New FEC Report Shows DNC Finished June $3.3 Million in Debt

Under the leadership of former Obama official Tom Perez, a new FEC report reveals the DNC finished the month of June $3.3 million in debt. --They’re broke. Just like their policies. --According to The Observer, DNC Chair Tom Perez recently sent out a fundraising email to supporters claiming, “I know garbage when I see it,” citing that he once worked on a dump truck. It’s ironic that he referred to the GOP health care bill as a “flaming dumpster fire” because he has been presiding over the disaster that is the Democratic National Committee. --According to The Hill, The Republican National Committee (RNC) raised a record $13.4 million in June, bringing its total 2017 fundraising to $75.3 million.

Read more at Gateway Pundit

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Democracy’s Death Spiral

(Hat tip: KimR) - On Monday, Puerto Rico missed a payment on $422 million worth of bonds. If the United States doesn’t come to the rescue, this will be only the first of many defaults to come. In all, the island has $72 billion in debt and an additional $46 billion in unfunded pension liabilities – totaling more than the country’s annual GDP. As debt mounts, potential taxpayers are fleeing: 84,000 Puerto Ricans moved to the United States just last year alone. Read more at Townhall.com Read More......

In 6 Months Since Budget Deal: Debt Up $1 Trillion

(Hat tip: KimR) - In the six months that have passed since then-retiring House Speaker John Boehner and Senate Majority Leader Mitch McConnell cut a budget deal with President Barack Obama that suspended the legal limit on the federal debt until March 15, 2017, the federal debt has increased by just over $1 trillion. Read more at CNS News Read More......

Auditor: Government Will Owe More Money Than Entire Economy Produces

(Hat tip: KimR) - An auditor for the Government Accountability Office told lawmakers  Wednesday that in the next few years the federal government will owe more than our entire economy produces. Read more at the Washington Free Beacon Read More......

Senate Dem: National debt is not 'a threat to our country'

(Hat tip: KimR) - Senate Democrats on Wednesday couldn't agree that federal debt is a national security problem, in a hearing aimed at assessing the long-term strategic implications of the government's $19 trillion debt. --"A realistic discussion about it, and accepting expert opinion that this debt that we have is not actually right now a threat to our country, is I think a more realistic and honorable way of talking to the American people about it," Sen. Ed Markey, D-Mass., said during a Senate Foreign Relations Committee hearing on Wednesday. Read more at the Washington Examiner Read More......

Credit Card Debt In The United States Is Approaching A Trillion Dollars

(Hat tip: KimR) - For the first time ever, total credit card debt in the United States is approaching a trillion dollars. Instead of learning painful lessons from the last recession, Americans continue to make the same horrendous financial mistakes over and over again. Read more at The Economic Collapse Blog Read More......

Weimar America

(Hat tip: KimR) - Neither the president nor his would-be successors talk much about the fact that we are now nearing $20 trillion in debt-in an ossified economy of near-zero interest rates, little if any GDP growth, and record numbers of able-bodied but non-working adults. (The most frequent complaint I hear in my hometown is that the government lags behind in their cost-of-living raises in Social Security disability payments.) Read more at PJ Media Read More......

Debt, defaults, and devaluations: why this market crash is like nothing we've seen before

A pernicious cycle of collapsing commodities, corporate defaults, and currency wars loom over the global economy. Can anything stop it from unravelling? A global recession is on the way. This truism of economics holds at any point in which the world is not in the grips of a contraction.

Read more at the UK Telegraph
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By the Way, The National Debt Just Blew Past $19 Trillion

In case you missed it late last week, President Obama blew past another grim mile post on America's highway toward insolvency and forced austerity, as the national debt surpassed $19 trillion -- a figure larger than the size of US GDP.  The Daily Signal puts this towering number into perspective:

Read more at Townhall.com
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Puerto Rico filing says govt. likely to cut services or default on debt before year's end

Puerto Rico's government will likely have to cut back on public services or default on debts before the end of the year because it is running out of cash, the Government Development Bank said in a financial filing. Putting numbers to a warning this summer from Gov. Alejandro Garcia Padilla, the filing late Friday said the U.S. territory had a $370 million overdraft as of Sept. 30 and burned through a $400 million emergency loan from a group of public corporations to keep government operating. It also cut revenue estimates for the current fiscal year by $355 million because of weaker than expected collections.

