Wed Post #1: Ron Paul On The "Illusion" Economy: "We are bankrupt and have been encouraged to take on more debt"

"So sometimes you have housing bubbles and sometimes you have housing busts, then you have housing bubbles and bond bubbles that's all [the] result of the manipulation of interest rates, which is my real objection to it." 

"So one half of our economy is socialized, because it's the control of the money supply, the control of the interest rates," "We don't believe they're capable of doing it and I think history shows that the record is pretty bad." 

"The economy on the surface looks good, but if you look at hardcore unemployment and standard of living of the middle class, there's still a lot of problems out there... So if we look only at the stock market, then we're in denial."

(Hat tip: Zero Hedge)

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Ron Paul launches online petition for clemency for Edward Snowden

Edward Snowden shocked the world when he exposed the NSA’s illegal and abusive spying program. Instead of applauding him for his bravery and patriotism, the U.S. government labels Snowden a traitor.

Former Congressman Ron Paul has launched a petition to attempt to garner clemency for NSA whistleblower Edward Snowden.

Paul calls on supporters to sign the petition in an attempt to bring Snowden home to the US safely before his temporary visa in Russia expires in July. Join Ron Paul in demanding that Edward Snowden IS granted clemency.

By signing this petition, Paul notes on his Channel's website, "you are telling the US government that Mr. Snowden deserves the right to come home without the fear of persecution or imprisonment."

You can sign the petition here.

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Fri Post #1: Meet the chief obstacle in the Senate to Ron Paul's effort to audit the Federal Reserve. What did he say in 1995?

Yesterday the above clip was posted regarding Ron Paul's success at seeing an 'Audit the US Federal Reserve' bill passed in the US House of Representatives.

It is a landmark achievement but only the first step in the process to see the action become reality.

The next hurdle is the US Senate. Leading the opposition to prevent the Bill from even being introduced in the chamber is Senator Harry Reid. Ron Paul describes this opposition in the above clip.

Paul is confident that if the Bill can be introduced in the Senate, public pressure will see it passed.

And that pressure is starting to ramp up with the circulation of the clip below. It shows Harry Reid from 1995 making a speech in the Senate calling for - of all things - an audit of the Federal Reserve!!!

Oh the hypocrisy!

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Thurs Post #1: Audit the Federal Reserve Bill passes in US House of Representatives

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The Age of Ron Paul: The Thomas Jefferson of our day

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Tues Post #3: Ron Paul Dominates Fox's Twitter Survey Of The South Carolina/FOX News Debate

It is almost comical to watch the mainstream media's coverage of the stunning movement afoot towards Texas Congressman Ron Paul's campaign for the Republican Presidential nomination.

When FOX News conducted a Twitter survey of the South Carolina debate (and Ron Paul dominates), watch how they try to dismiss the Survey results as a poor reflection of what people think.

When the show's co-host calls him on this - pointing out that Ron Paul is not just 'doing better' than the competition... but out and out 'did the best' - it's almost painful watching the FOX host begrudgingly have to admit this is true.

Below are Ron Paul hilights from the debate.

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Mon Post #2: Ron Paul - the emerging Republican nominee?

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The bailouts continue... you're just not hearing about them

A while back, US Republican candidate Ron Paul commented on the ongoing bailouts of Europe by the US Federal Reserve:

The Fed's latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed.  Under current law Congress cannot examine these types of agreements.  Those who would argue that auditing the Fed or these agreements with central banks harms the Fed's independence should reevaluate the Fed's supposed independence when the Fed bails out Europe so soon after President Obama promised US assistance in resolving the Euro crisis.

And today the Wall Street Journal reported that former Dallas Fed Vice President, Gerald Driscoll has come right out and accused the Fed of bailing out Europe courtesy of "incomprehensible" currency swaps, and implicitly accusing Bernanke of lying that he would not bail out Europe even as he has done precisely that.

The Federal Reserve's Covert Bailout of Europe 

When is a loan between central banks not a loan? When it is a dollars-for-euros currency swap.

America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing.

