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USA loses AAA credit rating as S&P downgrades due to runaway debt and government

10 Aug

 

NaturalNews

USA loses AAA credit rating as S&P downgrades due to runaway debt and governmentThe USA lost its long-coveted AAA debt rating late Friday as Standard & Poor’s downgraded the nation’s debt to AA+, citing out-of-control government spending and record budget deficits. This is something that key members of the Obama administration promised would never happen (http://thehill.com/blogs/on-the-mon…).

They were wrong, of course; just like the entire cabal of useless bureaucrats in Washington is wrong about what’s going to happen next. This downgrade of the debt rating by S&P, you see, is what NaturalNews and other alternative media leaders have been predicting and warning about for years. The U.S. government’s runaway debt spending, we warned, was entirely unsustainable. The risk of default is not merely high, but it’s actually so high that if S&P had any honesty, it would have downgraded U.S. debt to junk status years ago. (The fact that it’s still at AA+ is a mathematical joke.)

The flight away from US debt

Why does this debt rating matter? Consider, for starters, why S&P waited until after the markets closed on a Friday to even make its announcement. This gives Washington the weekend to try to figure out some kind of rescue plan before Monday morning when institutional investors around the world will begin what can only be called the mass flight away from U.S. debt. The great selloff will begin in earnest, and this will flood the open markets with toxic US debt that no one in their right mind would dare purchase.

Institutional investors, you see, are frequently bound by rules that require them to invest solely in AAA-rated debt sources. With S&P’s downgrade of U.S. Treasury debt, these institutions (which include some of the largest investment funds in the world) must, by their own rules, sell off 100% of their US debt holdings. This will all be happening at virtually the same time when the week opens on Monday.

The impact of all this is that the US will need to pay higher interest rates to issue new debt. It will be more expensive, in other words, for the US to find buyers of its debt, and this will be very quickly reflected in thecompounding debt burden tacked on the total national debt, which is currently at $14.5 trillion and counting (http://www.usdebtclock.org).

Since every administration in the White House absolutely refuses to cut government spending — and the Obama administration wants to INCREASE it! — the government is forced to keep issuing more debt at higher interest rates.

This brings me to the rule of 72.

Compounding debt interest adds up quickly

The rule of 72 provides a simple way to calculate how long it takes for money to double when subjected to compounding interest. Simply take 72 divided by the annual interest rate, and that tells you the number of yearsnecessary for the money (or in this case, the debt) to double.

For example, if you loan me $10,000 and you charge a 7% interest rate, then using the rule of 72, I know that in roughly ten years, I will owe you double what you loaned me, or $20,000.

If you loan me $10,000 and you charge me a 10% interest rate, then I know I’ll owe you $20,000 in 7 years.

At a 12% interest rate, compounding debt doubles every six years.

As compounding interest rates rise, the acceleration of the total debt owes grows very rapidly. So even a tiny increase in the interest rate on debt will result in a compounding accelerated growth in the total debt burden. With S&P downgrading the US debt rating to AA+, the interest rate the US Treasury will now be forced to pay on the debt will be higher than it was before, and this means we are now facing an accelerated financial blowout schedule.

A nation brought to its knees by government crooks and tyrants

The financial demise of the US government, in other words, is now significantly closer than it was two days ago. The fiscally corrupt American empire cannot survive without its false AAA debt rating. That’s why this debt downgrade will accelerate the total debt default we’ve been warning about for years.

The US government today, of course, is run by liars and thieves, crooks and thugs. Virtually every word uttered by the White House Press Secretary is a complete fabrication. Everything you’re being told from official sources about the US debt is a bald-faced lie. The US debt is a giant Ponzi scheme that’s about to come tumbling down in a complete financial wreck. We warned you this was coming, even as internet trolls claimed it was impossible for the US to default on its debt. Impossible? Then why did it nearly happen just last week?

People like Gerald Celente and Paul Craig Roberts have been right about the coming debt implosion, which is why the mainstream media largely refuses to talk to them. Only the alternative media has the guts to report the truth about the impending financial collapse the US government now unquestionably faces.

Even the US Postal Service has financially collapsed and has just announced it is in default (http://news.yahoo.com/us-postal-war…).

Do we even have two years remaining?