Read more at CNBC
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Largest U.S. banks face $120 billion shortfall under new rule

Six big U.S. banks need to raise an additional $120 billion, most likely in long-term debt, under a rule proposed on Friday by the Federal Reserve. The requirements are aimed at ensuring that some of the biggest and most interconnected banks, which include Goldman Sachs Group Inc, (GS.N), JPMorgan Chase & Co, (JPM.N), and Wells Fargo & Co (WFC.N), can better withstand another crisis by turning some of their debt, particularly debt issued by their holding companies, into equity without disrupting markets or requiring a government bailout.

Read more at Reuters
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US interest rate rise could trigger global debt crisis

Debt ratios have reached extreme levels across all major regions of the global economy, leaving the financial system acutely vulnerable to monetary tightening by the US Federal Reserve, the world's top financial watchdog has warned. --The Bank for International Settlements said the wild market ructions of recent weeks and capital outflows from China are warning signs that the massive build-up in credit is coming back to haunt, compounded by worries that policymakers may be struggling to control events.

Read more at the UK Telegraph
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Puerto Rico: No money available to make $58M bond payment

Puerto Rico's government said Friday it would not make a $58 million bond payment due on the weekend and warned that the general fund will run out of liquidity by November if no action is taken. --Gubernatorial Chief of Staff Victor Suarez said at a news conference that the island's Public Finance Corporation could not meet the payment due Saturday. --"We don't have the money," he said, adding that the government still hopes to reach an agreement with creditors on renegotiating its debts. Gov. Alejandro Garcia Padilla warned several weeks ago that the government and state agencies cannot repay the $72 billion in public debt that hangs over the U.S. territory, which is struggling with a nearly decade-long economic slump.

Read more at the Associated Press
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Syriza’s historic win puts Greece on collision course with Europe

European politics has been plunged into a volatile new era following a historic victory in Greece’s general election by far-left radicals committed to ending years of austerity. --More than five years into the euro crisis that started in Greece in October 2009 and raised questions about the single currency’s survival, Greek voters roundly rejected the savage spending cuts and tax rises imposed by Europe which reduced the country to penury.

Read more at the UK Guardian
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Will Puerto Rico Cause An Inadvertent “Black Swan” Derivatives Melt-Down?

I really had not been paying much attention to the Puerto Rico debt situation. After all, $72 billion in debt that might go bad – big deal. The Fed can print up $72 billion in credit lines with the push of a button. --But a friend of mine happened to mention to me today (Monday) that MBIA’s stock was down over 23% and Assured Guaranty’s stock was down over 13%. That woke me up. --Companies like MBI and AMBAC underwrite credit “enhancement” guarantees on these massive cesspools of debt – and the associated derivatives that are “wrapped around” the debt structures – and stick them in VIEs.

Read more at Investment Research Dynamics
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Puerto Rico says it cannot pay its debt, setting off potential crisis in the U.S.

The governor of Puerto Rico has decided that the island cannot pay back more than $70 billion in debt, setting up an unprecedented financial crisis that could rock the municipal bond market and lead to higher borrowing costs for governments across the United States.

Read more at the Washington Post
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Greece Says That It Will Default On June 5th, And Moody’s Warns Of A ‘Deposit Freeze’

The Greek government says that a “moment of truth” is coming on June 5th. Either their lenders agree to give them more money by that date, or Greece will default on a 300 million euro loan payment to the IMF. Of course it won’t technically be a “default” according to IMF rules for another 30 days after that, but without a doubt news that Greece cannot pay will send shockwaves throughout the financial world. At that point, those holding Greek bonds will start to panic as they realize that they might not get paid as well. All over Europe, there are major banks that are holding large amounts of Greek debt and derivatives that are related to the performance of Greek debt. If something is not done to avert disaster at the last moment, a default by Greece could be the spark that sets off a major European financial crisis this summer.

