Friday, December 3, 2021

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Jumpstart your pancreas: New research shows how to reverse type-2 diabetes with a low calorie diet

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by Frances Bloomfield, Natural News:

Type-2 diabetes has long been thought of as a progressive and incurable disease. Yet as new research shows, this preventable condition can be reversed with some major dietary changes. According to researchers from Newcastle University in the U.K., an eight-week diet consisting of 600 calories a day is the ticket to overturning type-2 diabetes.

This promising finding is the result of Professor Roy Taylor’s efforts. Taylor, who has spent nearly four decades studying type-2 diabetes. His colleagues stated that type-2 diabetes is caused by excess fat in the liver and pancreas. This added weight makes the two body organs perform their functions poorly. A liver with excessive fat will respond badly to insulin and produce too much glucose, and will simultaneously increase the export of fat to the body’s various tissues. Once the excess fat has been passed on to the pancreas, it causes insulin-producing cells to break down, then leading to type-1 diabetes.

However, the team found that removing little more than a gram of fat from the pancreas can resume proper insulin production, thus reversing the disease.

As Taylor explained to the DailyMail.co.uk: “Work in the lab has shown that the excess fat in the insulin producing cell causes loss of specialized function. The cells go into a survival mode, merely existing and not contributing to whole body well-being, but removal of the excess fat allows resumption of the specialized function of producing insulin.”

Such was the case for the researchers, who conducted their study on 11 people who developed type-2 diabetes later in life. These 11 people were placed on an extreme 600-calorie diet composed of non-starchy vegetables and liquid diet drinks for eight weeks.

The positive effects of the diet began to show just within a week of the diet, specifically, that insulin sensitivity fell by a significant margin and that blood sugar levels dropped and stabilized. Even more astonishing is that seven of the 11 patients were found to be free of diabetes, and remained diabetes-free after resuming their regular diets. (Related: Type 2 diabetes diet: What to eat, what to avoid and how to get healthier with every meal.)

“The good news for people with type-2 diabetes is that our work shows that even if you have had the condition for 10 years, you are likely to be able to reverse it by moving that all important tiny amount of fat out of the pancreas. At present, this can only be done through substantial weight loss,” said Taylor. “I think the real importance of this work is for the patients themselves.”

The Newcastle Diet

Taylor’s diet program has since become known as the Newcastle Diet. As was previously mentioned, the diet involved subsisting almost entirely on liquid diet drinks (in this case, liquid meal replacement formula from OPTIFAST ), and three portions of non-starchy vegetables like broccolicucumber, mushrooms, and zucchiniAccording to EveryDiet.org, the dieters were allowed to season their vegetables with herbs and spices but were not permitted to use salt. Foods like poultry, eggs, fish, starchy vegetables, legumes, and dairy products are strictly forbidden in the Newcastle Diet.

In addition to helping the participants recover from type-2 diabetes, the other benefits of this diet ranged from improvements in blood glucose control to better well-being and weight loss. However, since the Newcastle Diet heavily limits your food choices, those undergoing this diet can experience nutrient deficiencies. The participants also reported feeling dizziness, hunger, and fatigue during the start of the program, though these sensations ebbed several days after.

As such, anyone who plans on attempting the Newcastle Diet should only do so under medical supervision.

Read More @ NaturalNews.com

An Economic Lesson for China and Russia

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by Paul Craig Roberts, Paul Craig Roberts:

Is there anyone in Trump’s government who is not an imbecile?

After years of endless military threats against Russia—remember CIA deputy director Mike Morell saying on TV (Charlie Rose show) that the US should start killing Russians to give them a message, and Army Chief of Staff Mark Milley threatening “We’ll beat you harder than you have ever been beaten before”—now the US Treasury Secretary Steven Mnuchin threatens China. If China doesn’t abide by Washington’s new sanctions on North Korea, Mnuchin said the US “will put additional sanctions on them [China] and prevent them from accessing the US and international dollar system.”
https://www.rt.com/usa/403118-usa-china-sanctions-north-korea/

Here is the broke US government $20 trillion in public debt, having to print money with which to buy its own bonds, threatening the second largest economy in the world, an economy on purchasing power parity terms that is larger than the US economy.

