Crossing the Debt Saturation Threshold
We have plunged through the debt saturation threshold, where we can no longer purchase GDP growth with ever-increasing scales of deficit spending ... an activity that has been so central to this entire post-Bretton Woods experiment in unbacked fiat currency (and every preceding fiat experiment before it).
The image in comment #1 below charts the dramatic failure of an entire financial paradigm. Place it next to a chart of gold, and the picture becomes clearer still.
What options remain when you can no longer spend your way out? So far the Fed's actions have made it clear that no alteration of present policy is on the table. So far the Obama administration has not backed away from its own frightful (albeit reliably understated) deficit projections. So far all Congress has done is to endorse too-big-to-fail even under the guise of "financial reform".
I said it on the Capitol Hill lawn on the eve of the TARP vote in 2008, and I'll say it again today: you can't solve a debt crisis with debt unless you're willing to sacrifice the underlying currency and impoverish your people in the process. Austerity is an unpopular word, but by hook or by crook, it will eventually become the law of the land. The window of voluntary austerity continues to close, leaving behind only one scenario to play out ... a stagflationary depression that will reshape the global balance of power and erase words like "land of opportunity" from the modern American lexicon.
We don't have to take it lying down. Tell your representatives in Congress to enact real financial reform that addresses the root causes of this crisis (expecially the world-altering obscenity that is the global market for derivatives), and make it clear to them that you intend to replace them unless they support rational fiscal policy and an unfettered audit of the Federal Reserve. Too much is at stake for us to remain hapless victims of Congressional whimsy and Western fiscal malfeasance.