Read more at the Economic Collapse Blog
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The federal debt is worse than you think

Debt figures tell part of the story. When the Great Recession hit, the federal debt was equal to about 40 percent of GDP. But to fight the recession, Congress enacted an $800 billion dollar stimulus bill. Stimulus spending, combined with already enacted spending and tax policy, resulted in four years of trillion dollar deficits. As a result, the debt ballooned to 78 percent of GDP in 2013, almost twice the pre-recession level. --snip-- What's the word for our fiscal situation? Stunning? Shocking? Desperate? In recent testimony before the Senate Budget Committee, Boston University Economics Professor Laurence Kotlikoff, in effect, told the Committee that all of these terms are pathetically inadequate to describe our true fiscal situation.

Read more at the Brookings Institute Read More......

The Educated Socialism of Obama

We generally do not post advertisements but I am doing so now, not for any financial recommendation, but for the historical and analogous information regarding our economy.  On 2/16/2013, Steve Sjuggerud's DailyWealth, a free email subscription, contained an article by Porter Stansberry, who did an excellent job of describing the perils of the economy and social ills we have been experiencing and are experiencing even more so now under President Obama. --bc

In Wednesday's essay, I laid out the "great lie" that is bankrupting America. ✧ At the heart of this lie – told by so many of our political leaders and believed by so many of my fellow citizens – is a horrifying turn of events. As I mentioned, the drive for freedom and a better life through hard work, saving, and independence has been replaced by a craven need for the illusion of security. ✧ Rather than trying to leave our children in possession of a better world – with more financial security – political leaders around the world now bicker about how to change the rules so that still more debt can be stacked upon their grandchildren. ✧ For an idea on how things will turn out, a few lessons from history are instructive...

The Spanish Empire destroyed itself by "finding" money, rather than by building industries. And the key to its temporary wealth was a single mountain in Bolivia, "Cerro Rico" – the Mountain of Riches.

At least, that's what the Conquistadors named it. In Bolivia, they call it "the mountain that eats people." Thousands of slaves died trying to satisfy Spain's lust for treasure.

In Cerro Rico today, silver is still mined by people making a few dollars a day using pickaxes in dust-filled shafts with no ventilation, no light, and no safety features of any kind. The 10,000 miners who work there every day toil under the constant fear that the entire mountain could collapse on them. After 400 years of unregulated mining, it's like Swiss cheese.

Bolivia's politicians use these conditions to demand more power and implement more socialism. Of course, it's the poverty caused by decades of socialism that actually prevents modern mines from being built.

Last month, Bolivia's current socialist strongman, Evo Morales, published his Ten Commandments Against Capitalism. He starts out broadly with No. 10…

Economic development must not be oriented to the market, to capital and to profit; development must be comprehensive and be oriented to human happiness, harmony and equilibrium with Mother Earth.

Then he gets to the real point…

We must free ourselves from that colonial bond called the External Debt, which serves only to blackmail us, to oblige us to hand over our assets and privatize our natural resources, and to destroy the sovereignty of peoples and states.

The colonial External Debt is the mechanism of exaction and impoverishment that afflicts the developing countries and limits their access to development. We call for canceling this unjust External Debt. No more inequality. No more poverty. It is time to distribute the wealth.

 These aren't just empty words, either. In June 2011, Morales nationalized the Toronto-listed South American Silver exploration firm, promising only compensation "later." Six weeks later, Bolivia decided that the compensation paid to the Canadians would be zero. Nada, zilch, nothing. Apparently, it was time to seize their wealth.

The people of Bolivia cheered this madness. As their reward… Bolivians will continue to work in some of the most dangerous and least-efficient mines in the world. Their real wages will continue to fall. That's because without capital investment, without savings, without property rights… without the responsibilities of capitalism… there will be no increase in wealth.

Bolivia's socialist policies will have the same economic effect as similar activities in Venezuela and Argentina… The black market rate for dollars in Venezuela is three to four times higher than the official exchange rate. In Argentina, the "blue" dollar rate is 50% more than the official rate.