Take a moment to think about Mnuchin’s threat to China. How many US firms are located in China? It is not only Apple and Nike. Would sanctions on China mean that the US firms could not sell their Chinese made products in the US or anywhere outside China? Do you think the global US corporations would stand for this?

What if China responded by nationalizing all US factories and all Western owned banks in China and Hong Kong?

Mnuchin is like the imbecile Nikki Haley. He doesn’t know who he is threatening.

Consider Mnuchin’s threat to exclude China from the international dollar system. Nothing could do more harm to the US and more good to China. A huge amount of economic transactions would simply exit the dollar system, reducing its scope and importance. Most importantly, it would finally dawn on the Chinese and Russian governments that being a part of the dollar system is a massive liability with no benefits. Russia and China should years ago have created their own system. Being part of Washington’s system simply lets Washington make threats and impose sanctions.

The reason Russia and China are blind to this is that they foolishly sent students to the US to study economics. These students returned completely brainwashed with neoliberal economics, “junk economics” in Michael Hudson’s term. This American economics makes Russian and Chinese economists de facto American stooges. They support policies that serve Washington instead of their own countries.

Read More @ PaulCraigroberts.org

Catalonia’s Defiance of Spanish Authority Turns into Rebellion

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by Don Quijones, Wolf Street:

“Do not underestimate the power of Spanish democracy.”

With these words, eerily reminiscent of a line once spoken by Star Wars villain Darth Vader, Spain’s Prime Minister Mariano Rajoy brought to a close a week of frenzied drama. It began with a foiled attempt by the Spanish police to close down the official website for the Catalan independence referendum. As often happens with web-based raids, the official site was up and running again within minutes, albeit with a different domain name.

Next, the Public Prosecutor’s office ruled that the referendum is now illegal “beyond all doubt” and instructed the Civil Guard, National Police, Catalan Police (Mossos d’Esquadra) and local police forces to act to stop it. It also launched criminal investigations against the entire Catalan government, the Speaker of the Catalan Parliament, the leaders of two separatist municipal associations and more than 700 Catalan mayors (representing 75{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of Catalonia’s municipalities) for agreeing to cooperate with the planned plebiscite.

On Friday, Spain’s Finance Ministry joined the fracas by introducing a motion that would hand Madrid much greater control over how Catalonia spends its money in an effort to block the regional government from using state cash to pay for an illegal independence referendum. It has also frozen Catalonia’s monthly advance of the national liquidity fund (FLA), worth some €1.4 billion a month, and demanded that banks report any transactions related to the referendum vote to the central government.

The ultimate goal is to turn the Catalan regional government into an empty shell of an institution — one that has no autonomy, or for that matter any practical function or purpose.

Starving Catalonia’s regional government of funds could well make the vote logistically impossible, but the policy is not without its risks. As we warned a few months ago, if the Catalan government feels that it’s backed into a corner financially, it could weaponize its tick-tocking debt bomb. If Barcelona refuses to honor its debt to Madrid, both Catalan and Spanish debt could be declared in default, with disastrous consequences for both.

While such an outcome is still highly unlikely, especially given the potential scale of the fallout, there are no signs as yet that either side of this conflict is prepared to back down.

But how did relations between Spain and its richest province plumb such depths? How did Catalonia, a region that enjoys levels of autonomy in education, health care and public policing that would be the envy of many other parts of Europe, particularly those across the border in France, end up embracing a cause that would put it in direct confrontation with Spain’s central state?

While many of Catalonia’s grievances date back decades, and in some cases centuries, the latest explosion of separatist fervor is relatively recent. In 2007 just 14{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the Catalan population supported independence, according to the regional government’s own stats. By 2013 the number had more than tripled, to 48{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

What happened in such a short time to spark such a sea change in collective thinking? A large part of the answer can be found in the following three developments.

1. The Financial Crisis.

When Spain’s gargantuan property boom began crashing in 2009, prompting the domino-like fall of the country’s savings banks, the inevitable result was a massive contraction in the economy that laid waste to millions of jobs. By 2012 unemployment in Catalonia had hit 19{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} while in Spain as a whole it was a staggering 26{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

As public anger in Catalonia rose, so, too, did support for the separatist cause. In what was largely a calculated move to divert attention and blame away from its mismanagement of the local economy, unpopular cuts in public spending, and political scandals, the region’s governing party, Convergencia, hitched its wagon to the rising movement.

