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alstry (36.32)

RELAX!!!! Why we are ALL Broke!!!!

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August 07, 2009 – Comments (33)

When I started practicing law, my law partner told me that the most important decision a man can make in his life, aside from picking his wife, is picking his business partner.  The reason, in a partnership relationship, there is joint and several liability.

Wikipedia defines it as follows:

If parties have joint liability, then they are each liable up to the full amount of the relevant obligation.

The key word is FULL....each party is responsible for the full amount of the obigations incurred by the other partner.

If you are a citizen of the United States of America, you effectively have joint liability with the government.  If our government goes to war, we go to war too.   We have to join the military or offer up our children if deemed necessary. 

The same applies to the debts our government incurs.  If our government needs money, it must either borrow it or obtain it from the citizens.  In the end, if our government owes money, we owe money.....after all money is simply a non interest bearing debt instrument called a Federal Reserve Note.

For over 200 years, government was pretty much a responsible business partner looking out for the operation of the United States of America and the interests of the citizens.  When we started out, government was very small and we had no problem funding its role.

As time went on, things got a bit more complicated.  Government grew larger and larger and started demanding more and more from us while borrowing more and more as well.  Anybody who has dated or been married to a high maintenance spouse understands this concept very well.

Unfortunately, as government borrowed more and more, its citizens had to borrow more and more just to keep up.....so did hospitals, schools and businesses.  Most kept borrowing until they could no longer borrow any more.

At this point, the population of America simply cannot sustain the obligations its government has incurred.  As citizens, we are responsible for these obligations, even if we did not leverage ourselves or our families.... just like we would be responsible for war even though we didn't personally pick the fight with the enemy.

Governments across America are going broke.  Our pensions are underfunded and receipts are contracting at historically unprecedented rates. Soon government will be forced to make a decision.  That decision will affect ALL of us because we are ALL responsible.

For now, government has chosen to transfer most of the nation's dwindling wealth to a few bankers and select businesses while concealing the current financial condition.  My guess is within the next sixty days, more and more of us will become aware of the actual state of our joint balance sheet.

Alstry is more confident government is running out of options as fewer and fewer will likely extend credit in light of contracting receipts..... the key issue going forward is what will be demanded of us.

Government/Fed is the Zombulator and the Zombulator must be fed.

Whether you like it or not, as a citizen of the United States, we are all jointly and severally liable with the Zombulator....a legal relationship that Alstry understands well.

If government simply starts printing, just relax.  Our debt obligations are so high that no rational person will extend credit without burdensome interest rates.  Since much of our debt is short term based, we will need to borrow more and more to sustain ever growing interest rates to the point where government will have to print so much that money will be effectively worthless.

When you run out of money and access to credit, you are effectively broke......when a loaf of bread is $10,000,000 due to valuless currency, your financial state is really not much different.

It could go either way........are you prepared?   I know it is difficult to imagine since it has never happened before.  For over 200 years we could support government and government was fairly responsible spending mostly what we gave them from our earnings.  Something happened in the last thirty years.  Government's debt addiction really cranked up to an unsustainable level where we can no longer collectively support government based on our current economy.  If you think about it, really not much different than Bernie's operation for over 30 years of borrowing and giving, can you imagine how Bernie Madoff's clients felt the day they learned Bernie we effectively broke?

There is nothing fun about this, it is simply reality.  Let's hope we deal with reality fairly as we get through this period in our history.

33 Comments – Post Your Own

#1) On August 07, 2009 at 12:41 PM, prose976 (< 20) wrote:

Man, Alstry.  You really must be ALL-IN short.  If you can't get this market to tank by 9.09 you're in for a world of hurt.

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#2) On August 07, 2009 at 12:41 PM, HighRisk41 (28.26) wrote:

Just to give people an idea of our debt obligation to our wonderful government here are some numbers for ya.

According to the Congressional Government Accountability Office, Medicare/Medicaid is insolvent with an unfunded liability of $39.547 TRILLION, in addition to the $10.597 Trillion in Social Security, and $8..455 Trillion in Prescription Drug liability puts a total of $57.916 trillion in unfunded existing liability for current socialized entitlement programs. When you add the $11.4 trillion national debt and the $11.8 trillion government bailouts and guarantees from TARP and the Federal Reserve, each citizen is on the hook for $256,000 ($81.116 Trillion/306 million) or about $788,000 per household, which our children and grandchildren will be forced to bear the brunt of this debt.

