Use access key #2 to skip to page content.

alstry (< 20)

We Are All Broke.....and about to find out.



January 17, 2010 – Comments (16)

In The Great was primarily the banks that were leveraged.  Government, Business, and Families generally had little or no leverage.

Today, it is just the opposite.....Gvernment, Business, and Families are very leveraged and unlike The Great Depression when the banks held the paper, that paper has been distributed to our Pension Funds, Insurance Companies, Retirement Accounts, Community plus Regional Banks, and Mutual Funds.  

Many of the "money center" banks have sold off much of their toxic nonsense to you or your retirement managers.  The joke upon a joke is the only reason that this game has been allowed to go on so long is because the banks made even more money insuring that toxic junk with Credit Default Swaps permitting even more toxic debt to be sold throughout the system.

It got to the point where Wall Street never cared if the loan could ever be paid back because more money was made selling swaps than the principal balance on the loan.  Your pension funds were being bribed with hundreds of millions of dollars to take the stuff.

The sad part was if you were a private business competing against a swap funded public business, they could operate at a loss forever even though you had better operations.... and you forced out of business because you couldn't produce at a loss indefinitely effectively destroying America's real economy.

At this point, M2, savings, is less than $10 billion dollars and total debt exceeds $50 Trillion.  It is mathematically impossible to pay down debt with current savings.....and there is no technology in the world that can generate anything close to the requisite outside revenues to bridge the gap.

States have become so desperate to make debt payments that they are selling off state buildings providing only a very short term and short sighted solution.  Taxes are being raised as well against a population with declining incomes and rising cost of living.  Businesses are shutting down without notice when lines of credit are being cut off.  Families....foreclosures and job losses tell the story very well.

The insane part is the faster we take our savings to pay down debt, the lower our capital base which will inhibit any future growth.  Paying down debt in the current environment is mathematically impossible and the faster we try the slower our economy will get.

This is not a is a mathematical certainty based on current Zombulation policies.

The interesting part will be when America finally wakes up one morning and learns practically its entire savings and retirement was simply levered upon leverage and much of the value as perceived was simply illusory....not much different than a Ponzi scheme.

And it is not just is most of the World.

Remember.....when your government is are broke too because they can essentially tax and take everything you have to maintain soverignty.....that is the law whether you like it or not.


16 Comments – Post Your Own

#1) On January 17, 2010 at 12:42 PM, Teacherman1 (< 20) wrote:

I'm sorry to hear you are broke Alstry. Do you need a loan?

Hope you enjoyed ice skating with your kids and didn't break anything vital.

Have a great Sunday.

Report this comment
#2) On January 17, 2010 at 2:29 PM, alstry (< 20) wrote:

Thanks for the offer...but I am OK for today. 

Teacher...we are all is just that you don't realize that yet even at your advanced age....but I promise if you simply live a few more will understand.

You and others think money is actually a store of wealth...but in reality and legally, it is simply a note.....a promise to pay.  As a matter of fact, all money in existence is simply evidence of some sort of debt or another.

There was a reason why Warren Buffett called Credit Default Swaps weapons of mass you will feel the effect .......and potentially the only choice for our President will be to generate a war in scope and magnitude the world has never seen.

When your government is out of are out of money.  Whey your government goes to go to war.

Report this comment
#3) On January 17, 2010 at 3:04 PM, alstry (< 20) wrote:


Haiti's earthquake dashed hopes for economic revival that had been building credibility among aid workers and businessmen days before the temblor hit. See continuing coverage »

You simply can't build an economy on debt forever.....and when credit is cut off...the time to pretend is near an end.

Tomorrow is Martin Luther King's birthday.....a man of peace.  We currently have a President who just won the Nobel Peace Prize.  It might be just the perfect day to start WW3.....

Iraq, Afghan Wars Costs Top $1 Trillion

US Drone Strike on Pakistani House Kills 20

Zardari: Halt Drone Strikes to Win Over Pakistanis

Elite US Troops Ready to Combat Pakistani Nuclear Hijacks

US Goal Unmet: Afghan Civilian Casualties Soar

Russian Diplomat: No Agreement on Iran Sanctions

Somalia Clashes Kill 138, Displace 63,000 in Two Weeks

Can you imagine the arrogance of American retirees who think they will be able to continue collecting payments from bankrupt pensions on the backs of a nation who is now broke?????




Report this comment
#4) On January 17, 2010 at 3:55 PM, alstry (< 20) wrote:

YUP....Much closer now.....

Venezuela will expropriate stores from Almacenes Exito SA, Colombia’s biggest publicly traded retailer, for alleged violations of the law, President Hugo Chavez said.

Venezuela's devaluation of its currency will further complicate its troubled commercial relationship with neighboring Colombia, where the economy is already suffering from a breakdown in cross-border trade.

Report this comment
#5) On January 18, 2010 at 1:48 AM, Rasbold (85.98) wrote:

M2 = 10bln??

Is that just the savings part or does that include the cd's, money market and M1?

If just savings, where can I find that break-out?

Report this comment
#6) On January 18, 2010 at 9:27 AM, Teacherman1 (< 20) wrote:

A few more months. Dang Alstry, I was really counting on a few more years.

I guess being broke is relative. There are very few things that are really necessary for life. If you live your life keeping the cost of those things to a minimum, it doesn't take much to not be broke.

The Govt has been broke almost from its inception. That's why it spends my money.

