentially the same. As Larry Bates describes it, one is going towards socialism at 80 miles an hour and the other at 40 miles an hour.
Look at the collectivist response last autumn when the banking system was paretially acquired by the government, which had allowed banks to get too big in the first place.
When George Green, a Republican, was unsuccessfully recruited to be Jimmy Carter's campaign finance chairman for the 1976 campiaign, then Fed Chairman Paul Volcker told Green his party affiliation was irrelevant becaue "we control both political parties."
However, I wonder why the British "commentator" Abrose Evan-Pritchard cites the rise in U. S. militia groups. The U. S. government has always been paranoid that the armed force it uses to install totalitarian governments in other countries might be attempted here. But that is clearly just psychological warfare to make the general public fearful of patriots who love the country more than a world government.
Ambrose-Pritchard and the U. S. public should know by now that Russia and the czar did not fall at the hands of a public militia or even a revolution. The czar was really betrayed by his own Masonic palace guard, such betrayers as General Witte, who later tried to mount a counter revolution and was killed.
While the government tries to stir up the public to fear "militia", which is essentially just a bunch of independent unorganized deer hunters, true American patriots and a few retired generals see the real threat is infiltration and overthrow of a representative government from within the government itself.
It is the increasing realization that the top most levels of the U. S. government seem to reflect values and actions that are un-American that really has the government paranoid. The occupied government fears it has been found out.
Originally, the American people fought against British tyranny. Now, the U. S. government is accused of killing maybe a million women and children in Iraq, a country that never attacked the U. S. and could not if it wanted to. Suddenly the U. S. is kicking around the weak in a country it has no logical reason to be in.
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Creating a scenario so the government can impose martial control here is always a possibility. The Lusitania, the Gulf of Tonkin, Pearl Harbor, the attack on Fort Sumter are widely acknowledged to have been invited or perhaps even promulgated to create a change in mass consciousness that would support war.
The riots in Seattle during the world trade meet were clearly staged by provocateurs, not the compliant initial protesters.
Which gets us back to the assertion that the two parties are like one party anyway. They are not so much fighting over issues as they are fighting over control of the march toward what George Soros calls "communitarianism." Having made his billions he thinks the rest of us should live under socialist control.
Mexico would appear to be the model. A high per capital ratio of millionaires and an even higher ratio of powerless peasants that can be easily controlled - so long as the American one party system allows the potential extremists in Mexico to be deported to the U. S. to be kept busy and subsidized by the U. S. failing middle class.
Ambrose Evan-Pritchard should be educated enough to know that the overthrow of the Russian czar was implemented from within by the palace guard and elements of the military, the funding and direction of this overthrow came from outside the government, including England and the Fabian socialists.
If a militia ever does really rise up in the U. S., it would not be proactive but simply an attempt to defend the U. S. homeland from a foreign directed takeover. To defend the U. S. from a government that implements control directed from outside this country.
This is such a simple obervation of the true forces that could come into play.
The best solution would be for the federal government to start acting like it represents all the people and is here to serve all the people. Not just repreent the money class, elements of which, are known to have financed the Russian overthrow.
To know history is to understand.

The Single Most Important Thing to Understand About the Fed

You totally forget the Federal Reserve is a privately owned bank, owned by banks.
The last time I looked at a "dollar" it was a Federal Reserve note, backed by the privately owned Federal Reserve.
There is much talk of a dollar collapse. If that occurs, it will be a collapse of the Federal Reserve notes (dollars) and privately owned Federal Reserve money system.
Any attempt to make U. S. citizens liable for the losses at a privately owned bank would be outright cirminal fraud. The banking system currently has an insurance program in place which is funded by the industry itself.
If an audit determines the Federal Reserve is bankrupt and thus cannot continue to operate as a privately owned bank it will have to be liquidated.
China, Japan and entitites and individuals holding worthless Fedeal Reserve dollars and obligations could theoretically go to the World Court and seek prosecution of Fed officers and shareholders, the banks, for mismanagement and possibly fraud if that is detected.
I can now see that the audit is absolutely necessary If the Fed is insolvent, it can be eliminated like any other privately owned bankrupt enterprise.
The federal government could then issue new dollars, this time backed by the U S. government and overseen with transparency by the U S. Congress, which would be held accountable.
I see no reason why the audit of a privately owned bank operating within the U. S. should be exempt from routine audits and oversight when all other privately owned banks are subjected to audits.
Appointments of the "governors" at the Federal Reserve banks is just deceptive eyewash for clearly the Fed has operated as an independent bank since 1913.
In my lifetime every top Fed chairman has come from only one inbred group, one of the problems for this management chain has no feel for the broader community it is supposed to serve.
The collapse of the Federal Reserve would not be the collapse of the United States, but the collapse of a private bank that should not have been created in the first place.
Any martial law will only have to be imposed on the banking system. When Hank Paulson threatend to take down the country last autumn the U. S. should have immediately imposed martial law on the rebellious banking system whch has been waging class war with its 29 percent interest rates and other predatory practices.

2009 Is Looking an Awful Lot Like 2008

I raised cash yesterday, put some back in today and now Graham Summers has given me a higher wall of worry to look up at from the base.

