US Bankruptcy looms.

The Presidency of Barak Hussein Obama is beginning to resemble the kingship of King David's son Absalom. Absalom overthrew his Father and David fled with 600 of his warriors. But before he fled, he asked a trusted advisor to stay behind and give Absolom bad advice. Hushai did just that and his counsel to Absalom to delay the pursuit of David, allowed David to survive and fight another day.

Had Obama acted as a regular Democrat (like Bill Clinton), his re-election would have been assured. Instead, Obama is getting bad advice from Gaithner and FED Chairman Bernanke. The result of this bad advice will be the bankruptcy of the United States, on top of the economic hardship our people endure.

America's banks and housing were declared bankrupt by changing the accounting system. The Obama regime "replaced" the capital in these banks to the tune of $13T. That much of our national wealth was destroyed by the traitors who run our government. But, that is just the beginning. The Obama regime doubled federal spending and tripled the deficit.

The US National Debt now totals $12T. Of that, $2T needs to be rolled over within 12 months. What does this mean exactly? It means that the government needs $2T new money to pay off that debt, or sell that much new Treasury Bills in effect to "roll over" the $2T debt. Can the govt do it? The simple answer in "NO." Why not?

The Greenspan-Giudotti rule (published in 1999) states that in order for a government to avoid default, it must have 100% coverage in hard currency. So, how much hard assets does the US own? At the current rate (foreign govts buy 44% of our debt), 44% of the $2T that needs to be rolled over and it amounts to $880B. And how much hard currency assets does the US have? Let's see. The total amount of gold we have amounts to $300B (note billion, not trillion). We also have $58B in the Strategic Oil Reserve and $136B in foreign currency. That is only $490B, so the US govt will be in default.

When this happens, the currency of the Debtor and its bonds become worthless. Traders will short the Dollar and Treasury Bills. They are already doing it and we see the value of the dollar dropping. The US govt has the following choices: 1. increase the rate that Treasuries yield - this will drive up interest rates and crash the Stock Market and the economy; 2. do nothing - this will put us into default (bankrupt in other words); or 3. "monetize" the debt, i.e. print $3.5T in currency - this will set off hyperinflation.

Economists will be quick to point out that the FED has already "monetized" $12T without setting off hyperinflation. And that is correct. But, the coming "monetisation" will be different than the one done by the Obama regime when it first came to power. The first "monetisation" involved declaring bank assets valued zero (by using the 'mark to market' accounting) and replacing these assets by printed currency. In fact, ownership of $12T in bank assets was transferred to the government, so in fact there was no net increase in currency, just a transfer of ownership - a back door nationalization. The second "monetisation," however will be printing currency with nothing backing it. That will set off hyperinflation.

Americans have no clue how the economy works, how finances work, so the Media can spin things until the disaster can no longer be avoided. It will usher in interesting times. There is a Chinese saying: may you live in interesting times. It is a polite curse.