The Spanish government hardly helped matters by repeatedly reducing the amount of public investment in Catalonia, which merely fuelled Catalans’ sense of economic injustice. Catalonia contributes nearly a fifth of Spain’s gross domestic product, yet the region receives just 9.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of Spain’s national budget. Even in the last couple of years, after repeated promises from Madrid that it will inject more funds, the total investment has continued to fall.

2. The Still Birth of Catalonia’s New Statute of Autonomy.

As with all of Spain’s autonomous communities, Catalonia’s regional government holds sway in certain areas of culture, education, health, justice, environment, communications, transportation, commerce and public safety. It also has its own police force, the Mossos d’Esquadra, though the Spanish government keeps agents in the region for issues relating to border control, terrorism and immigration.

However, Catalonia has virtually no say in fiscal matters, unlike Spain’s other separatist region, the Basque Country. That was all supposed to have changed with the new Statute of Autonomy signed in 2006 by the Catalan executive and Rajoy’s predecessor in government, José Luis Zapatero.

But the agreement was not to last. In 2010 Spain’s highly politicized Supreme Court, at the urging of the People’s Party, annulled many of the articles of the already diluted Statute, effectively stripping the agreement of any meaning and giving Catalonia’s independence movement its biggest boost in decades. When the decision was made, three of the twelve members of the Court had already finished their terms while a fourth member had died and not been replaced. Nonetheless, the ruling still stood.

As Rajoy says, “do not underestimate the power of Spanish democracy.”

3. A Full-Frontal Attack on the Catalan Language.

In Catalan culture one thing is more sacred than any other: the region’s language, which was ruthlessly banned from public and official use during the Franco dictatorship. But that didn’t stop the governing People’s Party from using its absolute majority to bulldoze into law a deeply unpopular education bill that, among other things, sought to introduce a trilingual model (Spanish, Catalan and English) in schools that would de facto suspend the current Catalan immersion system. The Catalan executive refused to comply with the law.

It was its first major act of open defiance.

Read More @ WolfStreet.com

Solutions: Stop Using YouTube

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from CorbettReport:

Spain Cracks Down on Catalan Independence Movement

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by Elizabeth Vos, Disobedient Media:

Over the last few weeks, the Catalan independence movement has provoked escalating and severe reactions from Spanish authorities. Reuters reports that The Constitutional Court has suspended the referendum after a legal challenge by Prime Minister Mariano Rajoy and that police have since searched newspaper offices and printers for signs of any preparation for the referendum, even going so far as to scour the area for ballot boxes in an attempt to quell the upcoming vote.

Assange and Wikileaks have both commented numerous times over the last few days on massive public support for the Catalan independence movement, as well as blatant attempts by the Spanish government to suppress a successful vote in favor of independence. The effects of the independence movement on Spain’s membership in the EU remains to be seen. At the time of publication, EU member states appear remarkably quiet on the matter. That a member of the European Union could brazenly restrict the operation of free press and treat its citizens in such an authoritarian manner without consequence is deeply troubling.

The BBC reported that Spain’s public prosecutor had summoned more than 700 Catalan mayors to appear for questioning over their support for a banned independence referendum. Despite these increasing attempts to suppress the vote, one million protestors recently took to the streets of Barcelona in support of Catalan independence.

Meanwhile, Wikileaks founder Julian Assange has repeatedly expressed his stance on the Catalonian independence via Twitter, questioning the Spanish government for its suppression of the media and its attempts to prevent the referendum taking place.

The Catalan independence movement is not only significant domestically for Spain, but also for implications it may have on the European Union. It was compared by a University of Geneva study to the Scottish independence referendum.

Wikileaks Tweeted that the Spanish state had claimed it would overpower Catalonia’s government by seizing control of its finances in attempt to stop vote. Further, Wikileaks remarked that the Spanish Ministry of the Interior had bragged about military police having seized “how to vote” posters. The latest escalations in Spain’s suppression of the independence movement come as the University of Geneva published a study on “Catalonia’s legitimate right to decide.” The summary of the document states in part that:

“These efforts build upon Catalonia’s previous attempts to consolidate representative governance for Catalan citizens within and conjointly with the Spanish democratic state. Four internationally recognized experts were invited by the Government of Catalonia to examine the controversy generated by the call for a self-determination referendum. This has been convened in the face of the opposition of the Spanish authorities which contest its legality, unlike the recent examples of the trend towards the recognition of self-determination, of which the most salient is that of Scotland’s referendum on independence…”

Read More @ DisobedientMedia.com

Keiser Report: ‘Big Data’ Leaks (E1124)

from RT:

Max interviews James Howard Kunstler of Kunstler.com about the hot mess of US climate change policy and infrastructure spend.