S&P says it will revisit the US debt situation in two more years and possibly downgrade the debt rating to AA at that time (http://www.bloomberg.com/news/2011-…). Two years? Are you kidding? I’m not even sure the US government as we know it today will exist at all in two years. And even if it does, things can only get worse because the runaway debt spending will never be halted. Washington is in a spending blowout phase that looks a whole lot like the waning days of the Roman Empire as it tried to service its military imperialism even while its own politicians at home had all become deeply invested in corruption.

As the US spirals into a total financial collapse, you can expect a rise of the police state just as we’re seeing right now with the Rawesome Foods raid (http://www.naturalnews.com/033220_R…). As any empire begins to collapse, it pulls out the guns to try to keep its citizens in line. Free Speech is stripped away from citizens (http://www.naturalnews.com/033244_R…) and law is abandoned in favor of total government tyranny against the People.

That’s precisely what we’re seeing in America today, with the ATF’s illegal gun running (http://www.naturalnews.com/032934_A…), the FDA’s illegal raids on vitamin manufacturers, the USDA’s total betrayal of public health as it conspires with GMO companies to unleash massive genetic contamination across our planet, and so on. We are watching the last desperate gasps of a dying corrupt empire — an empire that can no longer survive by telling the truth so has turned instead to insidious lies and a total assault on freedom.

History will call this time “the beginning of the collapse of the American empire.” You are living it, folks. It’s a fascinating time to be alive. Just try not to get crushed when this once-great empire comes crumbling down all around you. Very few people are prepared for what’s coming. Perhaps 99% of the American people are completely and utterly clueless about all this. They will not be happy when they wake up one day and find out the dollar has been devalued, abandoned or massively hyper-inflated. That’s the day you don’t want to find yourself thinking “Gee, maybe I should have gotten prepared a little sooner…”

My financial preparedness course published in March of this year warned about all this, by the way, and it provides numerous valuable solutions for protecting yourself from the coming debt collapse. Check it out at:http://premium.naturalnews.tv/Be_Pr…

People who have already learned this information are ahead of the gameand will be far better prepared for the massive financial collapse that’s coming. Only people living in total denial can’t see what’s becoming obvious now: The financial end of America approaches.

Learn more: http://www.naturalnews.com/033253_Standard_&_Poor_debt_rating.html#ixzz1USNGtP1R

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Ron Paul is A Constitutional Hero: He Must Be Elected in 2012

10 Aug

 

Ron Paul is A Constitutional Hero: He Must Be Elected in 2012Ron Paul is a constitutional warrior and the only candidate that will uphold our true governmental system. If he is not elected you will see more of the same oppressive dictatorship that you have sen from our last 2 presidents.

Almost the entire republican lineup is fraudulent in some or all areas, yet they are being held up as our saviors.  Meanwhile the congressmen and senators we elected last round that did not sell us up the river are being called out as domestic terrorists.

We must stand behind those who refused to sell us out. Ron Paul is one of those and he is making his run for president this next election. He has went all in this time by stating hewill not be seeking another term as texas congressman. This is a huge step, he is fully committed and so must we.

So here are a few videos to let Dr Paul do his own talking, Listen up and share this info with everyone you know. Your contry is depending on you!!

Ron Paul has roots with the constitution and with the greatest leaders our country has ever known.

Ron Paul talks about Social Security

Ron Paul on Foreign Policy

What if we changed our foreign policy?

Ron Paul explains the Federal Reserve and how it is destroying our way of life

Check out more on Ron Paul here

Ron Paul and the War on Drugs
Ron Paul and the Love Revolution of 2012

Ron Paul to Congress: Stop Stealing from the American People

My Plan for a Freedom President: Ron Paul

Ron Paul’s Voting Record: What Does He Stand For?

Ron Paul Presidential Debate Highlights (Video)

Why Ron Paul, What Does He Stand For?

Ron Paul and the Love Revolution of 2012

10 Aug

Huffington  PostRon Paul and the Love Revolution of 2012

Robin Koerner

Publisher, WatchingAmerica.com

It is often said that a convert to a cause is more fervent than those born to it. That is probably true about me and my “conversion” as an immigrant to this great country.

In that spirit of passionate desire for my adoptive land to become everything it was meant to be, may I humbly suggest, America, that Ron Paul is Your Man.

Just a few years ago, I was excited to follow Obama’s success in the hope that he would undo the worst of the un-American shenanigans of the Bush administration, including the abrogation of rights of American citizens, the killing of citizens of lands that don’t threaten us and the wholesale transfer of wealth from those that create it and play by the rules to those that do neither of those two things.

Perhaps I was a little caught up in the excitement, but my intentions were good.