Why are the Fed and the ECB doing this? The Fed could, after all, lend directly to U.S. branches of foreign banks. It did a great deal of lending to foreign banks under various special credit facilities in the aftermath of Lehman's collapse in the fall of 2008. Or, the ECB could lend euros to banks and they could purchase dollars in foreign-exchange markets. The world is, after all, awash in dollars.

The two central banks are engaging in this roundabout procedure because each needs a fig leaf. The Fed was embarrassed by the revelations of its prior largess with foreign banks. It does not want the debt of foreign banks on its books. A currency swap with the ECB is not technically a loan.

The ECB is entangled in an even bigger legal and political mess. What the heads of many European governments want is for the ECB to bail them out. The central bank and some European governments say that it cannot constitutionally do that. The ECB would also prefer not to create boatloads of new euros, since it wants to keep its reputation as an inflation-fighter intact. To mitigate its euro lending, it borrows dollars to lend them to its banks. That keeps the supply of new euros down. This lending replaces dollar funding from U.S. banks and money-market institutions that are curtailing their lending to European banks—which need the dollars to finance trade, among other activities. Meanwhile, European governments pressure the banks to purchase still more sovereign debt.

This Byzantine financial arrangement could hardly be better designed to confuse observers, and it has largely succeeded on this side of the Atlantic, where press coverage has been light. Reporting in Europe is on the mark. On Dec. 21 the Frankfurter Allgemeine Zeitung noted on its website that European banks took three-month credits worth $33 billion, which was financed by a swap between the ECB and the Fed. When it first came out in 2009 that the Greek government was much more heavily indebted than previously known, currency swaps reportedly arranged by Goldman Sachs were one subterfuge employed to hide its debts.

The Fed had more than $600 billion of currency swaps on its books in the fall of 2008. Those draws were largely paid down by January 2010. As recently as a few weeks ago, the amount under the swap renewal agreement announced last summer was $2.4 billion. For the week ending Dec. 14, however, the amount jumped to $54 billion. For the week ending Dec. 21, the total went up by a little more than $8 billion. The aforementioned $33 billion three-month loan was not picked up because it was only booked by the ECB on Dec. 22, falling outside the Fed's reporting week. Notably, the Bank of Japan drew almost $5 billion in the most recent week. Could a bailout of Japanese banks be afoot? (All data come from the Federal Reserve Board H.4.1. release, the New York Fed's Swap Operations report, and the ECB website.)

More and more balls are being thrown in the air.

The question remains... how long can the ponzi juggling act be maintained?

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Ron Paul predicting the economic mess created by the bursting of the housing bubble back in 2001

More on the situation in precious metals when I can.

In the meantime, I invite you to check out this speech by Ron Paul, current candidate for the US Republican Presidential nomination, which he gave on September 6, 2001. 

Paul foresees many of today's problems (including the bursting of the housing bubble and the debt problems triggered by derivatives) as early as 2001.

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Ron Paul, unlike the average US Presidential politician, lays out exactly what he will do

Ron Paul's latest ad in his quest for the Republican Presidential nomination in 2012.

Is there any doubt why this man makes the establishment uncomfortable?

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Mon Post #2: Ron Paul explains how America shifted away from 'debt' money after the Civil War and can do it again

Ron Paul continues to lay out his platform calling for the end of the Federal Reserve and returning America to sound monetary policy.

"We know what to do - we did it once after the Civil War period, we went from a paper standard back to the gold standard, and the event wasn't that dramatic. But today the big problem is that both the conservatives and liberals have an big apetite for big government for different reasons, therefore they need the Fed to tie them over and monetize the debt. So if you don't get rid of that appetite it's going to be more difficult, but the transition isn't that difficult. You have to get your house in order; you have to balance the budget, you have to not run up debt, and you have to promise not to print any more money..."

"I am quite convinced that the system we have will not be maintained - that's what these last 4 years was all about, and that's what the turmoil in Europe is all about. The question is are they going to move toward a constitutional form of money. or are we going to go another step further into international money - instead of having an international gold standard based on the market, are we going to go toward a UN, IMF standard where they are going to control with the use of force another fiat standard. I consider that a very, very dangerous move."

