End of 2011: The European Crisis Will Be The Trigger That Detonates The US Debt Bomb

LEAP2020:

...[There will be] a sharp decline of 30% on the part of US currency in 2012, as we announced last April (GEAB N°54 ), which will occur amidst a sharp reduction in demand for the US dollar and the worsening of the US governmental debt crisis. The end of 2011 will therefore see, as anticipated, the trigger of the European debt crisis detonating a US bomb.

...Speaking of public debt, it is time to turn to the United States. The coming weeks figure to remind the world that it is this country, not Greece, that is at the epicenter of the global systemic crisis. In one week’s time, on November 23, the Congressional “Supercommittee” in charge of reducing the US federal deficit will admit its failure to find 1,500 billion US dollars in savings over ten years. Each side is already crafting arguments that will blame the other side

...The predictable failure of the “Supercommittee”, which reflects the overall paralysis of the US federal political system, will have an immediate and drastic consequence: a new series of credit ratings deteriorations. The Chinese agency Dagon has opened fire, confirming that it would once again lower the rating upon the failure of the “Supercommittee”. S&P will probably lower one more time the US rating, and Moody’s and Fitch will have then no other choice but to get on board, having given the US a reprieve until the end of the year under condition of effective results in terms of public deficit reduction. Incidentally, in order to dilute the flow of negative information in this regard, it is likely that there will be an attempt to reinforce the public debt crisis in Europe by lowering France’s rating in order to weaken the European Financial Stability Fund.

All of this makes for an eventful season for the financial and monetary markets, casting severe blows on Western banking systems and, beyond that, on all US T-Bond holders.

...With the failure of the MF Global investment fund, we have seen that Wall Street titans can crumble at once...

...We announced in the previous GEAB that we have entered a phase involving the decimation of Western banks. This phase is truly in swing, and customers of all financial operators (banks, insurance companies, investment funds, pension funds) are now questioning the soundness of these institutions...

[link to www.leap2020.eu]

JIM WILLIE: THE GREAT CREDIT SWINDLE

The death of the monetary system has its main motive in the refusal of governments either to manage finances responsibly or to repay debt in the usual manner. They accumulate larger debts and plan the swindle of inflation in return. Their only viable approach, hardly a solution, is to inflate debt and thus to reduce its burden. Creditors feel betrayed, seek defensive measures, like to cut off credit and loan up quietly on gold, while lying about reserves. The creditors are not involved in the important decisions to debase the currency. Those decisions are made unilaterally by the debtors. A run on the US Treasury Bonds is occurring by angry foreign creditors. The USDollar is kept afloat by some secret corners. The pages of history are littered with examples of government debt default, but more often with the public paying for debt reduction in basic price inflation. The debts accumulated by many governments large and small cannot be repaid. History shows that tangible assets like Gold & Silver protect from the worst economic consequences. For the current financial crisis, only one pathway seems likely, although painful. The system cannot be remedied, only patched over. Vast inflation is the only politically viable method of repudiating these unmanageable obligations...

The retreat is well along, the isolation to the hyper inflation machinery well along, the sovereign bond ruin well along. The Fed was hit with withdrawals of $83.3 billion on November 2nd, the largest withdrawals coming from its deposit accounts. This single day removal was the largest since February 2009, and not associated with quarterly tax payments. The withdrawals are being demanded by countries angered by USGovt policies, like China, Russia, Latin American, and other Asian players. It is only the beginning of a bloodletting. A run on USTBonds is in progress, covered up by Quantitative Easing and Operation Twist, programs given innocuous names but integral to the grand debasement process underway. The bond exodus is complemented nicely to significant removal of depository funds from the major banks in the 'Move Your Money' movement. Despite pleading by the big US banks for customers not to extract their money, impressively 650 thousand customers moved a total $4.5 billion dollars out of the big banks. The damage done is 10x to 20x, due to fractional banking practices. The funds went into smaller banks and credit unions in October.

BANK RUN NEXT FOR ITALY

THE EUROPEAN BANKING SYSTEM IS TOPPLING. IT CANNOT BE STOPPED. GREAT CONTROVERSY WILL RESULT. MOST LARGE BANKS ARE POSTING HUGE LOSSES FROM GREEK EXPOSURE. THE NEXT ROUND OF LOSSES FROM THE OTHER P.I.I.G.S. NATIONS WILL BE AN ORDER OF MAGNITUDE LARGER. THE EXTREME BREAKDOWN WILL OCCUR WHEN THE BIG FRENCH BANKS GO BUST:

...The French banks bear the largest load for Italian Govt debt, more than double the German load and almost half the entire European load.

...A string of Credit Default Swap claims on debt default would expose the entire market as corrupted and under-funded by a wide margin to honor claims.

...Witness a possible hidden derivatives meltdown, as the European implosion has a conduit to the United States

[link to www.financialsense.com]

Last Edited by MARTIAL LAW on 11/18/2011 09:29 AM