Below you see the dominance of 70 years for America was the social Democratic years since FDR----when wealth equity was strong and the American people had the disposable income to fuel our US economy----When Bush/Obama partner with China in selling the bulk of our national debt to the Chinese---why would they do that? The goal of this far-right wing global corporate rule is taking the US to the same political and societal structure as China-----one party---autocratic-----naked neo-liberal capitalism----no citizens with rights. So to the global 1% not caring now the US dollar no longer has value crafting that ONE WORLD currency will start with the model of China.
When the US dollar falls----the US will feel the same spiraling inflation/deflation as other third world nations----our dollars will have no value so we will be in the same boat as nations where simple items require large numbers of dollars.
THIS IS WHY THE ALTERNATIVE B-NOTE CURRENCY IS BEING PUSHED IN US INTERNATIONAL ECONOMIC ZONES LIKE BALTIMORE.
- The dollar's 70-year dominance is coming to an end...www.telegraph.co.uk/finance/comment/liamhalligan/...Jul 18, 2014 · The dollar's 70-year dominance is coming to an end Within a decade, greenback's could be replaced as the world's reserve currency
The US Dollar is Rapidly Losing Dominance - The Silver Bug
By Nathan McDonald 2 years ago October 23, 2014
There are two key factors that keep the failing US economy together. Firstly, their massive military-industrial complex, and secondly, their reserve currency status. The latter enables the first, along with countless other campaigns of destruction and waste.
Take away the Unites States’ ability to print unlimited funds and you would see a shocking global shift in power. It would shake the foundations of the world, both figuratively and literally.
Since gaining the status as reserve currency of the world, the US has expanded its control to a breaking point. They have overreached and expanded too far. The country is bankrupt and produces little to nothing of any real value. It has sadly become a nation of debtors and serfs.
This change in status has not passed unnoticed in the geopolitical world. For the past decade, the power-duo of Russia and China has been stepping up their game and acquiring real physical assets, such as oil, gold and silver. This accumulation of wealth has enabled these nations to be in the driver's seat they now find themselves in.
Just a short decade ago, if a country even dared to think about circumventing America’s reserve currency status, it would have resulted in an economic and military attack that would of left the perpetrating nation crippled. This is no longer the case, the power structure has shifted. The United States is no longer the only “big player” in the game.
Cue, Russia and China. Two nations who have actively been seeking to replace the US dollar. They know, just as well as anyone else in the power structure, that this is the true source of the United States’ power. Hence, they have been working behind the scenes to settle their trades in Renminbi and Rubles, and not US dollars.For the time being, Russia and China were more than content to simply work together and keep their trade deals between themselves; likely testing the waters to see how the United States reacts. Now they appear ready to go to the next level, the sovereign man reports:
Just this week yet another currency swap agreement was made between the Chinese and Russian central banks. This time for 150 billion renminbi.
Trade volume between China and Russia will reach $100 billion (600 billion renminbi) next year, and is expected to reach $200 billion in 2020. This latest currency swap agreement will greatly reduce the need for dollars in their transactions.
Currently, 75% of trade between the two countries is settled in dollars. When they signed the agreement for the bilateral currency swap, Russian deputy Prime Ministers said this will “encourage companies from the two countries to settle trade in local currencies and avoid the use of a third country’s currency.”
Obviously, this unmentioned "third countries currency" is the US dollar. They are now blatantly showing their disdain for the world reserve currency, but it doesn't stop there:
Even the European Central Bank has started discussions on the possibility of including the renminbi as one of its reserve currencies.
And the euro and the renminbi are already directly tradable as of this month.
On Tuesday the UK also became the first country besides China to issue a sovereign bond in renminbi.
This coincided with the issuing of 180 million renminbi of corporate bonds by China’s ICBC in South Korea. Another first. South Korea is firmly on the renminbi train as renminbi deposits in the country jumped 55-times in just one year.
The writing is on the wall. The day of endless money printing and abuse of power by the United States is coming to an end. Its allies are even now beginning to jump ship. This transition will take many years and face much resistance by the current power structure, but that changes nothing.