You cite the SEC cracking down on short selling. Wasn't the ban just on their beloved financial stocks? The elites clearly favor Wall Street over Main Street in blatant class warfare. I am sure their ban was not applied to all stocks.

Of course the SEC also conveniniently dropped the uptick rule in an amazing timing move which accomodated GS in its short selling frenzy that exacerbated the downs I am sure.

Yen, Gold and the Perfect Desert Storm

Yes, the U. S. dollar is actually nothing more than notes issued by the privately owned Federal Reserve bank. Responsibility of the U. S. dollar was taken away from the federal government in 1913.
Gold measured in terms of privately issued Federal Reserve notes and currency has gone from $35 an ounce to more than $1,100 an ounce because the Federal Reserve has allowed the value of the 1913 dollar to decline 95 percent.
The rush to gold says that the Federal Reserve must be abolished for its failures and responsibility for the dollar must be returned to Congress, which is to be held accountable.
The only entity holding the Federal Reserve accountable is the gold market. The gold market judges the Fed to be a failure.

Charlie Gasparino: Another Crash 'Has to Happen Again'

Insightufl post. Except that ulitmately Citi did not benefit from the abolition of Glassman - Steagall. Look at its stock price.

I agree the financial industry is destroyed. But like poker players they are trying to outbluff the world and win the pot with a pair of deuces, backed up by trillions issued by the privately owned Fed and backed up by I guess the public....but that is not clear when it comes to fiat money.

Major Banks Now Much Too Big to Fail

The too big to fail banks have become even bigger?
In part, that's because the federal government was brainwashed intgo thinking it could not simply print money. Instead it had to borrow money from banks - and pay them interest which would take away money from future spending needs and trigger the need for higher taxes.
Last autumn the population screamed to let the banks fail - but you saw how Congress caved into the bankiers when they threatened to take down the nation if they were not saved because they did not give a damn.
So what if the banks are now bigger. They have bankrupted a government that should have kept them smaller and unable to destroy the nation.
If you think these big banks are such a great asset - then you must think Benranke's panic is unfounded and the Federal Reserve which propped up these massive empty shells can pass an audit.
And I agree with George Archers that the concentration of media ownership has been very damaging too. These media moguls are co-conspirators and successfully keeping the masses from truly understanding what has happened.

Random Walk Down What Is Definitely Not Wall Street

Nice description of the incredible problem. But you failed to suggest the solution.
First, flood Bulgaria and Europe with cheap foreign labor from Mexico and India.
And then hire hit squads to eliminate anyone who opposes "free" trade as opposed to trade you pay for. And we have paid heavily long term in the U. S. for short term free trade. Go look for the paid provocateurs who disrupted the world trade meeting in Seattle for staffing the enforcement squads..
Then turn to Karl Marx and nationalize the banks, especially the ones that are still solvent and thus a threat to the bankrupt money center banks.
Finally, raise the white flag and surrender to the international communist Trotskyites and bow before the world control center that will with armed force oversee their dream nightmare world.
All those empty buildings can be used for garrisons for the troops.
A standing army on evey corner, the modern way to do a WPA project because the world has now already been built. In fact, I remember the Ro bert Reagan crowd explaining the smaller economic collapse back then was because the nation has been built and many people were surplus. But Reagan was ignored and developers borrowed heavily after that to overbuild the nation, using the huge influx of immigrants as a catalyst.
I had not realized how far down the same road Europe has gone.
Europe turned to the same strategy, importing hordes of immigrants after telling their own women to have only two children because resources were in short supply and had to be conserved..
Thanks for telling us how global the grimness is..
And proving that excessive growth does not pay for itself.

Why the Dow Is Headed to 6000

I agree with surfer doc that despite the overwhelming financial fraud the stock market over corrected, taking down industries and companies that were relevantly more solvent.
The untimely suspension of the uptick rule had to be a factor in leveraging the decline and again points to insiders knowing in advance what was going to happen.
Abolishing the uptick rule was preceded by what the SEC said was the most exhaustive study in history. That same sort of exhaustion was shown in their handling of the Madoff complaints.

The Fed Backed Itself into a Corner

I blame the Federal Reserve and Allan Greenspan and all the other inbred chief central bankers for this mess.
Their exploded laboratory should be abolished. Period.

Are the Policymakers Waking Up?

None of these comments convince me that usury fracional banking is even sustainable and repairable in the first place.

The usury system requires an ever inflating supply of debt credits so that borrowers have a chance to keep up with their obligations for paying both money and interest. The extra fiat credits needed to pay interest have to come from somewhere.

But didn't Greenspin (sic) and Benranke (sic) set out to destroy inflation just a few short years ago with rate hikes from an artificially low base?. And didn't the rising pain level result in a rate pullback to 1 percent again? But did this ward off the financial collapse? And aren't some factions sceaming now for a rate hike to kill inflation? But isn't inflation needed so borrowers can keep up with rising interest obligations?

But isn't the economic system trying to deflate? Isn't deflation bad for usury banking?

The usury banking system and its attendant dependence on runaway inflation is unsustainable.

It simply allows nonproductive people to feed off of producers.

A non usury money system will be more boring, more stable, less greedy but ultimately more productive because the financial engineering parasites will have to go to work and produce something that adds value, not subtracts from it.