I haven't posted in just over a month now. I've been watching the economy and politics, wondering when the crash is going to come. There are enough indicators that it is going to happen, what with the government spending like there is no tomorrow, China signalling that it will stop buying our debt, phantom buyers of treasury bills, and the price of gold persistently staying above $1,100.00 per ounce. I have been noticing something interesting about gold over the past few weeks: whenever the price gets over $1,140.00 and appears to be heading higher, there is a sudden drop off in the price, bringing it down near $1,100.00. I have noticed that this just about always happens only when the NYMEX market is open. Is someone manipulating the price of gold to keep the dollar afloat?
So, I firmly believe that an all out economic collapse is in the works. I don't know if it is a slow collapse over a period of weeks or a sudden collapse within the space of a day. But there is no way that the government can continue to spend the way it does without consequences.
Today I read some news that I believe is the other shoe, and that it has dropped. Get ready for the collapse to gain momentum.
According to this story on Newsmax, the social security trust fund is now running a deficit. It is paying out more to retirees and other claimants than it is taking in. What is even more alarming is the fact that the social security trust fund is now going to call in all of the IOU's from the federal government. That's right, the government is going to have to start paying back all of the money that it borrowed over the years to finance massive deficit spending.
The federal government borrowed from the social security trust fund so it would not have to borrow from foreign sources (read: China).
The solution seems simple. Either cut spending or replace the "domestic" borrowing from social security with foreign investors. If the recent news is any indication, cutting spending is out of the question. The Obamorons plan on running a deficit in 2010 of over $1,500,000,000,000.00. That's before we add in the costs of the Obamacare Obamination and other boondoggles.
That leaves foreign sources. The two biggest foreign purchasers of our debt, China and Japan, have been cutting back. China has been rumbling that it will not be purchasing more and will in fact sell off treasury bills if something doesn't change. So far the Obastard has thumbed his nose at the Chinese. Japan doesn't look much better after it has elected a less-than-pro-U.S. government.
With tax receipts in free-fall, the federal government has little choice but to crank up the printing presses and line up more phantom buyers at the treasury auctions.
I think this is the beginning of the end. Got preps?