December 28, 2012
President Obama and House Speaker John Boehner have come together to discuss the automatic tax hikes and spending cuts that is known as the fiscal cliff.
Regardless of how many times these two meet, there is no resolution that would mitigate the damaging effects the fiscal cliff will have on our monetary future.
The possibility of raising the debt ceiling is looming as a new Congress reconvenes in January. Keeping the US government well-funded will require specific legislation to avert a financial disaster.
Political posturing from the Democrats is being blamed as partially effecting the talk’s resolution. The theater of the American duopoly convinces the citizens that those in charge are bantering back and forth to no avail while the reality of the financial destruction of the US becomes an inevitable fact.
Trillions of dollars are at stake in this “grand bargaining”. A Congressional Plan B has not been approved which has triggered a response from the US Treasury Department to recommend “extraordinary measures” to ensure that the US government has funds to keep it afloat.
Timothy Geithner, Secretary of Treasury warned “that the statutory debt limit will be reached on December 31, 2012” and that without “taking certain extraordinary measures authorized by law to temporarily postpone the date that the United States would otherwise default on its legal obligations.”
In Geithner’s mind a $200 billion extension of the debt ceiling would suffice for a start and “given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures.”
The expectation that the 2013 tax season will be delayed because of the lack of resolution between Obama and Boehner leaves “unresolved policy questions [about] the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures.”
By refocusing attention to the debt limit, Geithner could:
• Suspend state and federal spending
• Suspend investments into “entitlement” programs
• Suspend venture into Government Securities Investment Fund
• Suspend investment into the Exchange Stabilization Fund
Retiring House Representative Steve LaTourete explains: “Nobody is willing to pull the trigger” on an agreement because “everybody wants to play the blame game. This blame game is about to put us over the edge.”
According to Boehner’s statement on this fiscal cliff: “If the Senate will not approve and send them to the president to be signed into law in their current form, they must be amended and returned to the House. Once this has occurred, the House will then consider whether to accept the bills as amended, or to send them back to the Senate with additional amendments. The House will take this action on whatever the Senate can pass, but the Senate first must act.”
Part of the Obama strategy involved backing Congress into a corner that will force our elected leaders to vote for the deal that he offers to avert falling over the fiscal cliff. In a more expanded sense, the US national debt has risen to the point of becoming a non-issue compared to these new developments.
A senior official travelling with Obama told the mainstream media: “If you think about the possibility of Congress failing to act to avert the fiscal cliff, combined with the abomination of what occurred in the summer of 2011, hits to our economy aren’t coming from external factors, they’re coming from congressional stupidity.”
Christine Lagarde, chief of the International Monetary Fund (IMF) has warned that taxes must be raised in the US or economic “confidence” will be lost. Lagarde stated that: “The best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means raising tax or creating new sources of revenue, and cutting spending as well.”
Pushing the issue of taxing all Americans temporarily down the road “is not enough”. Lagarde wants to see the middle class of America eradicated through taxes. And the next income bracket to be attacked financially is the lower class of wealthy in the US. She cautions that global investors, entrepreneurs and corporations are weary of financing America to “preserve economic confidence.”
In October the IMF stated its role in the global economy at an annual meeting in Tokyo with technocrats and government finance representatives. Governance over the world’s wealth is subtle pressure policies that need to change hands from sovereign nations to the IMF. If this does not happen, Lagarde claims that foreign investors will not contribute to the world’s debts. As long as money stays in under the control of individual countries, the fiscal cliff being discussed in America will extend to the global markets.
While the sheeple are distracted by the fiscal cliff, the Federal Reserve and the US Treasury are inflating a dollar bubble that is expected to pop and take down the US financial system with it.
The foundation of this bubble was created by the derivatives debacle created by the technocrats, as well as planned implosion tactics by JP Morgan & Chase Co., Bank of America (BoA), Citibank and Goldman Sachs, 95% of the $230 trillion in US derivatives exposure was founded in the US.
Mega banks like BoA and Citibank rerouted customer funds into loans to other financial institutions, corporations and also purchased US Treasury bonds. Depository monies held in Goldman Sachs were used to bet against and for interest rates, fiat currency exchange rates, mortgages and prices of commodities and equities.
According to the US Treasury, China and Japan have become major foreign investors in the US; even as their holding currently is substantial, they have surpassed this marker.
These new purchases are bypassing Wall Street’s acquisition. In essence, the People’s Bank of China is directly dealing with the US Treasury to increase its $1.17 trillion in current holdings of US Treasury bonds.
The US Treasury has given the PBC a direct computer link to its auction system so that China can instantly participate in those auctions without placing bids with primary dealers – cutting out the middle man.
Matt Anderson, a Treasury Department spokesman said: “Direct bidding is open to a wide range of investors, but as a matter of general policy we do not comment on individual bidders.”
After the US Treasury found that China was concealing their debt purchases through special deals with primary dealers, changes in the Treasury’s rules restricted these deals. China has been given direct bidder status. This change is purported to have limited China’s access to the private network connection system.