I guess since I am quite certain that this whole world will someday come to an end, and I know where I am going when it does, exactly how and when that happens is not my major concern.

Live your life for today as best you can and make sure you have a "reservation" for the coming trip, then you won't get caught by surprise when those (as someone on CAPS expressed it "1st century superstitions", but which I think of as "eternal truths") do occur.

There will be periods of turmoil and hardship, as there always have been, but I would hate to live my life cowering in fear because of what might happen along the way.

Have a nice day. 

Report this comment
#7) On January 18, 2010 at 9:41 AM, alstry (< 20) wrote:

If you know where you are going......that is wonderful.  But right now churches are shutting down because  they are running out of money.

Who is living in sit back and let your countrymen get raped and say nothing.  Just like the person who kept walking before the Good Samaritan walked by.

It is long as you know where you are going.....just like the Publican and Pharicy.....please excuse my spelling.

Report this comment
#8) On January 18, 2010 at 10:36 AM, Teacherman1 (< 20) wrote:

Churches are buildings, they really don't have a lot to do with actual faith, but do provide a place for those of like mind to meet, share, and get comfort. Maybe if more shut down, more members would actually join the true church, which is The Body of Christ.

I did not mean to imply that you were living in fear, I simply meant that if one were to subscribe whole heartedly to your posts, than fear would be the natural consequences.

As for what is happening with my fellow countrymen (as well as others who live further away), I prefer to actually do something rather than just talk about it.

Sorry I am not posting gloom and doom, but I am busy stopping by the side of the road and actually doing something. I don't need to post about what those things are, but simply do them. That is of much more benefit.

Unlike the Publican and Pharisee, my hope is not what I do, but is based on what was already done a couple of thousand years ago. By Faith, not by works. It is impossible to lead a life that is good enough, or do enough "good works" to get to where I know I am going. 

If you try to do it that way, just one small slip would undo a lifetime of good works. As stated in the most important "Book" ever penned by man under the guidance of the Holy Spirit, "Sin is the wages of death", note, not sins, but sin. That simply means the only way you can earn your way is by being in the perfect will of God at all times. There is only one who could do that, and that is why HIS lovingly sacrificial death was the only way for my debt to be paid in full.

I will not post further on this topic, because this is, after all, an investment forum, but wanted to clear the misunderstanding you seem to have about me.

There is nothing wrong with your wanting to bring things to the attention of others about the negative things going on in the world, but I just can not help but believe you would be much more productive in this effort if you were a little less extreme and a little less strident.

Have a great week.

Report this comment
#9) On January 18, 2010 at 10:55 AM, IIcx (< 20) wrote:

I think your numbers for savings are low -- s/b 360+ Billion?

US National Debt Clock 

Report this comment
#10) On January 18, 2010 at 12:31 PM, miteycasey (29.02) wrote:

I'd still rather be here than Haiti.

Report this comment
#11) On January 18, 2010 at 12:54 PM, mawnck (< 20) wrote:

Toad the Wet Sprocket

Report this comment
#12) On January 18, 2010 at 1:26 PM, UKIAHED (32.13) wrote:

At this point, M2, savings, is less than $10 billion dollars

No - not even close.  M-2 is 8.4 Trillion.  It has been on the rise for the last 2 years...

For those not familiar:

M1: M1 includes funds that are readily accessible for spending. M1 consists of: (1) currency outside Federal Reserve Banks, and the vaults of depository institutions; (2) traveler's checks of nonbank issuers; (3) demand deposits; and (4) other checkable deposits (OCDs), which consist primarily of negotiable order of withdrawal (NOW) accounts at depository institutions and credit union share draft accounts. [12] Bank reserves are not included in M1. M2: Equals M1 + savings deposits, time deposits less than $100,000 and money market deposit accounts for individuals. M2 represents money and "close substitutes" for money.[13] M2 is a broader classification of money than M1. Economists use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions. M2 is a key economic indicator used to forecast inflation.[14]


Report this comment
#13) On January 18, 2010 at 2:01 PM, IIcx (< 20) wrote:

I'm finding that many of the books from the '70's and '80's that focused on Limits to Growth, the global reach of multinational corporations, and the dangers of centralized financial structures are becoming accutely relevant.

Most if not all pointed to the true cause of the problems yet we now need to clean it up with the few left who have an attention span longer then a gnat's.

The key factors were and are today massive: near complete lack of social values, a turbulent world devoid of leadership, greed and inefficiency in energy, burdensome debt, an aging population, economic growth based on killing innovation, a social legacy of distrust, no end to crimes that aren't addressed in the home, rising disease, and the deterioration of the environment.

The 101 biology experiment in HS using bacteria in a petri agar explains the story.

"We will Overcome"...Happy MLK Day.

Best, IIcx 

PS. Please pitch some positives if you're able to and realize there are those of us who will never be "Broke".

Report this comment
#14) On January 18, 2010 at 2:06 PM, ozzfan1317 (71.35) wrote:

All Hail the glory toad

Report this comment
#15) On January 18, 2010 at 2:31 PM, IIcx (< 20) wrote:

perhaps the "Toad" has been in the "Swamp Gas" too long or have we?

Report this comment
#16) On January 18, 2010 at 9:05 PM, alstry (< 20) wrote:

Uki...I meant trillion...but thanks for the debt is now about $55 Trillion maintaining the fact that it is still impossible to repay.

Report this comment

Featured Broker Partners