As it has turned out, in most things that matter, Obama is not even Bush-lite: he’s more like Bush-plus. I’m not questioning his moral intent, but simply looking around me at new wars, continuation of laws that remove Americans’ basic rights, mass transfer of wealth from the working man to the large subsidized groups, including financial corporations and unions, that fund the old political game.

The old, tired, self-defeating left-right paradigm of American politics is about two teams that want to shape the world in one way or another, but both sharing the desire to impose their view on others, and both, therefore, with an interest in maintaining those fundamental aspects of the modern political settlement that allow politicians and their favored institutions to operate outside the most basic confines of the Constitution that was supposed to make the USA a Republic that protects life, liberty and property of all individuals.

Indeed, the two-party system, and all the unstated assumptions shared by both sides, does more to undermine practically the principles gifted by the nation’s Founding Fathers than any other single political structure in the USA (except perhaps the Federal Reserve, which acts secretly and without political accountability).

Ron Paul transcends the left-right pseudo-divide.

He is almost unique in that he doesn’t want to make a country of the left or a country of the right. Unlike every other politician, he doesn’t need me to agree with him on anything — except that I should be free to decide on what to agree or disagree with him about.

Ron Paul’s world is quite different from that offered by almost any other American politician. In his world, neither the president nor the Congress gets to impose their preferences on 300 million citizens through the monopoly of force that is government, because Paul knows that the government has no such authority. Paul’s world is a world based fundamentally on the principle of non-aggression, which is simply, “I may disagree with you but I do not get to use force, including the force of law, to impose my will on you as long as you harm no one.” This principle is a philosophical one. It precedes politics — and that is why it allows Paul to transcend the bankrupt left-right paradigm.

It is this true freedom that, paradoxically (given how most of us disagree about most things) promotes true unity, as division arises only when some people feel imposed upon by others. The promise of a more united nation under Obama (remember?) came to nothing, because Obama’s politics, like Bush’s, are as much about promoting a particular kind of world, which inevitably benefits some at the expense of others.

Ron Paul is one man who doesn’t want to do that, because America was not created for that purpose.

Moreover, if one were to score American politicians on a) integrity, b) philosophical understanding of humanity and governance, and c) understanding of economics by looking at their speeches, votes, books and predictions, Paul would be among America’s Very Best.

The huge movement behind Paul is demographically diverse, and has attracted people who used to think that they were on the left, as well as people who used to think they were on the right — before they found out that what really matters, and what America was designed to preserve, is bigger than both left and right.

But here is the most unlikely, telling, astonishing, and ignored fact about Ron Paul: Paul’s campaign logo (one of a few created spontaneously by his supporters for his 2008 run) has the word LOVE in it.

It actually has the word LOVE, picked out in big red letters from the word “Revolution.” “Love Revolution,” no less.

Politics based on Love?! Can you imagine any Western politician putting that in a speech and not having his or her audience shift in their seats uncomfortably at the strangeness of what they were hearing?

And yet, there it is, “LOVE,” right in the middle of his logo in big red letters.

Love is expansive, accepting, free. It is also kind. (When did you last hear that word in politics?) Love says to its object, “As you wish,” and a Paul presidency would say to its citizens just that: “It’s not government’s job to decide for you. Your life should be as you wish.”

Now, that is true “free love,” 2012 style.

As I ache to see America become the nation that was always meant to be, since 2012 will be the last American presidential election that I will not be permitted to vote in, I can only hope that my adoptive countrymen will take their astonishing opportunity to choose not just a political revolutionary, but also a philosophical one.

In electing Paul, Americans have the chance to say to each other, live and let love — a politics of non-aggression in its profoundest sense.

RON PAUL SAYS 1.3 TRILLION DOLLAR DEBT OWED TO FEDERAL RESERVE IS NOT REAL!

29 Jul

 

America’s national debt is paramount among the concerns of American voters heading into 2012, and while a huge problem, Rep. Ron Paul debuted a quick fix for reducing the debt by at least $1.6 trillion in one shot. Chatting with Iowa radio host Jan Mickelsonyesterday, Rep. Paul recommended the U.S. “declare bankruptcy” and reduce the national debt by dismantling the Federal Reserve, to which we owe upwards of a trillion dollars.