The transition has begun and there is no stopping it now. As gold is flowing from West to East, so too is economic power. A historic economic change lies just over the horizon.
The US moved from the gold standard a century ago but retained strong presence of gold in places like Ft Knox tied to our US Treasury. Well, almost all of American gold has been sold to private investors since Clinton/Bush/and especially Obama and as you see our US Treasury no longer has enough gold----the only asset holding value during these kinds of financial crises-----how far does $10 billion in gold go? That much falls out of a Congressional pols pocket at one time.
So Wall Street global pols loaded the US with debt, brought the economy to collapse with no gold or silver reserves and VOILA----THE US IS A WARD OF THE INTERNATIONAL MONETARY FUND----THE IMF-----the first stage all third world status nations take in becoming a colonial entity of global banks and corporations.
'The remaining 95 percent of U.S. Treasury gold ($10.4 billion in book value) is held in custody for the Treasury by the U.S. Mint'.
Obama and our Congressional pols---both Republican and Clinton/Obama Wall Street neo-liberal sat and watched and facilitated this movement of our national wealth and gold reserves out of the country these few decades with much of this happening these last several years of Obama's terms.
$20 trillion in national debt and $10 billion in actual asset of gold.
Does the Federal Reserve own or hold gold?
The Federal Reserve does not own gold.
The Gold Reserve Act of 1934 required the Federal Reserve System to transfer ownership of all of its gold to the Department of the Treasury. In exchange, the Secretary of the Treasury issued gold certificates to the Federal Reserve for the amount of gold transferred at the then-applicable statutory price for gold held by the Treasury.
Gold certificates are denominated in U.S. dollars. Their value is based on the statutory price for gold at the time the certificates are issued. Gold certificates do not give the Federal Reserve any right to redeem the certificates for gold.
The statutory price of gold is set by law. It does not fluctuate with the market price of gold and has been constant at $42 2/9, or $42.2222, per fine troy ounce since 1973. The book value of the gold held by the Treasury is determined using the statutory price.
Although the Federal Reserve does not own any gold, the Federal Reserve Bank of New York acts as the custodian of gold owned by account holders such as the U.S. government, foreign governments, other central banks, and official international organizations. No individuals or private sector entities are permitted to store gold in the vault of the Federal Reserve Bank of New York or at any Federal Reserve Bank.
A small portion of the gold held by the U.S. Treasury (roughly $600 million in book value)--about five percent--is held in custody for the Treasury by the Federal Reserve Banks, as fiscal agents of the United States. The vast majority of this gold is located in the vault at the Federal Reserve Bank of New York, and a very small portion is on display in several Federal Reserve Banks. The remaining 95 percent of U.S. Treasury gold ($10.4 billion in book value) is held in custody for the Treasury by the U.S. Mint.
Since this coming economic crash from the US Treasury and municipal bond market fraud will create the conditions of government at all level not only having no revenue but no way to generate revenue as in Baltimore------Congress, the Maryland Assembly and Governor will tell us we need the help of the IMF and global investment firms tied to the IMF and global development. This is how third world nations have all sovereignty removed and all wealth assets convert to these world banks and global investment firms. That is the coming stage in US International Economic Zone cities that are set to feel the worst of the coming economic crash.
The U S FED will take several years pretending the stabilize the economy-----we will see soaring inflation or deflation both killing our economy----but that IMF/global investment firm/developer group will be the source of installing International Economic Zones and global corporate campuses and global factories in our US cities. Make no mistake---the US will soon officially be termed a third world nation needing to be SAVED by the World Bank.
We could have in this election had politicians who would have fought this---instead we have the same pols creating this economic mess still in office to see it through.
As you see in this statement----and I think American citizens are seeing all this already happening especially since the 2008 economic crash----the exporting terminals and global mining corporations allowed to come in and take US natural resources is the first sign the US is a third world nation
'Our countries are not to be blamed for having been colonies, neo-colonies, banana republics whose role was to produce raw materials, exotic products and fuel at low cost and with cheap labor'.
