One Quadrillion Dollars
"Gold is for optimists. I'm diversifying into canned goods."
-- Commenter On British Financial Blog
Ten Of These
Paul B. Farrell has been a financial analyst and commentator for many years. Semi-retired in Arroyo Grande, California, near San Luis Obispo, Farrell writes a weekly syndicated column carried (among other venues) by Little Rupert's Wall Stret Journal MarketWatch section.
Farrell's message is center-right politically when any politics are called for; even so, a relatively sane voice in the American financial commentary. He was warning of the unsustainability of the Housing Market Bubble, and of the explosion in Derivatives trading, before Nouriel Roubini or even Joseph Stiglitz.
In his most recent column, Farrell warned that the world's financial situation (and America's in particular) is burdened with enough debt to make another Great Depression more than just possible. From some of the commentary, you'll see he makes his politics clear (e.g., Medicare, Social Security) -- again, even so; he outlined fourteen points of debt and their sources or causes, which I list here in full...
... So here are my best estimates, mostly from reported resources, of the huge debts Wall Street is dumping on America, the big bubble they're already blowing, driving the global economy headlong into another meltdown that will trigger the Great Depression II. And likely, with all this debt, soon you can bet taxpayers will stage a revolution making Main Street American streets far worse than Athens:
1. Federal government debt ... $14.3 trillion
Federal debt limit doubled since 2005 to $14.3 trillion limit. Bush/Cheney wars pushed U.S. deep into a debt hole. Military kills 54% of budget. Expect 4% deficits through 2020.
2. Treasury / Fed cheap-money policies ... $23.7 trillion
The Fed's shadowy printing presses have created an estimated but unaudited $23.7 trillion in credits, grants, loans and guarantees, backed by taxpayers. Pure profit.
3. Social Security's rising debt ... $40 trillion
Soon we must either cut benefits or raise taxes 40%. Delays worsen solutions. By 2035 Social Security and Medicare will eat up the entire federal budget, other than defense.
4. Medicare's unfunded debt ... $60 trillion
Going broke faster than Social Security. Prescription-drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.
5. Annual health-care costs ... $2.5 trillion
Costs rising faster than inflation. Burden increasingly shifted to employees. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.
6. Secretive global derivatives trading ... $604 trillion
Wall Street resists all regulation of their gambling casino that leverages the combined $50 trillion GDP of all nations by a 12:1 ratio. Warning: Less than 2% of Wall Street's derivative bets triggered the last meltdown. Buffett "guarantees" it will happen again.
7. Population growth 50% vs. Peak Oil demand ... $30 trillion
United Nations says global population is increasing from 6 billion to 9 billion by 2050. China and India need 500 new cities each. Billions more humans want autos, using up limited resources, shifting more costs to America, as commodity price increases and new resource wars.
8. U.S. dollar losing as reserve currency ... $20 trillion
As China's economy rockets past America's, the dollar will be replaced as the chief foreign reserves. The shift will devalue the relative worth of all America's assets.
9. Global real estate losses ... $15 trillion
Commercial real estate is bloating 25% of U.S. bank balance sheets. Dubai Tower, world's tallest, is empty. China collapse will upstage, further depress America's market.
10. Foreign trade and ownership ... $5 trillion
Foreigners own more than $2.5 trillion of America. China holds over $1 trillion Treasury debt. $40 billion new deficits added monthly. Total climbing at $400 billion annually.
11. State / local budget / pension shortfalls ... $3.5 trillion
Shortfalls of $110 billion in 2010, $178 billion in 2011. On top of more than $450 billion in annual shortfalls in local government employee pension funds. L.A.'s near bankruptcy.
12. Corporate pensions plus 401(k) plans ... $3.2 trillion
Only 30% of Americans have enough to retire. There's $2.7 trillion in 401(k) plans. And 92% of corporate pension plans are underfunded, with defaults guaranteed by taxpayers.
13. Consumer card debt ... $2.5 trillion
Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 trillion to $2.5 trillion. Fat Cat Bankers love it, yes, love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.
14. Lobbyists' annual costs ... $1.4 trillion
Wall Street bankers, Corporate CEOs and Forbes 400 Richest spend billions to influence elected officials, regulators and bureaucrats with lobbyists and campaign donations to exercise power over government. Voters are easily manipulated, but it takes lots of cash.
The total of all 14 categories of debt is a mind-blowing $825 trillion that includes "apples and oranges," jet fighters, derivatives and insurance fees, credit cards, autos and mortgages. There are more, and of course these are just estimates. Given the lack of transparency on Wall Street and in Washington, our debt is likely over $1,000 trillion.
That's One Quadrillion Dollars.
Farrell's column makes clear that Wall Street is 'betting short' -- placing trades that will make money when aspects of the system lose; this is Goldman-Sachs' methodology. And in order for these Masters Of The Universe to cash in... the system has to fail.
I wish I had a wisecrack to make at this point, but I don't.