Discussing the problems Greece is currently seeing in their economy, Rep. Paul told Mickelson that America’s per capita debt was not that far off from Greece’s and that America should take note of the protests going on there over the elimination of social programs. He noted that he believed the best option for the nation would be to declare bankruptcy. Given the previous analogy to the United States, Mickelson also asked if he believed America should also go bankrupt, to which Rep. Paul replied, “absolutely” (CNN notes: “Of course, sovereign nations can’t declare bankruptcy the same way a corporation might. Instead, the government would be unable to fulfill its obligations, and would stop making payments on its debt, resulting in a default”).

Mickelson then asked what that would possibly look like, to which Rep. Paul replied that it would be a default, but “the default is happening constantly” without a bankruptcy, anyway. The path on which America is now, according to Rep. Paul, is “the destruction of the currency,” which results in “true chaos,” preventable only by lowering the debt. How does Rep. Paul propose to do that?

I know this is pretty strange for people to even think about this, but we owe like $1.6 trillion because the Federal Reserve bought that debt… They’re nobody, why do we have to pay them off? Why don’t we take away from them and reduce the debt by 1.5 trillion dollars? …We don’t owe that to anybody… They printed the money out of thin air.

Ignoring the Federal Reserve’s existence is probably not the best way to win the coveted “Members of the Federal Reserve” vote, but it’s precisely the red meat Rep. Paul’s fans love the most.

OBAMA TO BANKS: WE’RE NOT DEFAULTING

29 Jul

Fox News

While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn’t raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn’t raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.

While the negotiations to craft a budget remain at an impasse, Republicans and Democrats on Monday began crafting their own plans to cut spending that could lead to an agreement to raise the debt ceiling. It’s unclear if a broad agreement can be reached any time soon, but even if a deal is struck, a complicating issue for lawmakers and the administration is the possibility of a downgrade to the US debt rating, which would cut the triple-A rating on the nation’s debt to a lower level.

Major ratings firms — namely Standard & Poor’s and Moody’s — have said even if the country raises the debt ceiling and doesn’t default, there’s a strong likelihood that the triple-A bond rating will be cut to double-A unless a budget can be crafted that results in $4 trillion in savings, the result of the massive debt load the country has accumulated in recent years. The nation’s outstanding debt is more than $14 trillion.

A senior banking official told FOX Business that administration officials have provided guidance to them that even though a default is off the table, a downgrade “is a real possibility for no other reason than S&P and Moody’s have to cover (themselves) since they’ve been speaking out on the debt cap so much.”

This guidance is a big reason why Wall Street has largely dismissed the possibility of default, and though the markets have been jittery amid the talk of default, they haven’t imploded as would be the case, many economists fear, if the nation missed a payment on its debt.

The banking official said the administration understands that if there were to be a default, it would likely spark another financial crisis.

“They also know they can pay the debt with cash on hand,” this official told FOX Business. The Treasury collects around $2 trillion in tax revenues, and is scheduled to pay out $200 billion in interest to bond holders. In order to meet its obligations to contractors, social security recipients and others, the administration would have to raise another $1 trillion either through cuts, higher tax revenues, the issuance of debt or a combination of all three.

Congressional Republicans believe that the Administration is raising the possibility of a default as a way to ramp up pressure on Republicans to agree to a budget deal that includes tax increases, which they oppose.

Obama to Banks: We're Not DefaultingA Treasury spokesman said that “when we exhaust our borrowing authority, as we will on August 2nd, there is no way to guarantee that we will be able to pay all of our bills. Any suggestion to the contrary is simply false.”

Even without a default, banks expect some market turbulence if the triple-A sovereign-debt rating is cut, sources tell FOX Business. While bank officials do not believe there will be a “catastrophic” effect to a downgrade, that’s not to say there won’t be negative ripple effects, notably to bond deals and derivatives priced off triple-A-rated  Treasurys.

Read more: http://www.foxbusiness.com/markets/2011/07/25/obama-to-banks-were-not-defaulting/#ixzz1TJm0sEWY

OBAMA SAYS HE CANNOT GUARANTEE SOCIAL SECURITY CHECKS WILL GO OUT ON AUGUST 3

29 Jul

CBS News

http://cnettv.cnet.com/av/video/cbsnews/atlantis2/cbsnews_player_embed.swf

President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.

The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2.

Lawmakers from both parties want to use the threat of that deadline to work out a broader package on long-term deficit reduction, with Republicans looking to cut trillions of dollars in federal spending, while Democrats are pushing for a more “balanced approach,” which would include both spending cuts and increased revenue through taxes.

