The Most Revolutionary Act

Diverse Ramblings of an American Refugee

Dr Stuart Jeanne Bramhall

Dr Stuart Jeanne Bramhall
Location
New Plymouth, New Zealand
Birthday
December 02
Bio
Retired psychiatrist, activist and author of 2 young adult novels - Battle for Tomorrow and A Rebel Comes of Age - and a free ebook 21st Century Revolution. My 2010 memoir The Most Revolutionary Act: Memoir of an American Refugee describes the circumstances that led me to leave the US in 2002. More information about my books (and me) at www.stuartjeannebramhall.com

MY RECENT POSTS

FEBRUARY 10, 2013 5:22PM

Will the US Economy Collapse in May

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house of cardds

John Williams, founder of Shadowstats.com, predicts the US dollar will collapse by May 2013 from a massive self-off (i.e. the value of the dollar will crash because other countries will dump dollars in favor of other currencies) by May 2013. ShadowStats.com is dedicated to correcting the deliberate distortions the federal government, builds into their unemployment figures and other economic data. Sustainability activist Richard Heinberg first popularized the site in his 2012 The End of Growth. According to Williams, Obama has until May to get our fiscal house in order. If he fails to do so, global financial markets are going to dump all their dollars, their Treasury Bills and their dollar-denominated stocks in favor of stronger currencies.

Employing Treasury data and General Accounting Principles (GAP), Williams calculates the true federal deficit for 2012 was $6.9 trillion. This means the US government, in 2012 alone, spent $6.9 trillion more than it collected in taxes. In other words, as Williams asserts in the following USA Watch Dog video, the US is bankrupt:

 

 

In the absence of real growth, which according to Williams hasn’t occurred since 2007, the country has no hope of ever recouping this shortfall by raising taxes. Williams reminds us that the US government relies on consumer spending for 70% of GDP. Household incomes were already significantly declining before Obama reduced them an additional 2% with a higher payroll tax. Prior to the 2008 financial crash, consumers made up for declining incomes by incurring debt, via credit cards and home equity and personal loans. With banks freezing credit and house values collapsing, this avenue is closed for the vast majority of Americans.

Given the heavy reliance of all the major world economies on the US economy, it looks like a no-win solution – except, apparently, for two forward-thinking economists at the IMF. After coming to similar conclusions as Williams, they are promoting a plan in which government, rather than private banks, would assume responsibility for issuing and controlling the money supply. To read the IMF working paper, entitled The Chicago Plan Revisited, click here

photo credit: Jonathan_W via photopin cc

Crossposted at Daily Censored and The Most Revolutionary Act

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No sense in getting too optimistic. Killing a dragon is a tough job.
My feeling, Jan, is that the IMF sees the handwriting on the wall. The poorer EU countries, like Egypt, Tunisia and other countries in the Middle East have become virtually ungovernable. I honestly believe this is a last ditch effort to save capitalism before the blood starts running in the streets.
I read the short version of the book from 1936 by Fisher (?) on 100% reserves- spurred by your post before this one. Of course him and the others from depression days made sense, and of course Truman was too scared of the bankers to try to put it into law. Guess we'll see how it plays out this spring if we are indeed backed against the wall (would seem so)-
Not a chance.

But, if you disagree and want to vote with your money -- http://finance.yahoo.com/echarts?s=UDNT+Interactive#symbol=udnt;range=2y;compare=ust;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Triple short $US.

Everyone is currently trying to devalue to boost exports. Japan is doing so very publicly.

The Euro?

Plenty of bad things can happen.

Like what is going on in Congress.
so governments are more forward thinking and responsible than, well, anyone bar a 16 y. o. boy in the girl's locker room?
Dr. they ain't going to let the economy collapse. As long as there is food its only a matter of pressing a button and presto "Mo money!"
There is no doubt the whole world economy is now changing.

EU, Japan and the us can't any more rely on industrial exports and they must cut consumers' spending somehow.