Venezuela Has Officially Abandoned The Petrodollar – Does This Make War With Venezuela More Likely?

by Michael Snyder, The Economic Collapse Blog:

Venezuela is the 11th largest oil producing country in the entire world, and it has just announced that it is going to stop using the petrodollar.  Most Americans don’t even know what the petrodollar is, but for those of you that do understand what I am talking about, this should send a chill up your spine.  The petrodollar is one of the key pillars of the global financial system, and it allows us to live a far higher standard of living than we actually deserve.  The dominance of the petrodollar has been very jealously guarded by our government in the past, and that is why many are now concerned that this move by Venezuela could potentially lead us to war.

I don’t know why this isn’t headline news all over the country, but it should be.  One of the few major media outlets that is reporting on this is the Wall Street Journal

The government of this oil-rich but struggling country, looking for ways to circumvent U.S. sanctions, is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy have told The Wall Street Journal.

Before we go any further, we should discuss what we mean by the “petrodollar” for those that are not familiar with the concept.  The following comes from an excellent article by Christopher Doran

In a nutshell, any country that wants to purchase oil from an oil producing country has to do so in U.S. dollars. This is a long standing agreement within all oil exporting nations, aka OPEC, the Organization of Petroleum Exporting Countries. The UK for example, cannot simply buy oil from Saudi Arabia by exchanging British pounds. Instead, the UK must exchange its pounds for U.S. dollars. The major exception at present is, of course, Iran.

This means that every country in the world that imports oil—which is the vast majority of the world’s nations—has to have immense quantities of dollars in reserve.

As will be explained below, the fact that virtually everyone around the world has to use our currency to buy oil is a massive advantage for us.  Venezuela knows this, and so in response to new sanctions being imposed upon them, they are hitting us where it hurts

Oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros.

The state oil company Petróleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner.

The new payment policy hasn’t been publicly announced, but Vice President Tareck El Aissami, who has been blacklisted by the U.S., said Friday, “To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar.”

If more nations start to follow suit, it would be absolutely disastrous for the United States.

In other articles, I have detailed why the petrodollar is so incredibly important to our economy and our financial system.  The following is an extended excerpt from one of those previous articles

So why is the petrodollar so important?

Well, it creates a tremendous amount of demand for the U.S. dollar all over the globe.  Since everyone has needed it to trade with one another, that has created an endless global appetite for the currency.  That has kept the value of the dollar artificially high, and it has enabled us to import trillions of dollars of super cheap products from other countries.  If other nations stopped using the dollar to trade with one another, the value of the dollar would plummet dramatically and we would have to pay much, much more for the trinkets that we buy at the dollar store and Wal-Mart.

In addition, since the U.S. dollar is essentially the de facto global currency, this has also increased demand for our debt.  Major exporting nations such as China and Saudi Arabia end up with giant piles of our dollars.  Instead of just letting them sit there and do nothing, those nations often reinvest their dollars into securities that can rapidly be changed back into dollars if needed.  One of the most popular ways to do this has been to invest those dollars in U.S. Treasuries.  This has driven down interest rates on U.S. debt over the years and has enabled the U.S. government to borrow trillions upon trillions of dollars for next to nothing.

But if the rest of the world starts moving away from the U.S. dollar, all of this could change.

History has shown that when the status of the petrodollar is threatened, the U.S. is swift to take action.

And it is very interesting to note that President Trump will be meeting with Latin American leaders next week, and the main topic for discussion will be “the Venezuela crisis”

U.S. President Donald Trump has invited three Latin American leaders to dine with him next week in New York as he seeks to address the Venezuela crisis and build bridges with the region after an acrimonious start with neighbor Mexico.

The political and economic turmoil in Venezuela, source of 10 percent of the oil consumed by the United States, will almost certainly top the agenda when he receives the center-right presidents of Peru, Colombia and Brazil at Trump Tower on Monday evening, diplomats said.