This is what a US International Economic Zone looks like----
IMF’s policies towards Third World Countries: Lending assistance or exploiting their economies?
With the advent of globalization international institutions began to emerge and role of international institutions and non state actors increased. National boundaries were transcended by international institutions which were governed by these states mutually with a mutual goal of improving political and economic gains. IMF emerged as an international institution after 2ndworld war during the Bretton woods conference in 1944 to rebuild Europe which had been devastated by war. Secondly to save the world from Great Depression, this resulted in huge unemployment’s throughout the entire world. It resulted from beggar thy neighbor policies in which currency of a country was devalued and restricted often at the expense of neighboring countries. This resulted in spreading of depression affecting many countries. IMF was established to monitor money exchange primarily among rich countries later its role expanded towards third world states as it started lending to poor countries to liberalize their economies as the basis goal behind IMF was an international market system based on principles of economic
liberalism. IMF has a similar role like UN where UN is involved in providing collective
security IMF provides collective economic platform. IMF was with the passage of time it
started lending to poor countries.IMF is run by 22 executive member boards and its voting system is based on the monetary
contribution of member country. Larger the contribution larger is the influence of that country.Despite its important role as an international economic institution IMF has been criticized
extensively for its policy, governance issues and its lending conditions specifically with regard to third world countries. Often IMF pushes for economic liberalization and propagates free market ideology without considering their separate economic conditions and social pressures.IMF pressurizes on privatization and competing in international market when domestic industries are not ready to compete and social safety nets are not in place. Many developed countries refused IMF’s policies and applied their own models. USA and Japan privatized a few industries protecting major industries which were not ready to compete. However if any country fails to perform well and does not fulfill its lending conditions economic assistance issus pended from not only IMF but other international institutions like world bank and WTO also withdraw their assistance.
In the case of Ethiopia IMF withdrew its assistance if its budget should be on more solid grounds. IMF wanted Ethiopia to open up its market “liberalize its financial market which USA and Western Europe themselves did not adopt till 1970’s. “IMF was confusing ends with means”. One size fit all approach of IMF often fails in the developing countries as there are no markets in these countries and social and cultural problems are often an obstacle. But IMF pushed for market liberalism as its policies “required it to give little of any consideration of a country’s particular circumstances and immediate problems”. East Asian countries which are economically successful liberalized their economies step by step.IMF encourages privatization but privatization in third world countries led to many social and economic problems. Privatization in Russia led to a few people becoming rich. It affects rate of employment as foreign firms often fire workers without any regard to social cost associated with it.In developing countries privatization of educational institutions often means costly education which cannot be afforded by children of poor people. Privatization in any sector means high rates which are not affordable for a common man. Privatization often leads to corruption as there is no effective means to ensure that money given has been used for privatization. Corrupt politicians often benefit from the aid given as there is no accountability.IMF focuses on bringing down inflation but in the recent case of Pakistan conditions were imposed to increase interest rates to bring down inflation. It adversely affected situation in the country as inflation increased more and manufacturing industry stopped working. In addition debt of 1.3 trillion in five years from 2002-2007 have been incurred. Even in 2009 it incurred a debt of 1.6 trillion.Imposition of VAT and privatization will lead to damaging local industries. VAT will be difficult to achieve due to lack of an affective system of collection of taxes.Excessive spending by government has led to decrease in revenue which in turn leads to decrease in revenue which in turn leads to increase in population which affect poor people more than rich. “VAT will promote a dual economy in the country with unpredictable consequences.For many years country has been in a state of stagflation, the IMF propelled stabilization has failed to materialize.These lending policies towards third world countries are criticized for creating more poverty.“Countries like Botswana which have ignored IMF/World Bank policies are more prosperous whereas IMF’s sanctioned policies have all but crippled once envied and thriving education of Ghanaians resulting in social and economic time bomb.” Social affects of IMF’s policies are damaging for the people whose income relies on local industries which are in turn affected by
these policies. Many countries are now increasingly turning away from assistance and creating their own regional organization like Latin American countries did on the model of EU. Many developed Asian countries relied on their own economic models and did not work according to IMF’s advice. They were labeled as failed economies but they succeeded in emerging as developed nations.IMF’s policies led towards rising debts in developing economies which have hindered development of those economies. As Fidel Castro said in his interview of Mexican magazine on21st March 1985 “Our countries are not to be blamed for underdevelopment or for the debt. Our countries are not to be blamed for having been colonies, neo-colonies, banana republics whose role was to produce raw materials, exotic products and fuel at low cost and with cheap labor.The riches and well being of which have been deprived through the imposition of economic dependence and underdevelopment cannot even be estimated let alone be measured. It is our people who, by right are the creditors of the rich and industrialized western world.”
