Sunday, October 5, 2008

Global Red Alert: US Will Not Be Able to Service Its Debts By H2-2009 - Market Shut Down After Declaration of Force Majeure - By Matthias Chang (LATES

Something Important to think about and ponder

Global Red Alert: US Will Not Be Able to Service Its Debts By H2-2009 - Market Shut Down After Declaration of Force Majeure - By Matthias Chang (LATEST UPDATE)
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Matthias Chang
Saturday, 04 October 2008 06:30

This is the most important Red Alert to be issued by me. Do not take my word for it. Verify my facts and analysis, word for word, paragraph by paragraph, as your fortune (if any) and more importantly your family’s livelihood depends on you taking all the necessary steps now to avoid the inevitable pain that will follow.

All the signs are there that the Bush regime may impose stringent measures before the year is out, and if not, his successor will definitely do so when he assumes power in 2009. This will take place, at the earliest, by year end 2008 and latest by H2 – 2009. This is a given.

You have the means to verify it. Do it now! Google it before you read the next sentence. Once you have verified the same, you will be scared, very scared as I am now. We have an urgent duty and responsibility – that is to warn every American citizen as the first priority, and then fellow citizens in your country. This is because the impact and consequences will be global.

US Has Not Been Servicing Its Debts For Years

Sometime ago, before the Beijing Olympics, I had warned that the financial crisis would unravel rapidly after the Olympics, as China could not afford a calamity before and during their version of the greatest show on earth.

We are now witnessing the U.S. economy’s slippery slide to the financial hell hole.

Not many Americans are aware that the US has to service annually, debt-interest to the tune of US$400-500 billion! Being in perpetual deficit (both trade and budget), the only way that the US can continue borrowing and paying its ever increasing interest burden is by borrowing in larger and larger amounts from the central banks in Asia, Middle East and Europe.

Additionally, the US banks have been insolvent for years but they were able to cover up their bankruptcy because Alan Greenspan and his masters in Wall Street and Thread-needle Street were able to come up with an incredible Ponzi scheme – the selling of financial toxic wastes (CDOs, MBS, CDS etc.) which enabled these bankrupt banks to fleece both central banks and private investors, and create digital profits by fraudulent creative accounting and corruption of politicians in Congress!

Everyone was borrowing to pay off the previous debts and interests.

In 2000 / 2001, the US economy almost collapsed and the false flag operation of September 11, provided the pretext and the opportunity for the Military-Industrial-Financial Complex to wage a global war (the “War On Terror”) to avert the financial crisis – the massive US debt default. The Bush regime was able to delay the crisis for seven odd years.

China, Japan and other major central banks, given the then prevailing circumstances, accepted the status quo and grudgingly allowed the US to be in default and to part-pay the interests due on past debts and the monthly new debts to pay for the war in Iraq and other misadventures.

China realized that unless she accommodated the US predator, her economy would suffer a major blow and even a war with the US. Bush’s challenge that you are either with us or with the terrorists, was and is directed at creditor countries and served as a warning not to ditch the dollar and derail the US controlled global fiat money / fractional reserve banking system. To the Bush war cabal, any attempt to call a default would be considered a “terrorist threat” on America.

It was a brute’s message: Any threat of economic war would be countered by a hot war and all military options would be on the table, including nuclear war.

The Japanese Yen Carry Trade

For more than two decades the Yen Carry Trade was the main pillar that shored up the shaky foundations of the US controlled global banking system. The Japanese was feeding the hungry US banking system, knowing full well that it would be a matter of time, before the hungry US financial beast would choke on its debts.

Of late, there have been several articles in the American mass media singling out China as the main threat to the security and financial interests of the US. I beg to differ. The principal threat to the US is Japan. She has been, and will be in the future, the greatest threat to the US. This is because Japan’s war party never forgave the US for its disastrous defeat suffered in World War II and the humiliation of the nuclear destruction of Hiroshima and Nagasaki!

But for China’s agreement to finance the US’s ever growing appetite for debt, the financial crisis would have erupted much earlier. The Japanese grand plan has therefore been delayed. But no longer! Why?

The End of The Road

Given the present state of financial health of the US, China can no longer sustain the massive handouts to the US without damaging its economy. This is also the situation faced by other central banks.

This is a matter of simple arithmetic and common sense as every honest banker (if ever there was one) will tell you. Interest is revenue. If interest is not paid, there is no revenue to the lender. It is the interest payments that will enable the lender to lend more monies to borrower as well as other borrowers eager for loans. Once a borrower fails to service the interest payments or service it adequately, the lender will have a cash-flow problem. In the result, the lender will not be able to lend or unwilling to lend further unless and until the delinquent interest payments are remedied.

In the present scenario, we are not even addressing the payment of the principal loan. If interest payments are in default, the lender can forget the repayment of the principal sum.

For all intent and purposes, the US cannot in the next 50 years at the earliest, pay off the principal outstanding to global central banks! And this is conditional on the US not waging any more wars.

Declaration of Default, Only Way Out

For the past 16 months, we have witnessed borrowers defaulting on their loan installments and walking away from their mortgaged homes, because it does not make any sense for them to continue making payments when the mortgaged homes’ values have collapsed to two-thirds of its original value or even worse.

The same situation applies to the US. America knows that it cannot pay the principal which is now in the trillions. It cannot continue to pay the ever increasing interests due on past debts and new debts to finance the deficits and the wars in Iraq and Afghanistan. So, why continue with the pretense that it is still credit worthy?

The Bush regime, and for that matter any other future regimes, will not be able to cut back on defence spending. The Military-Industrial-Financial Complex will not allow it. If any President attempts to do so, he would be removed from office by a bullet to the head or an induced heart attack.

Neither would it be possible to raise taxes to pay off the over-due interests as it has been estimated by several economists as well as Paul O’Neill that the taxes would have to be increased from the present 28% to 65%. No President can impose such a hefty tax and remain in office.

David Walker, US Comptroller-General and Head of GAO have warned repeatedly that the US could no longer service its debts beyond 2009! And he is being optimistic. I would say that by year end, the US would hit the dead end.

The recent US$700 billion “bailout” approved by Congress is an attempt to prolong the inevitable. Bush hopes that he can pass the buck to the next president. But I doubt it.

And if I am right, and the shit hits the ceiling fan, Bush will have no choice but to declare a force majeure, tell the world that US is in default and impose martial law to prevent social unrest.

To the skeptics, I would like to remind them that when President Nixon was faced with the demand by France that their dollar holdings be redeemed in gold, he announced to the stunned world that the US dollar would no longer be convertible to gold, as there were insufficient gold in Fort Knox to meet the demand.

And because the Western world was facing the threat of war with Russia (an engineered threat at that), countries outside the communist bloc all fell in line and kow-towed to the “mighty US paper tiger”!

Today, the US and the Western world are reaping what they have sowed in the 1970s! The chickens have all come home to roost.

Government protocols for economic collapse are all in place. All the relevant institutions have the necessary legal powers to enforce government decrees and edicts to ensure that when banks are closed and markets shut down, there will be minimum resistance or else blood will flow on the streets!

This is the scenario that we will be facing in the coming months.

1 comment:

Badrul Zaman said...

geez.. this mathias chang can really scare the shit out of ppl.
however i'm not denying his views 100%, neither am i agreeing to it 100%.
i believe the worse has yet to come. the US700bn bailout is just one step to rectify all 'wrongdoings' of the toxic assets 'mishap'. it may be the only thing that can happen given the current financial they're in. with this, i'm inclining to say that a war will take place. God i sure hope i'm wrong....