The Debt Limit fight: A primer

Democratic and Republican lawmakers are expected to hold another round of negotiations with Mr. Obama at the White House Tuesday afternoon on long-term deficit reduction, though talks have yielded little results to date.

Mr. Obama told Pelley “this is not just a matter of Social Security checks. These are veterans checks, these are folks on disability and their checks. There are about 70 million checks that go out.”

More from the interview:

Mr. Obama’s comments followed remarks from the Senate’s top Republican, who said Tuesday that he did not see a way for Republicans and Democrats to come to agreement on meaningful deficit reduction as long as Mr. Obama remains in office.

“After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable,” Senate Republican Leader Mitch McConnell said in remarks on the Senate floor.

Still, McConnell said Republicans would “do the responsible thing” to avoid default, suggesting that a deal on the debt ceiling could be reached without a “real” deficit reduction package.

“The president has presented us with three choices: smoke and mirrors, tax hikes, or default. Republicans choose none of the above. I had hoped to do good, but I refuse to do harm. So Republicans will choose a path that actually reflects the will of the people, which is to do the responsible thing and ensure that the government doesn’t default on its obligations,” he said.

Obama says he cannot guarantee Social Security checks will go out on August 3

Obama says he cannot guarantee Social Security checks will go out on August 3

Mr. Obama has repeatedly said he wants a deal that would allow the U.S. to avoid confronting the issue again until after the 2012 elections and vowed on Monday that he would “not sign a 30-day or a 60-day or a 90-day extension.”

“This the United States of America and, you know, we don’t manage our affairs in three-month increments. You know, we don’t risk U.S. default on our obligations because we can’t put politics aside,” Mr. Obama told reporters at the White House yesterday.

RON PAUL TO CONGRESS: STOP STEALING FROM THE AMERICAN PEOPLE

29 Jul

RonPaul.com

Ron Paul on the debt celing

by Ron Paul

Ron Paul to Congress: Stop Stealing from the American People Imagine you had a pesky neighbor who somehow took out a mortgage on his house in your name and by some legal trickery you were obligated to pay for it. Imagine watching this neighbor throw drunken parties, buy expensive cars, add more rooms to the house, and hire dozens of people to wait on him hand and foot. Imagine that he also managed to take out several credit cards in your name. One by one, he would max them out and then use your good name and credit to obtain another credit card, then another and then another. Each time, this neighbor would claim that he needed the new credit card to pay interest on the other maxed out credit cards. If he defaulted on those cards, your credit score would be hurt and when you wanted to buy something for yourself, it would be more difficult to get a loan and the interest you paid would be higher. Imagine that you mulled this over, and time after time, said nothing as he filled out more credit applications so he would not have to default on the other debt taken out in your name. Meanwhile, another shiny new Mercedes appears in his driveway. At what point do you think you might get tired of this game? And, even though you are left with no really good options, do you think you might eventually tell him to go ahead and default, just stop spending your money!

This analogy demonstrates the position we are in with our government and the debt ceiling. The government has run up a huge debt in the name of the American people, who are sick and tired of being on the hook for it. There are no really good options left. Defaulting on a portion of the debt may not be without costs, but it is better than handing the government yet another credit card.

The government is using the usual scare tactics to strong-arm the people into going along with more spending. Remember the rhetoric surrounding the big bailout of October 2008? We were told, not that this would be calamitous for the banks, but for the people, who would continue to experience massive job losses and foreclosures. We were told that the economy would sink into a deep recession if this money was not handed out to too-big-to-fail corporate cronies. So, after much hand-wringing, leaders from both parties, against unprecedented public outcry, agreed to shower money on the banks and increase the debt. The banks learned nothing, except that Washington will come to their rescue, no matter what. The people, however, continued to lose their jobs and houses anyway, and here we are, still in a deep recession.

When you read the above example, your first reaction might have been to dismiss the neighbor’s debt as illegitimate and in no way your responsibility or your problem. You would be right. No fair-minded legal system would hold you responsible for such a debt, and would instead cart your thieving neighbor off to jail. Yet Congress can impose liabilities on you, your children, and grandchildren without your consent, and even without your knowledge. This is another example of government holding itself above the law. Much like the TSA claims the right to molest us, yet arrested a woman who turned the tables last week, stealing somehow becomes legitimate when the government does it.

We supposedly live in a nation of laws. For once, government needs to heed the law regarding the debt ceiling.

See if Ron Paul is consistent. Check Ron Paul’s Record