Paul's comments come a day after more secret Fed bailouts were publicized.

Bloomberg reported yesterday that Secret Fed Loans Gave Banks $13 Billion.

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

Is there anyone who still really believes we shouldn’t be taking a closer look at the Federal Reserve’s activities?

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Ron Paul on the US Federal Reserve: "It is immoral"

Congressman Ron Paul (and candidate for the US Republican 2011 presidential nomination) delivered a speech for the National Association of Home Builders at the 29th Annual Cato Monetary Conference yesterday.

The key topics were the US monetary policy and the US Federal Reserve.

"I think there is no doubt that the Federal Reserve is immoral, it's unconstitutional, it's a disaster and we don't need it... The Federal Reserve is an institution that was created by the Congress and the Congress has been totally derelict in their duties as far as oversight of the Federal Reserve."

In the middle of an election campaign, here you have a man who is speaking consistently with everything he has said about monetary policy for the last 30 years. He refuses to pander to the electorate and change his opinions to garner votes. Ron Paul tells you exactly how it is in this excellent speech.

This is the man who 'should' be the next president of the United States.

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Ron Paul's message to Occupy Wall Street: End the Fed

The 8:00 mark to 9:00 contains the meat of the message and the 'End the Fed' pledge.

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US Republican Presidential Candidate says " Blame the Fed"

US Republican Presidential Candidate, Ron Paul, has written an Op Ed piece for the Wall Street Journal reinforcing the theme we have carried for the past week - that the root of our problems lie with Central Banks and the US Federal Reserve.

Here is what he had to say:

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Blame the Fed for the Financial Crisis

The Fed fails to grasp that an interest rate is a price, the price of time. Attempting to manipulate that price is as destructive as any other government price control.

By Ron Paul

To know what is wrong with the Federal Reserve, one must first understand the nature of money. Money is like any other good in our economy that emerges from the market to satisfy the needs and wants of consumers. Its particular usefulness is that it helps facilitate indirect exchange, making it easier for us to buy and sell goods because there is a common way of measuring their value. Money is not a government phenomenon, and it need not and should not be managed by government. When central banks like the Fed manage money they are engaging in price fixing, which leads not to prosperity but to disaster.

The Federal Reserve has caused every single boom and bust that has occurred in this country since the bank's creation in 1913. It pumps new money into the financial system to lower interest rates and spur the economy. Adding new money increases the supply of money, making the price of money over time—the interest rate—lower than the market would make it. These lower interest rates affect the allocation of resources, causing capital to be malinvested throughout the economy. So certain projects and ventures that appear profitable when funded at artificially low interest rates are not in fact the best use of those resources.

Eventually, the economic boom created by the Fed's actions is found to be unsustainable, and the bust ensues as this malinvested capital manifests itself in a surplus of capital goods, inventory overhangs, etc. Until these misdirected resources are put to a more productive use—the uses the free market actually desires—the economy stagnates.

The great contribution of the Austrian school of economics to economic theory was in its description of this business cycle: the process of booms and busts, and their origins in monetary intervention by the government in cooperation with the banking system. Yet policy makers at the Federal Reserve still fail to understand the causes of our most recent financial crisis. So they find themselves unable to come up with an adequate solution.

In many respects the governors of the Federal Reserve System and the members of the Federal Open Market Committee are like all other high-ranking powerful officials. Because they make decisions that profoundly affect the workings of the economy and because they have hundreds of bright economists working for them doing research and collecting data, they buy into the pretense of knowledge—the illusion that because they have all these resources at their fingertips they therefore have the ability to guide the economy as they see fit.

Nothing could be further from the truth. No attitude could be more destructive. What the Austrian economists Ludwig von Mises and Friedrich von Hayek victoriously asserted in the socialist calculation debate of the 1920s and 1930s—the notion that the marketplace, where people freely decide what they need and want to pay for, is the only effective way to allocate resources—may be obvious to many ordinary Americans. But it has not influenced government leaders today, who do not seem to see the importance of prices to the functioning of a market economy.