Could this latest move by Venezuela be enough to potentially spark a military conflict?

The guys over at Zero Hedge seem to think so…

Having threatened China today with exclusion from SWIFT, we suspect Washington is rapidly running out of any great ally to sustain the petrodollar-driven hegemony (and implicitly its war machine). Cue the calls for a Venezuelan invasion in 3…2..1…!

It would be absolutely no surprise at all if John McCain and Lindsey Graham start appearing on the major news networks calling for war with Venezuela, but hopefully President Trump will not listen to such nonsense.

Read More @ TheEconomiccollapseBlog.com

Peter Schiff – Mother of All Financial Cyclones About to Make Landfall

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by Kerry Lutz, Financial Survival Network:

Peter Schiff joined us to discuss the latest developments in the economic landscape. Contrary to MSM opinion, the crash of 2008 was only a precursor to what’s coming next. And unlike Hurricanes Harvey and Irma, there’s no hiding from it. When it hits, not if, the devastation to the financial system will be the equivalent of a Cat 5 making a direct hit on Wall Street. Time to prepare now before it’s too late. Gold, silver but not Bitcoin as it’s not worth the paper it’s not printed on.

click HERE to listen.

Read More @ FinancialSurvivalNetwork.com

Watch Someone Explain Why Bitcoin Is More Legit Than the Dollar in One Minute

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by Josie Wales, The Anti Media:

Business mogul and Bitcoin enthusiast John McAfee appeared on CNBC Fast Money this week to respond to J.P. Morgan CEO Jamie Dimon’s claims that Bitcoin is “a fraud,” and he managed to shut down Dimon’s allegations in just over one minute.

“I would like to say this, Mr. Dimon: I respect you, sir, for your position. People who rise to your position are not idiots,” McAfee began. “However, sir…you called Bitcoin ‘a fraud.’ I’m a Bitcoin miner. We create Bitcoins. It costs over one thousand dollars per coin to create a Bitcoin. What does it cost to create a U.S. dollar? Which one is the fraud? Because [the dollar] costs whatever the paper costs, but it costs me and other miners over a thousand dollars per coin – it’s called ‘proof of work.’”

McAfee then went on to explain the amount of computing power and electricity that goes into creating the digital currency. “Surely there’s some value in the work that we did to create the coin,” he said, also pointing out that Bitcoin’s fluctuating value is nothing to sound the alarm over. “The fact that Bitcoin is consistently growing in its use and its value has to say something. You know, sure it will rise and fall and it is highly volatile, as all new technologies are. At the same time, it is certainly not a fraud,” he said.

When Fast Money’s host asked him about his infamous Twitter bet that Bitcoin will surpass $500,000 in three years, McAfee simply replied, “Oh, I don’t lose bets.”

Read More @ TheAntiMedia.com

Repeal the Debt Ceiling?

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by Alfred Adask, via The International Forecaster:

..if the day ever comes when government can’t even repay the interest on the National Debt, the illusion of solvency will disappear and the economy will collapse into calamity.

The “debt ceiling” is the maximum amount of debt that can be incurred by the U.S. government.  Congress periodically authorizes a higher debt ceiling to allow government to go legally deeper into debt.  

The problem with the debt ceiling is that lots of American conservatives don’t want government to go deeper into debt.  Politicians are therefore forced to seemingly oppose each additional debt ceiling increase or risk being voted out of office.  

Result?  Each debt ceiling cycle is controversial and politically explosive.  If Congress fails to raise the debt ceiling, government can’t borrow the currency it needs to pay its bills and/or “service” (pay the interest on) the National Debt.  Failing to raise the debt ceiling would force the government to either admit that it’s unable to repay its debts and bankrupt-or, government would have to raise taxes dramatically.  If government admitted it was bankrupt, the U.S. and even global economies could collapse.  If government had to raise taxes, there’d be a political uproar.  In either case, incumbent politicians would risk being voted out of office and forced go back to working for a living.  (The horror!)

     Given the dire consequences following a failure to raise the debt ceiling, you can bet that the debt ceiling will be raised-at least for a little longer.   

     Given that raising the debt ceiling is almost inevitable, you might suppose that that the political process would be simple and painless. You’d be wrong.  