In the really big countries. in India and in China most of the populations are living in rural areas and they will stay there. I think in 'western' economies many people will leave urban areas for countryside villages during next twenty years. There is no way the rich 'western' economies could continue making their wealth of industries and factory products by selling those to poorer economies forever.

I don't think that the American economy would collapse, but it will change a lot.
The vast majority of "economic growth" for years if not decades has been based on the growth in fraud not in economic activity that is designed to improve the quality of life for the consumers.

Advertising rose from $39 billion in 1950 to $256 billion in 1990, then to $435 billion in 1998 according to Benjamin Barber and Naomi Klein; and there is an enormous growth in lobbying expenses, campaign contributions and shipping cost along with that.

We're replacing products and services that benefit us with hype and lies that create profits without benefit for the majority.

When is the last time anyone saw a commercial that provided information that was beneficial; the cost of these commercials is being passed on to consumers without benefit.

That house of cards already fell down but many haven't noticed.
Zachery, I think you have put your finger on it. The US still leads the world in exporting military hardware, speculative financial products and illicit drugs. Otherwise the health of their economy is declining fast.

I think you're right, Vannu. The only thing the US had to offer the 3rd world was technological innovation, and now China, India and Germany are the major innovators.

The problem, Jack, is that once the dollar crashes, printing more money will only make things worse by increasing inflation. The US will become like Zimbabwe and people will have to pay $1,000 for a loaf of bread.
Money is pretty much imaginary anyway isn't it. Banks create it, and destroy it. That's what I learned from reading what you recommended.
Here's a thought... do away with the bankers. They are of no practical use. Make them work for a living and if they can't hack it, then bye bye. Barter system will work for a while until we can figure something else out. Then, outlaw (ha) lawyers... etc..
I'm as much (if not more) of a doom-and-gloomer as the next person, but I've been reading for several years now how the inevitable collapse is coming, and they always put it about six months down the road. I guess this predicion is gloomier because it cuts the usual time frame in half, but I've got to hand it to those who put exact dates on this sort of thing.

And if this doesn't happen, what do you think John Williams' rationalization will be?
Hi Jeanette, if you listen to the interview, Williams states that 1) he can't predict the exact month foreign holders of US Treasury bond will lose confidence in the US economy and start dumping them and 2) there's always a possibility Obama and Congress will increase international confidence by breaking up some of the too big to fail banks, sending bankers to jail, and increasing taxes on the rich instead of continuing to run the US economy on borrowed money (increasing the debt).

I agree, Trig. That's pretty much what The Chicago Plan would do - do away with bankers as we know them. They would become more like credit unions because they wouldn't be allowed to create money any more.
[r] Jill Stein knew what to do. Sigh. Thanks Stuart!!! best, libby
You wrote:

"there's always a possibility Obama and Congress will increase international confidence by breaking up some of the too big to fail banks, sending bankers to jail, and increasing taxes on the rich instead of continuing to run the US economy on borrowed money (increasing the debt)."

I don't think that Obama or Congress would be able to do it, but bankers and big business men will make a deal of reducing imports to the US. They have to do something to save themselves; they are living of other people's spending and they want to continue doing it.

The debt is originating from the problem of the imbalance between imports and exports. US companies have bought lots of strategic metal industries (connected with weapon industries) abroad, but Japanese and Chinese have bought lots of American consumer goods industries.

Businessmen will change the economy such ways that common people can't any more consume as much Chinese and Japanese made televisions, computers, dvdplayers and cars and such things and they will even buy back some of sold industries.

But of course the real problem is with weapon industries. If the US economy wants to survive the big weapon industries must be able to continue selling.

Only governments buy expensive and sophisticated weapons and governments should live in fear to be willing to buy weapons. Obama and Congress have helped American weapon industries great ways by expanding the wars all over the world. That trend will continue.

Obama will make a deal with Putin and even with Chinese to reduce useless and costly nuclear weapons and instead continue asking industries to develop more and more new drones, nanotech missiles, surveillance electronics, etc. Some of them they will start selling abroad, too.