Moral Outrage
Whew! God help us!

The undeclared creeping US bankruptcy

In essence the US is bankrupt, but how will it go about filing for bankruptcy?

There are 2 ways – one is to default on its debts. This would create a massive convulsion and crash the markets, leading to an almost instant depression. This is not so attractive to politicians or the elites as it means severe austerity for the masses resulting in rioting on the streets, and them being dragged out of their government buildings and palaces etc and perhaps being mobbed as happened to Prince Charles in England recently, due to Britain’s austerity measures.

The other way to file for bankruptcy is to do it in an undeclared creeping manner, by continuing the printing of whatever money is required. This has two great “advantages” – one is that it buys time for the elites to continue living in the style to which they have become accustomed for as long as possible, and the other is that is the continued debasement of the currency lowers the real value of debts so that they can be theoretically repaid with almost worthless money.

This second option involves high inflation and in the case of the US must lead to hyperinflation, because of the astronomical extremes of debt that now exist.

With the quantitative easing (QE)* course now firmly established, it is clear the US has elected the currency debasement option.

The big unanswered question is whether the US “financial engineers” will be able to maintain control as it proceeds down the road of currency debasement.

[Excerpt of an article by Clive Maunde]

*The term quantitative easing (QE) describes a monetary policy used by central banks to increase the supply of money by increasing the excess reserves of the banking system.

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