     Although there’s little doubt that the debt ceiling must be raised, that increase will raise two political questions:  

     First, when shall the debt ceiling be raised?  

     Congress never wants to raise the debt ceiling during an election year since doing so is sure to antagonize voters and cause some incumbents to be voted out of office. That’s why the debt ceiling increase that should’ve taken place in 2016 was postponed until September 29th of 2017.  

     The strategy is simple: First, get last year’s election out of the way so the incumbents can be reelected.  Then, pass a new debt ceiling limit this year so the voters will forget by the time we get to the 2018 mid-term elections.  In broad strokes, that’s the preferred time table for raising the debt ceiling.

     Second, how large shall the increase be?   

     The current debt ceiling is about $20 trillion.  If Congress raised the current debt ceiling by another $10 trillion, the public would riot and no member of the Republican Party could claim to be a fiscal conservative in the 2018 election.  

     On the other hand, if Congress raised the current $20 trillion debt ceiling by, say, just $1 trillion, there’d be no public backlash and incumbents will be reelected in 2018.  The trouble with a mere $1 trillion increase is that government will spend that increase in short order and another debt ceiling controversy might occur just before the 2018 election-and no politician wants that.

     The debt ceiling issue really is a darned-if-you-do/darned-if-you-don’t political problem  As you’ll read, the only politically-rational solution to the debt ceiling problem is to repeal the debt ceiling law and let government borrow as much as it likes, whenever it likes, without a need for congressional approval or congressional liability.  I’m not for that solution, but it does strike me as logical and inevitable.

     Wolf Richter recently penned an article dealing with the debt ceiling entitled “US Gross National Debt to Spike by $800 Billion in October?”:   

      “‘There is no chance we won’t raise the debt ceiling,’ swore Senate Majority Leader Mitch McConnell (R., Ky.). He was confident that the Senate would pass a bill that would raise the debt ceiling so that the government could continue to pay for things that Congress told the Government to pay for, and so that the government could service its debts, rather than default on them.

         “Treasury Secretary Steven Mnuchin said, “This is not about spending money.  This is about paying for what we’ve spent, and we cannot put the credit of the United States on the line.”

     If the Debt Ceiling debate is about “paying for what we’ve spent,” it’s not simply about “spending [more] money”.  It’s primarily about repaying some of our existing debt.  

     However, government won’t borrow more currency in order to pay off some of the National Debt’s $20 trillion principal.  Instead, government will raise the debt ceiling primarily so it can borrow more currency to merely “service” the existing debt by just paying the interest due on that debt.  So long as government is able to “service” the debt (pay the interest), government can sustain the illusion that it can and will someday repay the $20 trillion principal in full.

     But, if the day ever comes when government can’t even repay the interest on the National Debt, the illusion of solvency will disappear and the economy will collapse into calamity.

      Moody’s credit rating service recently threatened to cut the government’s credit rating from its current level of “AAA” if government fails to raise the debt ceiling by September 29th because the resulting failure to pay the interest on the National Debt that’s due in October and November.  

     Moody’s wouldn’t have made that public threat unless there was valid concern that the U.S. government might default on its debt by failing to service that debt (pay just the interest, no principal) in  just the next few months.  Moody’s threat implies that government’s financial affairs are no better than those of someone who’s maxed-out his Master Card and can’t even make the minimum monthly payment on the balance due.  The man who can’t make the minimum monthly payment will soon lose his credit card, see his credit rating fall, and watch his cost of borrowing (interest rate) rise on any new debt.

     If government can’t service the $20 trillion National Debt by merely paying the interest, the national economy is as shaky as the finances of the man who can’t make minimum payment on his Master Card. If government must borrow more currency just to pay the interest on its National Debt, then government is about to see it’s credit rating plunge and its cost of borrowing (interest) soar.  As government’s access to more credit is increasingly inhibited, diminished or even terminated by higher interest rates, we could soon approach a moment when government is forced to admit can’t even borrow enough to pay interest on its debts and is therefore bankrupt.

       I don’t expect government to fail to raise the debt ceiling so it can borrow more currency in order to pay the interest on the existing debt.  I don’t expect government to become an admitted bankrupt this year.

     Nevertheless, my point is that government is so so close to bankruptcy, right now, that it could be forced to publicly admit that it’s bankrupt in the first quarter of next year.  