Im really looking forward to paying that back... cant wait!!! yay to big government!!

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#3) On August 07, 2009 at 12:59 PM, mliu01 (< 20) wrote:

HighRisk: add CC debt mortgage debt, car debt.

 you are talking about 1 million in debt per family. And paying it while they don't have a job.

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#4) On August 07, 2009 at 1:00 PM, givmeabreak (28.87) wrote:

Alstry, I am struggling to see how your predictions carry any weight anymore after your DOW 8300 as a top call has gone so badly. It is off by 1,000 points!

What makes you so sure that this time is different with the MOAP at the end of September?

It is obviously just a wild ass guess on your part, which is why you don't ever give a specific event that goes with your MOAP...

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#5) On August 07, 2009 at 1:00 PM, alstry (36.32) wrote:

prose,

You just don't get it.....you business partner has a HUGE monthly nut and owes over $20 trillion dollars if you include cities, states and counties.....plus another $50 Trillion in entitlement obligations currently and in the future....

THE REVENUES TO YOUR BUSINESS PARTNER HAVE EVAPORATED OVER THE LAST SIX MONTHS.....IT NEEDS OVER $6 TRILLION PER YEAR AND IT IS GETTING HARDER AND HARDER TO MEET MONTHLY OBLIGATIONS.

My guess is that your personal finanicial situation is simply not substantial enough to even make a dent.....

You may want to call Donner for help........he has a pretty substantial porfolio from what I understand.

FWIW...even Buffet and Gates combined are really not very material in the grand scheme of things.

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#6) On August 07, 2009 at 1:26 PM, prose976 (< 20) wrote:

Alstry, I truly believe that what we're dealing with here is a GLOBAL PROBLEM.  Every country (government) has obliged its citizens to every other country's government.  It's time to cancel some debts.

But these debts are kept on the books to justify the tax collecting that happens in various governments.  It keeps us peasants worried and occupied, under threat and feeling powerless.

The matrix you spoke of previously is real...I acknowledge that.  But you have to work within the Matrix if you are ever to change it.  Government, by nature, corrupts, because it is absolute in power, no matter what the Constitution says.  So let's agree that we concur in many aspects.  I just believe that actions speak much louder than words.

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#7) On August 07, 2009 at 1:45 PM, biotechmgr (34.09) wrote:

Really good analogy, good read.

I'm lnow ooking for a top mid - Aug to mid - Sept, so your 09.09 prophecy may turn out to be accurate.

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#8) On August 07, 2009 at 2:05 PM, alstry (36.32) wrote:

prose,

We have not hit 9.09.

I have pretty much said my peace.

We have about 50 days left.

Going forward I will substantially reduce my blogging as this post pretty much sums things up.

If by the end of September, MOAP never matierializes, Alstry will dematerialize into cyber ether.

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#9) On August 07, 2009 at 2:42 PM, wvillegas007 (< 20) wrote:

Great Job Alstry, 

Thanks for your admirable commitment to disseminate the truth about the status of our economy. You’re a true Patriot. Time will prove you right. Hopefully enough people will wake up to the lies the so called experts keep feeding us. Alstry, if we continue down this path, where do you see our contry in the next year or two?

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#10) On August 07, 2009 at 5:18 PM, JerseyShoreGirl (< 20) wrote:

I agree that there's a soon-to-be tipping point of some kind ... domestically or internationally.  But I have to admit, I'm a little bummed I'm missing out on this rally (been in cash) ... just trying to block out the daily noise and listen to my gut.  Have a good weekend all .. make it memorable!