The looming crisis in these countries interests us in two ways… First, because so much of the world's raw materials (including food and hard commodities, like metals) come from countries like these, a return to socialism will undoubtedly cause shortages and price spikes around the world.

But on a more important and deeper level, ask yourself, what's the real difference between Evo Morales and our current American political leaders?

President Obama and his puppet at the central bank, Federal Reserve Chief Ben Bernanke, are also calling for us to cancel our external debt. They're just saying it in a smarter way, calling it "quantitative easing."

And what's the real difference between what Morales advocates in his Ten Commandments Against Capitalism and what's happened in the U.S. over the past decade? First, President Bush granted free medicine to every retired American. Then, Obama pushed through "free" health care for everyone. In his State of the Union address, he labeled these benefits, plus Social Security payments, "civil rights."

That's pure madness. Rights are something you're born with as a human being. They describe what people can't do to you or take from you.

The government cannot guarantee you any benefit or service without first taking it from someone else. That's why the promise of socialism is merely the promise of plunder. Whether it will benefit you depends on where you stand. However, the nation as a whole cannot become wealthy through the plunder of its own citizens. This one fact explains why Argentina – which was the fifth-wealthiest nation in the world 100 years ago – now ranks 50th.

That's where we're headed. Make no mistake. By 2020, the costs of Social Security and Medicare alone will reach $2.5 trillion a year. That's more than the U.S. federal government collects in all forms of tax ($2.4 trillion) today.

The only things funding these programs are lies and taxes. We've been paying for these programs out of current revenues all along – just like convicted hedge-fund scammer Bernie Madoff used new money to create the illusion of returns for existing clients. There is no way we can afford these obligations without making them far more redistributive and increasing payroll taxes enormously. Obama says "of course" we need more taxes. And he's going to do everything in his power to levy them.

It's time to distribute the wealth, all around the world.

AT THIS POINT THE ARTICLE TURNS INTO A FINANCIAL RECOMMENDATION BUT THE INFORMATION IS STILL WORTHWHILE READING. --bc

The true costs of the world's return to socialism will strike the mining industry first. That's because mining requires immense capital investments over long periods of time. These mines are sitting ducks for politicians, who can tax them or nationalize them easily… all while the public cheers them on…

TAKE NOTE THAT STANSBERRY WRITES, "...THE WORLD'S RETURN TO SOCIALISM WILL STRIKE THE MINING INDUSTRY FIRST." OTHER INDUSTRIES WILL FOLLOW. --bc

But that greatly reduces existing supply and makes new supplies incredibly difficult to procure. In short, you can print money, but you can't print metals. And this explains the price spike in gold and silver over the last four years.

Still, all these precious metals do come from somewhere…

While we don't believe that mining companies are a good investment in the long run, they can be incredibly lucrative as short-term speculations. Politically driven market disruptions make mining stocks soar. That's why gold- and silver-mining companies have also long been thought of as crisis hedges – just like refined metal. And we're about to enter an extended – perhaps decades-long – period of unprecedented, politically caused market disruption.

That's why I'm encouraging my readers to buy precious metals like gold, silver, and platinum. Although these metals have appreciated in value over the past 12 years, they have much further to run.

Good investing,

Porter Stansberry

Further Reading: "The world's markets are beginning to go haywire," Porter wrote Wednesday. "You can see the signs everywhere… And the best way to protect yourself from catastrophe is to benefit from the same policies that are causing it." Get the details here: The Great Lie That Will Bankrupt America.

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Illinois Governor proposes federal bailout for his state

Illinois is one of the public union states that will one day need a federal bailout because of their pension shortfalls. Governor Quinn has now made that official by pointing out in his budget proposal that, “significant long-term improvements” in that debt will come from “seeking a federal guarantee of the debt.” ✧ Wonder how the governors of other states that have taken fiscal responsibility for their spending or “right to work” states will enjoy subsidizing undisciplined public union states like Illinois and California? Read more at the Rockford Register Star...

Related:
Wall Street Journal: An Illinois Pension Bailout? - Governor Quinn wants you to guarantee his state's pensions.
State Budget Solutions: Block any pension bailout now to force reform By Frank Keegan Read More......