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On the Road to Government Default

July 9, 2011
Gary North
7/9/2011

A great default is behind us. The public is unaware of this. If you read this report, you will no longer be unaware of it.

The ease with which this default took place should serve as a warning: there will be additional, much larger defaults. Again, the public does not understand this. The main one will be Social Security. The program is now in the red: more money going out than comiomng in. But most people still cannot believe that the program really will go belly-up. That’s why I produced a video on this.

What? Would the government really break its retirement promises? Of course. It has already been done. Bear with me. You need to know how the game is played in Washington.

Legally, the Federal government is a month away from bankruptcy. The government, under the direction of Treasury Secretary Geithner, is borrowing money from Federal employees’ pension funds to keep the doors open.

It’s an accounting trick. First, the Federal government funds the pension funds with money. Second, the funds buy Treasury bonds. Third, the government immediately spends the money. It’s like Social Security, whose Trust Fund is a pile of IOUs from the government.

And now… the rest of the story. …..

One Comment leave one →
  1. July 9, 2011 4:29 pm

    What the public does not understand because it was not told and because it is too treacherous to believe American officials would allow it. But the old Neo-Con Plan of the Bush days, including, as we know by now, a global unification that demanded a new monetary currency. So things were in motion to do away with the dollar as we know it. Also, Bush openly recognized (would be nice to ask him if he slipped or like predecessor was sending warning to us) way he made these comments:
    “So we are going into bankruptcy, so what we will come out of it” in response to his request for more war money. And when once admonished he stated “the Constitution is just a peace of paper” regarding the changes the changes he was making. And, cute, “being president is hard be easier if I were a dictator”
    You guys will have to face the facts soon, stop blaming all on Obama and start saving this nation from the real threat. After bankruptcy…next global financial center will be Israel mark my words.

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