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#11) On August 07, 2009 at 5:47 PM, jesusfreakinco (29.02) wrote:

JerseyShoreGirl - you are doing the right thing.  Time will tell.  Many of us have been caught off guard by the rally.  I guess the phrase don't fight the fed comes to mind.  The only difference is the Fed has a printing press and is doing everything it can to fool the masses into spending money it doesn't have and to fool us all (including the Chinese and other debtholders) into believing there won't be consequences.  There will be ramifications and we'll all be vindicated eventually.  Let's just hope your cash doesn't get devalued to nothing in the meanwhile - ala Zimbabwe or Weimar Germany.  I'd move your cash to some foreign currencies - take a look at Everbank if you can't afford to open a foreign account.

My two cents...

JFC

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#12) On August 07, 2009 at 5:50 PM, IIcx (< 20) wrote:

It's an interesting attorney who makes up terms like "Zombulator" and uses more punctuation then Derrida : )

Lawyers account for more jokes on file then chickens yet the coop "partnership" opens an entirely new category for fun.

If you're looking for a "directed verdict" from "Fools" your point is what?

Are you making a case for us or on behalf of a foreign government that fails to deliver the freedoms we enjoy?

Just Curious, IIcx 

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#13) On August 07, 2009 at 6:09 PM, IIcx (< 20) wrote:

your point is what!!!!!!!!!??????????????????????????????????????????????????????????????????????????????????????????...

sorry, no rec so far -- is all this about your score on the "Fool"? 

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#14) On August 07, 2009 at 6:12 PM, IIcx (< 20) wrote:

;P

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#15) On August 07, 2009 at 7:30 PM, alstry (36.32) wrote:

CALIFORNIA IS JUST THE BEGINNING

Darrell Steinberg, the state Senate's president pro tem, today said he will sue Gov. Arnold Schwarzenegger for abuse of executive power in his handling of the budget.

http://www.sacbee.com/

The problem right now is tax receipts are drying up so fast that government officials are scrambling to figure out how they can cover expenses....even after cutting expneses recently.

Even without factoring the pension liabilities, there is just no way to meet expense obligations without massive deficits or disruptions to our current economy.

It is very likely we are going to see a lot of anger and frustration between various government  entities.......how this plays out is anyone's guess as the stress level will only rise as current Zombulation policies destroy our nations infastructure.

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#16) On August 07, 2009 at 7:35 PM, VExplorer (29.71) wrote:

You know, I agree with you. America in troubles. But it isn't end. Organic way is here:

http://www.youtube.com/watch?v=NHETHsG0WVk

And it well a solution. Terrible? Not so. I was born in USSR. ;)

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#17) On August 07, 2009 at 7:40 PM, JerseyShoreGirl (< 20) wrote:

Thanks, jesusfreakinco for your insight!  Much appreciated!

I just heard Michael Savage say that Federal employees (not sure if State ee's apply) DO NOT PAY SOCIAL SECURITY!  I wish we could stop paying into that bankrupt ponzi scheme.  I think it will be very interesting to see how we're going to continue to pay the pensions for all of these retirees as tax revenue continues to dry up.  Atlas shrugs!

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#18) On August 07, 2009 at 7:59 PM, alstry (36.32) wrote:

At this point, the issue is freedom.  We hand over our children to fight wars for freedom.  If you loose your  job and have no propect of replacement employment, once you spend down your savings, you really have little freedom. 

The issue is what happens to freedom of government runs out of money.  If the police force is fired and criminals let out of prison without employment, do you think you will be free in the environment likely to follow?

If government runs out of money and it can't get financing, what demands will it make on its citizens.  Right now, government needs $6.5 trillion dollar per year.  About $80,000 per family to keep the current system operating.

When corporations are not making very much anymore, and the average family only earns between $40-$50K, and the average is so high because many of those families work for government, you know we have a very serious problem.

I am not sure how this will play out.  It is clear that things will slow dramatically going forward if we continue with the current Zombulation policies.  The longer we wait to restructure, the greater the permanent damage to the economy.

Without a doubt, what we are facing will likely be much more severe than The Great Depression when government was much smaller and running a surplus.

 

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#19) On August 07, 2009 at 8:11 PM, JerseyShoreGirl (< 20) wrote:

It's the weekend, so I'll digress a little ...

"Obama aims to overhaul the immigration jail system"

http://www.latimes.com/news/nationworld/nation/la-na-immig-detain7-2009aug07,0,6005358.story

Since when does Obama want to detain illegals?  He wants to legalize them so he has 30mm additional votes! 

