Economic collapse is inevitable, here’s why…

How is the U.S. government going to finance 70 trillion in liabilities?

If you have been paying attention so far, you should be able to guess correctly… by borrowing. The U.S. government is planning to finance 70 trillion in obligations by selling treasury securities (interest bearing IOU’s) putting America into even more debt.

Since our national debt is exploding and our annual deficit keeps growing every year, we’re forced to admit an obvious fact: our government can not pay its debt without taking on more debt.

This is by definition, a Ponzi scheme. To keep the Ponzi scheme going you must have a constant and ever expanding flow of investors. If the flow stops or even slows down, the whole thing starts to collapse. This is why the government must continuously raise the official debt ceiling.

All Ponzi schemes eventually collapse and our debt-currency system has the same fatal flaw by design.

“There’s no safety in U.S. treasuries. When interests rates go up, we’ve got to default on those treasuries. We can’tamarketrate of interest, let alone retire the principal. Most of the treasuries that are being bought have very short maturities. We have 5 or 6 trillions coming due in the next year, we can’t pay that back. We’re counting on our creditors to loan us back the money to repay the debt. This is a Ponzi scheme.

It’s the same situation as I said Greece was in. They had no problem selling their bonds when the rates were low. But the minute people figured out that the Greeks couldn’t repay the debt, they didn’t want to buy them anymore. The same thing is going to happen. You have a false perception of safety in the Treasury market. It’s not safe at all. It’s a trap. And it’s being set by Central Banks, the Fed is the biggest buyer, they’re buying like 90% of long term treasuries… ”

via soundofheart.org

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