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Old August 1st, 2011, 09:25 AM
sprofiter sprofiter is offline
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Ron Paul: "The U.S. Government Must Admit It Is Bankrupt"

Any time you bring the two Pauls together in an interview, and start discussing items such as the debt ceiling, government spending, and monetary policy you know the results will be good. Sure enough, in this rare ABC interview with father and son, the sparks fly, and among the topic touched is the most popular story on Zero Hedge from yesterday, namely President Obama fabulous hypocrisy, who after bashing the debt ceiling as a senator 4 years ago, has bet the outcome of his entire economic policy on maxing out every single credit card available to him. Paul's response: "we have to face the fact that we are bankrupt and we can't pay our bills." Not exactly the kind of thing one wants to hear if one's name is Hu Jintao. That said you know the Paul-led interrogation of Bernanke will be something else, even if it is ultimately totally fruitless.

http://www.zerohedge.com/article/ro...mit-it-bankrupt
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Old August 5th, 2011, 06:52 AM
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lasner lasner is offline
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Were it not for the two facts that we hold the world's reserve currency and that we have military supremacy, I would say yes, we are currently bankrupt.

With those two facts however, we likely have a little more time to get our act together. Whether we act or not, is unknown.
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Old August 12th, 2011, 08:49 AM
erock erock is offline
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Russia and China are settling in their own currencies now. That is half of BRIC. It's a matter of time before "reserve currency" is symbolic.

The fact that the US is not taking any steps speaks volumes. They are gonna ride this unicorn until the crash.
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Old August 29th, 2011, 11:59 AM
futuretrader futuretrader is offline
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If you understand the difference between the 'Special Government Securities', which are simply IOU accounting entries showing the Treasury has promised to borrow money to pay SS obligations when SS begins to run a deficit, and real 'Treaury Securities', which are tradable legal contracts to pay third parties interest and principal for a loan over a fixed term; then you can see how the Treasury would have no problem paying SS benefits even if the debt ceiling was not increased.

The reason for this is that for each new Treasury Security the Treasury sold to borrow money to fund SS benefits, the Treasury would write down the equal amount of 'Special Government Securities' notated in the account of the SS Trust Fund. Since the 'Special Government Securities' notated in the SS Trust Fund and the amount of real Treasury Securitities outstanding are both included in the Debt Ceiling....the creation of new Treasury Securities that extinguish an equal amount of 'Special Government Securities' would have no net change on the national debt...the change would only be creating real securities to retire IOU promises. The Debt Ceiling has no bearing on the Treasury's ability to do this...so, there is no reason that SS checks would not go out...unless of course someone just wants to scare you.
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