These jails are for people who are vocal about what our govt is doing .. when things get bad!  Obama is not someone who will protect free speech, he would love to silence it .. just like he told Americans who don't agree with him to "shut up and get out of his way" ... the nerve!  In all of my 40+ years, I have never felt like my president was so arrogant .. and angry with America.

And by the way, since when does an American pres have 30+ CZARS .. these people only answer to him, have no accountability and didn't undergo any senate approval!  Get ready for Obama's brown shirts ... coming soon!

Friends, IMO, we are living through a soft communist revolution right before our eyes!  Don't kid yourself that history can't repeat itself!  There's definitely something big brewing out there!

Do you really think Putin was posing shirtless to impress his people?  Ah, no ... that was a world stage he was on! 

 Buckle up!

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#20) On August 07, 2009 at 8:33 PM, MoneyWorksforMe (< 20) wrote:

This guy is a comic, who is more anxious than my 85 yr old Italian grandmother...

The good news is, all of this anxiety tells me this market still has much further to go. 

 When the bears stop talking, the market has reached another apex. Until then I see all of this rhetoric as acting counter to your selfish agenda. 

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#21) On August 07, 2009 at 8:37 PM, MoneyWorksforMe (< 20) wrote:

JerseyShoreGirl you missed a 50% move in the stock market. It's safe to say you have no credibility--i.e. if I wish to lose money or miss opportunities I will listen to you.

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#22) On August 07, 2009 at 8:52 PM, awallejr (77.67) wrote:

Alstry isn't a comic, he is a buffoon. He was also predicting a DOW 5000 by end of summer. 

I can think of another reason you could use to argue why people are all broke, Alstry.  People listening to your prognostications over the last 5 months.  I am willing to wager that many have held back in investing in this bull run because of people like you who kept trying to scare them out.  Or others who, incorrectly kept calling this a bear market rally.  Generally a bear market rally is a 20pct retracement for 2-3 months.  Clearly we are well passed that point.  And yeah there will be an inevitable correction, and coincidentally it might happen in September, in which case you will be there shouting typhon, while the smart ones will be using it as a buying opportunity.

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#23) On August 07, 2009 at 9:44 PM, alstry (36.32) wrote:

awa,

Whether you like it or not, government is running out of money.  It can no longer afford to provide medicaid, medicare, welfare, social security, food stamps, and unemployment.  All funds coming for those services now are borrowed funds soon likely to be unavailable once government is cut off.

Cutting off the above services will destroy our health care system and gut many towns and businesses across the nation.

A very interesting problem is brewing....what happens to a nation when its people can't afford to feed its government and its government can't afford to feed its people.

Right now its letting prisoners out of jail who are used to getting fed......let's see what happens next.

Remember, government only needs about $4 Trillion....what is your net worth.....you think you can help or are you just a liability too?

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#24) On August 07, 2009 at 10:52 PM, alstry (36.32) wrote:

WHAT HAPPENS WHEN CITIZENS CAN'T FEED ITS GOVERNMENT?

Not only can't government feed its citizens.....will it be able to protect them? 

 TOLEDO, OH (WTOL) - The first round of Toledo police layoffs, in which 75 officers were let go, may already be having an effect on gun ownership.

ORLANDO...The firefighters union said it expected about 2,000 firefighters and police officers from around the state to picket the plan, which will lay off 342 firefighters, police officers and other employees starting Oct. 1 unless other revenue can be found.

PHILADELPHIA....Without the state's consent, Nutter said he would be forced to make $700 million in spending cuts in the next five years - cuts that would include the elimination of 3,000 city jobs, nearly a third of them in the Philadelphia Police department.

Waukegan city officials are considering laying off scores of workers, including up to 40 police officers and firefighters, because of a budget shortfall.

WNY....The layoff of 22 West New York police officers has been postponed until Sept. 14, according to a statement from Mayor Sal Vega.

 LANSING - About 100 Michigan State Police troopers will be laid off Sunday after a last-ditch effort to avoid the job loss failed.