We knew this in 2008 and all economic policy from the US FED under Bernanke and all Obama and Congressional laws passed placed the US in overdrive towards US Treasuries being JUNK BOND STATUS. So, this article in 2008 was right on----and financial analysts have these several years reported the movement of US Treasuries and municipal bonds to junk---it basically means----they are just like toxic subprime mortgage loans and will be traded as junk.
Social Security Trusts and Medicare Trusts don't exist in JUNK STATUS.
Remember, it was Erhlich/O'Malley as governors who pushed all this state and city debt, it was the Maryland Assembly pols led by PUGH and MCINTOSH that loaded on this debt----and we allowed all these Wall Street players be re-elected to further this IMF goal along.
Are U.S. Treasuries Headed For Junk Bond Status?
By Cedric Muhammad
-Guest Columnist- | Last updated: Feb 4, 2008 - 12:52:00 PM
What's your opinion on this article?
“And every nation has a term; so when its term comes, they cannot remain behind the least while, nor can they precede (it).” --Holy Qur’an 7: 34“For lack of guidance a nation falls, but many advisers make victory sure.” --Proverbs 11:14 (New International Version)
“Moreover he called for a famine upon the land: he brake the whole staff of bread. He sent a man before them, even Joseph, who was sold for a servant: Whose feet they hurt with fetters: he was laid in iron: Until the time that his word came: the word of the LORD tried him. The king sent and loosed him; even the ruler of the people, and let him go free. He made him lord of his house, and ruler of all his substance: To bind his princes at his pleasure; and teach his senators wisdom.” --Psalms 105:16-22 (King James Version)
The fact that it is possible that U.S. Securities could go from the highest credit rating to one of the worst in a matter of a decade or so, if government public finances and the commitments made to the Baby Boomers are not addressed, is one of the reasons why the country�s top government accountants, Mr. David M. Walker is openly, desperately and angrily stating that America is facing a �fiscal tsunami,� and that �the federal government is on a �burning platform.��
What is the truth of United States Senator George Voinovich’s (R-Ohio) statement, made on the floor of the Senate on October 24, 2007: “According to S&P, U.S. Treasuries will lose their triple-A credit rating in 2012 because of the government’s deteriorating long-term fiscal position?”
To learn that, I contacted both the office of Senator Voinovich and the influential ratings agency, Standard and Poor’s (S&P). One can learn more about Standard & Poor’s by visiting their website at: http://www2.standardandpoors.com/.
The office of Senator Voinovich told me that the statement was in fact made, as the Congressional Record indicates, and as was reported, and that it was based upon a reading of a report published by Standard & Poor’s about the impact that America’s aging population—and the Medicare, Medicaid, and Social Security benefits promised and owed to it—would have on government solvency.
Government solvency refers to the ability of a government that has borrowed money to pay back that obligation or debt as scheduled, or when demanded by a creditor (the one who has loaned the government money). A government is said to be insolvent when it cannot pay back a debt in its entirety or is unable to even make payments related to the interest it is being charged on the loan.
To personalize it a bit, for clarity sake, we are insolvent as individuals when we can’t pay our bills or money we owe (smile).