"Gold is for optimists. I'm diversifying into canned goods."
-- Commenter On British Financial Blog
Ten Of These
Paul B. Farrell has been a financial analyst and commentator for many years. Semi-retired in Arroyo Grande, California, near San Luis Obispo, Farrell writes a weekly syndicated column carried (among other venues) by Little Rupert's Wall Stret Journal MarketWatch section.
Farrell's message is center-right politically when any politics are called for; even so, a relatively sane voice in the American financial commentary. He was warning of the unsustainability of the Housing Market Bubble, and of the explosion in Derivatives trading, before Nouriel Roubini or even Joseph Stiglitz.
In his most recent column, Farrell warned that the world's financial situation (and America's in particular) is burdened with enough debt to make another Great Depression more than just possible. From some of the commentary, you'll see he makes his politics clear (e.g., Medicare, Social Security) -- again, even so; he outlined fourteen points of debt and their sources or causes, which I list here in full...
... So here are my best estimates, mostly from reported resources, of the huge debts Wall Street is dumping on America, the big bubble they're already blowing, driving the global economy headlong into another meltdown that will trigger the Great Depression II. And likely, with all this debt, soon you can bet taxpayers will stage a revolution making Main Street American streets far worse than Athens:
1. Federal government debt ... $14.3 trillion
Federal debt limit doubled since 2005 to $14.3 trillion limit. Bush/Cheney wars pushed U.S. deep into a debt hole. Military kills 54% of budget. Expect 4% deficits through 2020.
2. Treasury / Fed cheap-money policies ... $23.7 trillion
The Fed's shadowy printing presses have created an estimated but unaudited $23.7 trillion in credits, grants, loans and guarantees, backed by taxpayers. Pure profit.
3. Social Security's rising debt ... $40 trillion
Soon we must either cut benefits or raise taxes 40%. Delays worsen solutions. By 2035 Social Security and Medicare will eat up the entire federal budget, other than defense.
4. Medicare's unfunded debt ... $60 trillion
Going broke faster than Social Security. Prescription-drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.
5. Annual health-care costs ... $2.5 trillion
Costs rising faster than inflation. Burden increasingly shifted to employees. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.
6. Secretive global derivatives trading ... $604 trillion
Wall Street resists all regulation of their gambling casino that leverages the combined $50 trillion GDP of all nations by a 12:1 ratio. Warning: Less than 2% of Wall Street's derivative bets triggered the last meltdown. Buffett "guarantees" it will happen again.
7. Population growth 50% vs. Peak Oil demand ... $30 trillion
United Nations says global population is increasing from 6 billion to 9 billion by 2050. China and India need 500 new cities each. Billions more humans want autos, using up limited resources, shifting more costs to America, as commodity price increases and new resource wars.
8. U.S. dollar losing as reserve currency ... $20 trillion
As China's economy rockets past America's, the dollar will be replaced as the chief foreign reserves. The shift will devalue the relative worth of all America's assets.
9. Global real estate losses ... $15 trillion
Commercial real estate is bloating 25% of U.S. bank balance sheets. Dubai Tower, world's tallest, is empty. China collapse will upstage, further depress America's market.
10. Foreign trade and ownership ... $5 trillion
Foreigners own more than $2.5 trillion of America. China holds over $1 trillion Treasury debt. $40 billion new deficits added monthly. Total climbing at $400 billion annually.
11. State / local budget / pension shortfalls ... $3.5 trillion
Shortfalls of $110 billion in 2010, $178 billion in 2011. On top of more than $450 billion in annual shortfalls in local government employee pension funds. L.A.'s near bankruptcy.
12. Corporate pensions plus 401(k) plans ... $3.2 trillion
Only 30% of Americans have enough to retire. There's $2.7 trillion in 401(k) plans. And 92% of corporate pension plans are underfunded, with defaults guaranteed by taxpayers.
13. Consumer card debt ... $2.5 trillion
Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 trillion to $2.5 trillion. Fat Cat Bankers love it, yes, love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.
14. Lobbyists' annual costs ... $1.4 trillion
Wall Street bankers, Corporate CEOs and Forbes 400 Richest spend billions to influence elected officials, regulators and bureaucrats with lobbyists and campaign donations to exercise power over government. Voters are easily manipulated, but it takes lots of cash.
The total of all 14 categories of debt is a mind-blowing $825 trillion that includes "apples and oranges," jet fighters, derivatives and insurance fees, credit cards, autos and mortgages. There are more, and of course these are just estimates. Given the lack of transparency on Wall Street and in Washington, our debt is likely over $1,000 trillion.
That's One Quadrillion Dollars.
Farrell's column makes clear that Wall Street is 'betting short' -- placing trades that will make money when aspects of the system lose; this is Goldman-Sachs' methodology. And in order for these Masters Of The Universe to cash in... the system has to fail.
I wish I had a wisecrack to make at this point, but I don't.