The manner of thinking of the Federal Reserve now is no different than that of the former Soviet Union, which employed hundreds of thousands of people to perform research and provide calculations in an attempt to mimic the price system of the West's (relatively) free markets. Despite the obvious lesson to be drawn from the Soviet collapse, the U.S. still has not fully absorbed it.

The Fed fails to grasp that an interest rate is a price—the price of time—and that attempting to manipulate that price is as destructive as any other government price control. It fails to see that the price of housing was artificially inflated through the Fed's monetary pumping during the early 2000s, and that the only way to restore soundness to the housing sector is to allow prices to return to sustainable market levels. Instead, the Fed's actions have had one aim—to keep prices elevated at bubble levels—thus ensuring that bad debt remains on the books and failing firms remain in business, albatrosses around the market's neck.

The Fed's quantitative easing programs increased the national debt by trillions of dollars. The debt is now so large that if the central bank begins to move away from its zero interest-rate policy, the rise in interest rates will result in the U.S. government having to pay hundreds of billions of dollars in additional interest on the national debt each year. Thus there is significant political pressure being placed on the Fed to keep interest rates low. The Fed has painted itself so far into a corner now that even if it wanted to raise interest rates, as a practical matter it might not be able to do so. But it will do something, we know, because the pressure to "just do something" often outweighs all other considerations.

What exactly the Fed will do is anyone's guess, and it is no surprise that markets continue to founder as anticipation mounts. If the Fed would stop intervening and distorting the market, and would allow the functioning of a truly free market that deals with profit and loss, our economy could recover. The continued existence of an organization that can create trillions of dollars out of thin air to purchase financial assets and prop up a fundamentally insolvent banking system is a black mark on an economy that professes to be free.

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The Battle for the Message Begins

I suspect over the next few weeks we will see a theme appear in some of the media coverage of the Occupy Wall Street protests as they spread across North America.

And the theme will focus on the one like in this story, How silly are the End the Fed signs at Occupy Kansas City?

Adbusters, the Vancouver-based anti-consumerist magazine, called on people in July’s 97th issue to flood into Lower Manhattan on September 17 to “occupy Wall Street for a few months.”

Obstentially the movement is to protest against corporate greed. But 'End the Fed' is an important component of real solutions for 'Occupy Wall Street'.

And I would suggest that a titanic battle is now underway to try and extinquish the 'End the Fed' component.

Articles in support of the movement are starting to pop up as well, like this one: Ron Paul and Occupy Wall Street should jointly call for full public disclosure of all Fed bailout money.

US Republican Presidential candidate Ron Paul Supports the ‘Occupy Wall Street’ Movement and there are a great many who do not want the two messages linked.

Understanding the role of central banks is our current economic situation is crucial.

And driving a wedge between the protestors and this concept is going to be a major theme in the coming weeks.

As Ralph Nader said on CNN...“The Federal Reserve is now a government within a government. It is totally out of control. Congress doesn't control it. It's funded by the banks and we either have constitutional government or we don't."

The power elite DO NOT WANT the 'Occupy Wall Street' movement to get anywhere near embracing this message because it is within this message that real reform and real solutions lie.

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Default now or suffer a more expensive crisis later

In an oped piece posted in Bloomberg, Congressman Ron Paul once again outlines the common sense argument over US debt that is so poignant.

In strict terms, the US will default if America fails to meet its debt obligations, through failure to pay either interest or principal due a bondholder.

To avoid this, there is a giant push to raise the debt ceiling.  The other way of avoiding it is to make massive spending cuts.  America is bringing in roughly $1 Trillion in tax revenue and needs to borrow an additional $1.9 Trillion to cover all expenses.  To avoid raising the debt ceiling, America would have to institute massive spending cuts.

In his OpEd piece, Ron Paul notes that there are numerous claims that a default on Aug. 2 is unprecedented and will result in calamity (never mind that this is simply an arbitrary date, easily changed, marking a congressional recess). 

Paul notes that the U.S. government defaulted at least three times on its obligations during the 20th century;

• In 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40%
• From 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation, too.
• From 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. government.

Paul goes on to describe how these moves freed the US government to now spend unlimited amounts of money because they were no longer constrained by any sort of commodity backing; the only check on its spending being the market’s appetite for Treasury debt.