     And, while it’s unlikely that government will be forced to admit bankruptcy in the next few months, the fact that it could be forced to do so is evidence that government is already in such enormous financial trouble that a declaration of bankruptcy is virtually inevitable-maybe not this year, but soon.

      If it’s true that government is nearly bankrupt, then there are some interesting implications:

      Government can’t take on many new programs that require significant additional funding.  I.e., who will pay for a wall between the U.S. and Mexico?

    How much currency can the feds give to Texas for Hurricane Harvey or Florida for Hurricane Irma?  

         Can a bankrupt government continue to subsidize Obamacare?  Or, will Obamacare have to be curtailed or even canceled?  

      Can a bankrupt government continue to project as much military power into the Middle East or the Korean peninsula as it has in the past?  

      If government’s ability to project military power into foreign countries is diminished, will the dollar’s perceived value and standing as World Reserve Currency also diminish?   

     What about paying government pensions and So-So Security?

     What about paying current government employees’ wages?  Can you say “lay-offs” boys and girls?

      What will happen to the perceived value of the U.S. bonds that are being held as collateral by banks for making loans or being held by pension funds as investments?  

      If government is close to an admitted bankruptcy, it’ll be desperate for any source of credit or revenue it can find.  That means the chances of cutting taxes on corporations or the middle class are slim and none.  Meaningful tax reform is unlikely.  If government is truly near bankruptcy, expect taxes to rise.

     You can also expect an increasingly aggressive IRS determined to shake down all taxpayers for more loot.

      A (nearly) bankrupt government can be expected to “beg, borrow or steal” as much currency as it can find, wherever it can find it, to sustain the illusion of solvency.  

     Of those three options (begging, borrowing and stealing), begging won’t work.  Who loves government enough to give them free currency?  Who respects a government that begs?

     Borrowing is unlikely to work much longer. Who will lend more to the debtor who can’t make minimum payments on his Master Card?  Who will lend more to a government that can’t even service (pay interest on) its existing debt?  

       Government survived the Great Recession because it was able to force the Federal Reserve to lend it more currency at near-zero interest rates.  Private lenders had largely refused to lend more currency to the U.S. government at artificially low interest rates, so the Fed became the “lender of last resort”.

     Without the Fed’s “voluntary” purchase of trillions of dollars worth of additional government bonds, government would’ve expressly or implicitly declared bankruptcy at least five years ago.  Government’s dependence on the Fed’s “generosity” is evidence that government has been bankrupt for years.

     And now, government is caught in a predicament wherein it’s at least doubtful that the Federal Reserve is still willing (assuming it’s even able) to increase its already bloated balance sheet by lending as much more currency as the government needs and/or wants.  I doubt that the Fed can refuse to be government’s “lender of last resort,” but I’ll bet that the Fed can drag its feet in order to minimize however much more currency it pays for new U.S. bonds that are certain to be intrinsically-worthless and irredeemable.   

     That leaves “stealing” as a bankrupt government’s last resort to acquire more currency.  We can expect that government (just like any other thug who’s too broke to purchase more crack in the hood) will mug somebody (or some class of people) to get the currency it needs to maintain its illusion of  solvency and power.  (The moral equivalence between government and thugs is not hyperbole.  A gov’ment’s gotta do what a gov’ment’s gotta do.)

       So, who can gov’ment rob?  

     During the Great Depression, Willie Sutton was a famous bank robber.  When captured and asked “Why do you rob banks?” Willie replied, “‘Cuz that’s where the money is.”  Willie’s observation offered sage advice for thugs and bankrupt governments.  If you gotta have more cash, rob banks ‘cuz that’s where the money is.

     In the spirit of Willie Sutton, if government truly  goes bankrupt, it will rob American banks (and, perhaps, pension funds) to get the currency it needs to survive.  There’s no point to sending soldiers door-to-door to search homes for whatever currency (or gold) has been squirreled away in people’s mattresses.  People will scream.  Innocents will be shot.  Sending storm troopers door-to-door would be a public relations nightmare.

     My point is that a governmental bankruptcy (which seems near) is virtually certain to cause government to rob banks, savings and pension accounts.  These thefts are easy because:  1) they can be done electronically; 2) there’s no need to send storm troopers to the banks; 3)  no innocent people get shot; 4) better yet, no guilty people get shot. 

