This Ain't Your Father's America

Posted by Wealth Wire - Tuesday, April 19th, 2011

The recent bickering between the two parties in Washington over the national budget all but proves one thing: honor has completely disappeared from the nation’s capital.

Listening to these sell out jackals – who are fighting over pennies when they need to cut more than $1 trillion from the annual budget – proves to me they couldn't care less about the deficit, their out of control spending, or the American people in general.

apr 2011 capitalThe big loud debate that's going on right now is just political maneuvering.

The next presidential election is only 19 months away. And they have to put on the regular dog and pony show for you.

They want to convince you they're actually doing something to help.

But the truth is, no single politician or administration can fix America's budget problem.

Moreover, the real problem lies in the fact that no single politician or administration wants to fix America's budget problem.

Let's face it, both parties represent the same thing: protection of the banking and corporate syndicates.

And these entities make billions with the puppets they're paying to push the paper in Washington.

America is owned by the banks. But that boat isn't going to float for long...

This Ain't Your Father's America

It's no longer about doing the right thing anymore. It hasn’t been for quite some time.

For the politicians, it's all about acquiring and controlling money and power. For the American citizens...

apr 2011 flag questionWell, I'm not even sure if they know what they want for themselves nowadays.

It's possible a large portion of the country simply doesn’t care anymore as long as they get their handouts.

Either way, we are all going to pay a terrible price for our fence-sitting.

Over the past few decades we've allowed Washington to run the country into the ground by running up the national debt.

And now it's gotten so out of control the government can't hide America's true debt problem.

Just yesterday, Standard & Poor’s downgraded its outlook on the U.S. credit rating to "negative", raising the likelihood the U.S. will lose its coveted AAA rating.

Large financial houses know the problem, too...

Bill Gross, founder of Pimco, the $1.2 trillion investment management firm that used to buy bonds, has stated very publicly that he considers U.S. Treasury securities to be high risk, low reward investments. Gross recently remarked:

If I were sitting before Congress, and giving testimony on our current debt crisis, I would pithily say something like this: "I sit before you as a representative of a $1.2 trillion money manager, historically bond oriented, that has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden. Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies - inflation, currency devaluation and low to negative real interest rates."

Gross is not merely selling Treasuries, he is selling them short!

His flagship, $235 billion Pimco Total Return Fund (PTTAX), now holds a net short position in government-related debt securities, while also sitting atop an enormous $73 billion pile of cash.

This is coming from one of the most respected players in the financial world.

So far this year, the U.S. Treasury has raised $293 billion in net cash by selling Treasury securities. And so far this year, the Federal Reserve has purchased a net $330 billion of Treasury notes and bonds.

This translates to the Fed providing 100% of the net new cash the Treasury has raised this year, along with another $37 billion needed to mop up even more mess.

But who will buy Treasuries when the Fed doesn't?

No one. That's who.

And consider this, which most have not even contemplated yet...

With all that is happening in Japan right now, it won't be much longer before the Japanese government will have to start selling their main asset: US Treasuries.

We are getting very close and even accelerating toward the end game for the U.S. Dollar and the U.S. empire. 

apr 2011 golden parachute

All I can say is, “Have your life boats ready!”

You can rest assured the politicos in Washington do:

For now, they'll continue to act in the way all politicians do when they are trapped in such a manner; They'll lie, cheat, steal, spin the facts, cover their asses at all costs, abuse their power, and misinform on a massive scale.

But even with the help of the government controlled media, the time of consequences can no longer be held at bay.

Free market forces will win, governments and their political power structures are going to come tumbling down, just as we have been seeing elsewhere around the world these past six months.

The spoils will go to those who were prepared and understood the debacle years before it hit.

For the past several years, we at Wealth Daily have been educating and preparing investors for this exact scenario. We have consistently helped our members protect and increase their wealth by recommending the best ways to own precious metals, energy, real estate, and other real, hard assets.

Stay tuned to Wealth Wire for more of the same, in these chaotic financial times.

Good Investing,

Greg McCoach
Analyst, Wealth Daily
Investment Director, Mining Speculator and Insider Alert

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