• "Despite the defaults in 1934, 1968 and 1971, world markets have been only too willing to purchase Treasury debt and thereby fund the government’s deficit spending. If these major defaults didn’t result in decreased investor appetite for U.S. obligations, I see no reason why defaulting on a small amount of debt this August would cause any major changes.  The national debt now stands at just over $14 trillion, while net total liabilities are estimated at over $200 trillion. The government is insolvent, as there is no way that this massive sum of liabilities can ever be paid off. Successive Congresses and administrations have shown absolutely no restraint when it comes to the budget process, and the idea that either of the two parties is serious about getting our fiscal house in order is laughable."

Paul quotes the Austrian School’s theory of the business cycle that describes how loose central bank monetary policy causes booms and busts:

Loose monetary policy drives down interest rates below the market rate, lowering the cost of borrowing; encourages malinvestment; and causes economic miscalculation as resources are diverted from the highest value use as reflected in true consumer preferences.

Loose monetary policy caused the dot-com bubble and the housing bubble, and now is causing the government debt bubble.

Paul zero's in on how, for far too long, the Federal Reserve’s monetary policy and quantitative easing have kept interest rates artificially low, enabling the government to drastically increase its spending by funding its profligacy through new debt whose service costs were lower than they otherwise would have been.

• "Neither Republicans nor Democrats sought to end this gravy train, with one party prioritizing war spending and the other prioritizing welfare spending, and with both supporting both types of spending. But now, with the end of the second round of quantitative easing, the federal funds rate at the zero bound, and the debt limit maxed out, Congress finds itself in a real quandary."

And it's that quandary which has America at it's most important crossroads since the Civil War.

• "Unless major changes are made today, the U.S. will default on its debt sooner or later, and it is certainly preferable that it be sooner rather than later. If the government defaults on its debt now, the consequences undoubtedly will be painful in the short term. The loss of its AAA rating will raise the cost of issuing new debt, but this is not altogether a bad thing. Higher borrowing costs will ensure that the government cannot continue the same old spending policies. Budgets will have to be brought into balance (as the cost of servicing debt will be so expensive as to preclude future debt financing of government operations), so hopefully, in the long term, the government will return to sound financial footing."

By raising the debt ceiling all America does is postpone the inevitable. Increasing the debt ceiling allows the US to keep spending.  Since there is no way the money can be paid back, it means default is simply kicked down the road.

More spending will mean more money printing. A future default won’t take the form of a missed payment, but rather will come through hyperinflation.

• "The already incestuous relationship between the Federal Reserve and the Treasury will grow even closer as the Fed begins to purchase debt directly from the Treasury and monetizes debt on a scale that makes QE2 look like a drop in the bucket. Imagine the societal breakdown of Weimar Germany, but in a country five times as large. That is what we face if we do not come to terms with our debt problem immediately."

Paul notes that default will be painful, but it is all but inevitable for a country as heavily indebted as the U.S.

The past 40 years have clearly shown that pumping money into the system to combat a recession only ensures an unsustainable economic boom and a future recession worse than the first.

• "And continuously raising the debt ceiling only forestall the day of reckoning and ensure that, when it comes, it will be cataclysmic. We have a choice: default now and take our medicine, or put it off as long as possible, when the effects will be much worse."

Wise words.

But the path of action has already been chosen. And without titanic resolve, there won't be a deviation from that path.

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All that glitters...

Quick post to start off the day, the first of possibly several for Thursday.

The Sovereign Debt situation has sent Gold surging to new record nominal highs at $1,594.45 per ounce and Silver has leapt another 3% to over $39 per ounce after yesterday’s 6% rise.

Gold is now targeting $1600 per ounce and Silver has surged 9% in 24 hours as the US dollar plummets in value.

Yesterday's debate between US Federal Reserve Chairman, Ben Bernanke, and US Presidential candidate Ron Paul at the U.S. House Banking Committee session is the big news today.

Ron. Paul asked about the collapse in the value of the dollar by almost 50% in the past three years to less than a 1,580th of an ounce of gold. From their exchange:

Ron Paul: “When you wake up in the morning, do you care about the price of gold?”