      Whenever people can be robbed under the color of law, it’ll be legalized theft without the need for much violence.  The P.R. won’t be too bad.

     Besides, the public (who, for the most part, have no savings whatsoever) won’t mind if government robs the “rich” (those who have even modest savings and pension accounts).  The non-productive American consumers will support and cheer for their bankrupt government’s self-righteous authority to rob anyone who’s got anything worth having.  (“From each according to their bank accounts; to each according to their crack habit.”)  No one will be safe.  But the banks and pension funds will be the low-hanging fruit that’s easiest and therefore first to be robbed.

      Implication?

Read More @ TheInternationalForecaster.com

Big Trouble For The Silver Market If Mexico Monetizes Its Silver Libertad Coin

by Steve St. Angelo, SRSrocco:

Recently, there was a debate in the Mexican Congress on the proposal to monetize the Silver Libertad Coin.  The debate took place during a forum for “The Promotion of Savings for Mexicans.”  If Mexico decided to monetize its Silver Libertad Coin, it could have a severe impact on the silver market and price.

How much of an impact would the monetization of the Mexican Silver Libertad have on the market?   There could be serious ramifications if we consider the vast amount of silver consumed by the minting of Mexican silver coins in the past.  Before I get into that data, let’s look at the following text from the article, The Mexican Congress Debates the Monetization of the ‘Libertad’ Silver Ounce, on Hugo Salinas Price’s plata.com site;

The central feature of the proposal is that the Central Bank of Mexico (Banxico) shall determine a value in pesos for the “Libertad” silver ounce; and that this value shall be slightly higher (by a percentage that would be defined in the corresponding Law) than the price of silver in the international market, in order to provide Banxico with an assured profit in minting and placing these coins in monetary circulation.

…. if the price of silver should shoot upward, Banxico would have to issue new, higher quotes for the “Libertad” silver ounce (according to the formula to be established by Law). In this way, again, the coin will remain “in circulation”, and since it has no nominal price stamped on it, it will avoid ending up – like all the old silver coins that had stamped values – at the refineries.

Most of those old silver coins, once their content was worth more than the peso stamped value on their faces, ended up in the refineries. The holders of the coins sold their coins at a profit, for their silver content.

This won’t happen with the “Libertad” silver ounce, whose value will be adjusted upward, and benefit the saver, who will thus retain his purchasing power no matter what may happen with inflation. Thanks to owning silver “Libertad” ounces, the public’s savings will float on the ocean of currency through the years.

The important feature in the proposal to monetize the Silver Libertad was that the Central Bank of Mexico would adjust the value of the coin based on the price of silver, rather than striking a permanent numerical value on the face of the coin.  By basing the value of the Silver Libertad on the market value of silver, this would protect the Mexican citizen from the ongoing devaluation of the Peso.

For example, the Mexican Peso has devalued 93{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} versus the U.S. Dollar since the mid-1970’s:

The Mexcian Peso was valued at $0.8006 to the U.S. Dollar in the mid-1970’s but is now trading at $0.0570.  Thus, the Mexican Peso has lost 93{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of its value in just the past 40+ years.  We can see the devaluation of the Mexican currency much better by looking at the relationship between the amount of silver contained in each coin versus the number of Pesos struck on the face of the coin.

The following table came from the MexicanSilverCoins.net site:

The Peso minted between 1869-1913, contained 0.786 (oz) of silver in the one-ounce coin.  The value struck on the front of the coin was 1-Peso.  However, if you look down to 1950, the  1-Peso coin only had 0.1286 (oz) worth of silver in it.  The amount of silver contained in the 1-Peso coin was six times less in 1950 than compared to 1913.

Now, by examining the amount of silver in the 1913 1-Peso of 0.786 (oz) versus the 100-Peso (1977-1979) of 0.6426 (oz), we can see that there was only 0.00642 (oz) of silver backing 1-Peso in the late 1970’s than the 0.786 (oz) of silver backing the 1-Peso in 1913.  Please understand that the Central Bank of Mexico stamped 100-Peso on the face of the coin with only 0.6426 (oz) of silver contained in it.

Thus, the Mexican Peso lost 99.2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of its silver content between 1913 and 1977.

Read More @ SRSrocco.com