CINCINNATI...City Manager Milton Dohoney proposes to lay off 138 members of the police department.

STOCKTON - City Manager Gordon Palmer will propose unprecedented cuts today to balance the city's teetering general fund, including laying off 43 police officers and greatly reducing community policing, a model that for more than a decade has put officers on routine assignment in some of the city's most dangerous areas. Report this comment
#25) On August 08, 2009 at 12:00 AM, prose976 (< 20) wrote:

This whole idea that we need all these police, which has incidentally turned this country into a nanny state, is exactly the kind of ballooning government mindset that got us where we are.

If you're advocating that it's some kind of emergency that these police are all really needed, I suggest you rethink this. Perhaps citizens need to get take back the power of governing themselves (for the people, by the poeple) buy guns to protect themselves and wake up from the false calm that they've become accustomed to knowing that our heroic police are just three buttons away (911).  It's alot less expensive and is much more conducive to freedom and liberty.

Same goes for all these other state and local governments that cannot meet their budgets.  Let the governments shrink for gosh sake.  But let's not forget about Washington.  It needs to shrink right along with all the other governments.

It sounds like you want the bloated government payrolls to continue Alstry.  Which ironically, is the exact opposite of what you're saying needs to happen to bring our deficits under control.

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#26) On August 08, 2009 at 12:21 AM, awallejr (77.67) wrote:

I think I've been more helpful in things I do than your "typhoon" spinning Alstry.  Just closed on a physical therapy lease, which should create about 20-30 jobs.  Did you even look at MPW when I sugested it in a blog to one of your threads?  Was in $6, closed today over $8. Health related reit, which is what the final "boomer bubble" will involve.

I am kind of curious what fields of law your practice involves.  Probably divorce law, because that is one field that can turn a sane man looney.

 

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#27) On August 08, 2009 at 12:39 AM, jddubya (< 20) wrote:

When I started practicing law, my law partner told me that the most important decision a man can make in his life, aside from picking his wife, is picking his business partner.

And you believed him?  Well he was wrong.  Just as you were wrong about the top at 8300, unemployment at 50% and just as you will be wrong about 555 by 9.09

But we won't have the 9.09 fiasco to put in your face, will we?

Going forward I will substantially reduce my blogging as this post pretty much sums things up.

Well?!?!?!?  I haven't seen any reduction.

If by the end of September, MOAP never matierializes, Alstry will dematerialize into cyber ether.

We can hope, but I fear that you will again twist the facts in your favor. 

You seem to ignore most others good questions... especially the questions about calls you've previously made that were horribly wrong.

You can't spell, but then neither can I.

You don't follow your own projections, otherwise you'd be hurtin' much more than most just from your April top call.

Based on these facts one can only conclude that you are, indeed _________________ (fill in the blank)

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#28) On August 08, 2009 at 12:41 AM, jddubya (< 20) wrote:

Oh and by the way, I actually live in Stockton... your one tiny snippet is a joke.  It's really not that bad here.  The city is actually thriving.

Well, at least not the bad on the North end.

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#29) On August 08, 2009 at 8:41 AM, alstry (36.32) wrote:

jd,

Just relax, read my next blog...it will be coming to the North end....you just need a little patience.

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#30) On August 09, 2009 at 7:19 PM, millionby24 (< 20) wrote:

#29


LOL obviously dude has an agenda.

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#31) On August 10, 2009 at 1:49 AM, LydiaVorst (< 20) wrote:

http://www.eyeblast.tv/public/eyeblast.swf?v=e4qG6UIr8z" />http://www.eyeblast.tv/public/eyeblast.swf?v=e4qG6UIr8z" allowfullscreen="true" width="518" height="419" />

alstry:" We have to join the military or offer up our children if deemed necessary."

What on earth is going on here? 

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#32) On August 10, 2009 at 1:52 AM, LydiaVorst (< 20) wrote:

sorry about that,! embedding failied, here is link to video...

 http://www.eyeblast.tv/public/checker.aspx?v=e4qG6UIr8z

 

 

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#33) On August 14, 2009 at 3:33 PM, skeptic86 (87.97) wrote:

in sept the fed stops buy treasuries

 

=/

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