Ben Bernanke: “Well, I pay attention to the price of gold. But I think it reflects a lot of things. It reflects global uncertainties. I think the reason people hold gold is as protection against of what we call tail risks, really, really bad outcomes. And to the extent that the last few years have made people more worried about the potential of a major crisis then they have gold as a protection.”

Ron Paul: "Do you think gold is money?"

Ben Bernanke:  "No. It's a precious metal."

Ron Paul: "Even if it's been money for 6,000 years? Somebody reversed that and eliminated that economic law?"

Ben Bernanke:  "Well, you know, it's an asset. Would you say treasury bills are money? I don't think they're money either, but they're a financial asset."
Ron Paul: "Why do central banks hold it if it's not money?"

Ben Bernanke:  "Well, it's a form of reserves."

Ron Paul: "Why don't they hold diamonds?"

Ben Bernanke:  "Well, it's tradition. Long-term tradition."

Ron Paul: "Some people still think it's money."

What's interesting here is that the Federal Reserve Chairman just admitted that gold is “protection” against “tail risks” and “really, really bad outcomes”. 

Gold is not a fringe asset and is becoming a core part of a properly diversified portfolio which is an important safe haven asset and indeed currency.

While Bernanke made a feeble denial of this, note that he placed Gold on the same level of US Treasury Bills as an "asset" instead of some form of 'barbarous relic'.

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These are the good old days

With all the news about Japan and Libya this past week, you are probably unaware that on Thursday, March 17, the US Domestic Monetary Policy and Technology Subcommittee held hearings to examine the relationship between monetary policy and rising prices.

Chaired by staunch US Federal Reserve critic Ron Paul, the subcommittee heard testimony from witnesses Joseph T. Salerno (Professor, Pace University), James Grant (Editor, Grant’s Interest Rate Observer) and Lewis E. Lehrman (Senior Partner, L.E. Lehrman & Co).

And although the hearings were boycotted by House Democrats, there was some important testimony by James Grant that's worth noting.

The bespectacled and bow tied editor of Grant’s Interest Rate Observer had a sobering message for Washington lawmakers:

“These are the good old days with respect to interest costs.”

It's a theme this blog has harped on for the last 18 months. And Grant laid it out very clearly.

For every $1 that the US Government spends today, they currently borrow 43 cents.

What happens when bond traders start to get spooked about America's ability to pay it back?

Interest rates will rise. Plain and simple.

And bond traders today don't even have to get spooked to a fraction of the level that they were in the early 1980s when then-Federal Reserve chairman Paul Volcker had to raise interest rates all the way up to 18%.

If interest rates merely regress to the historic mean, "debt service nearly doubles," chimed in investment banker Lewis Lehrman.

Using projections released by the Treasury Borrowing Advisory Committee on Feb. 1, 2011, rates on the 10-year Treasury note need only rise from today's 3.27% to 5.3% before the debt service figure jumps from today's $413 billion to $800 billion by 2020.

"All of the talk about cutting a hundred billion" this spring would be for naught, says Lehrman. That $100 billion would be consumed four times over just to pay off interest on the debt. (For the record, the $100 billion in question was already debated down to $67 billion on the House floor.)

But where to cut?

With tax revenue running at roughly $2 trillion a year, 40% of the budget would be going to debt service. A rise of 2% in interest rates and America would be even broker than it already is... instantly.

When you look at the numbers there is an inescapable crisis looming on the immediate horizon. A crisis which is going to lead to a dramatic loss of confidence in the US dollar, a crisis which will cause bond traders to force interest rates much higher.

The warning signs are there for anyone who wants to see them.

Get out of debt NOW and position yourself to take advantage of investments that will soar as this plays out.

It really is a no-brainer.

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What we need is Wikileaks for the Federal Reserve

And the JP Morgan Silver Manipulation explained by Cartoon Bears...

And, if you haven't heard it yet, on Sunday US Federal Reserve Chairman Ben Bernanke will be on CBS's 60 Minutes telling America that QE2 will be expanded... quelle surprise!

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