In order to verify the existence of the report Senator Voinovich’s staff made reference to, and in order to determine the accuracy of its interpretation of that report, if it existed, I contacted Standard & Poor’s. Here is the question I asked Standard & Poor’s:
I am writing to learn the veracity and the empirical source of Senator Voinovich’s reference to a S&P determination in his October 24, 2007 floor speech. In that speech made on the floor of the United States’ Senate he said: “According to S&P, U.S. Treasuries will lose their triple-A credit rating in 2012 because of the government’s deteriorating long-term fiscal position. What kind of global economic turmoil awaits us five years from now when the U.S. government is considered just as risky as a typical corporation? And what economic catastrophe awaits our children and grandchildren in 2025, when Standard & Poor’s projects that U.S. Treasuries will be classified as junk bonds?” Could you kindly direct me to any available data, statements, research or releases that relate to this statement and your organization?
Here is the answer I received from Standard and Poor’s:
“...please find attached a report which we’ve been publishing annually since 2002. The report reviews the implications of demographic change on sovereign ratings across the developed world. As you’ll note in the report, the analysis in no way constitutes a forecast of ratings trajectories by S&P—it merely states that, if no countervailing structural and fiscal reforms were undertaken, deficits would increase to levels that, sooner or later would become incommensurate with today’s ratings—and by a large margin. The simulation illustrates underlying tendencies of what could happen in the unlikely event of complete government complacency. The message is unambiguous: Without strong and sustained reforms, the high credit ratings on these governments could fall due to demographic spending pressures, starting in the 2010s.
In the case of the U.S.’s ‘AAA’ standing, after 2015 it would fall into the ‘A’ category, and would then drop further into the ‘BBB’ category by 2020. In 2025, U.S. fiscal indicators would have weakened to an extent that they would be more typical of performances currently associated with speculative-grade sovereigns.”
Attached in the response I received from S&P was a report, “Global Graying Country Report: United States Of America,” which indicated that if the current state of American tax and spending policy remained the same and did not improve, the burden of the estimated 78 million individuals commonly known as Baby Boomers on America’s public finances would be so great that it would cause a ‘fiscal deteoriate’ ”of a “magnitude that is not compatible with the current ‘AAA’ sovereign rating of the United States.” The report then goes on to describe how Standard & Poor’s determines (or “derives”) a “hypothetical sovereign rating” that might arise in the future.
Standard & Poor’s assigns bond credit ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, D.
AAA or Triple-A is a rating given to the highest quality debt or bonds, while D is the poorest quality and refers to a debt that is in payment default.
Bonds like American government securities are generally placed into two broad categories—“investment grade” bonds and “junk” bonds. Investment grade bonds are the top four categories: AAA, AA, A, BBB. And junk grade bonds are those below BBB.
So, what is my conclusion?
If you take what Senator Voinovich says (“According to S&P, U.S. Treasuries will lose their triple-A credit rating in 2012 because of the government’s deteriorating long-term fiscal position. What kind of global economic turmoil awaits us five years from now when the U.S. government is considered just as risky as a typical corporation? And what economic catastrophe awaits our children and grandchildren in 2025, when Standard & Poor’s projects that U.S. Treasuries will be classified as junk bonds?”) and compare it to the report sent to me by S&P, and what S&P told me (“In the case of the U.S.’s ‘AAA’ standing, after 2015 it would fall into the ‘A’ category, and would then drop further into the ‘BBB’ category by 2020. In 2025, U.S. fiscal indicators would have weakened to an extent that they would be more typical of performances currently associated with speculative-grade sovereigns.”) I come to the conclusion that Senator Voinovich is 100 percent accurate except for his statement that Standard & Poor’s is the one definitively concluding that “...U.S. Treasuries will lose their triple-A credit rating.”
Standard & Poor’s is not outright stating that will happen, rather, it is indicating that such an outome is possible in a hypothetical projection or simulation it is making, if conditions continue exactly as they are.
“Government complacency,” as S&P refers to it, cannot be ruled out as impossible, however. As an example, I have consistently pointed out in my writings that no major candidate for President that I am aware of, has forthrightly dealt with this problem or presented a realistic solution to deal with it.
To me that is more than complacency, that is denial and hiding the truth.
The fact that it is possible that U.S. Securities could go from the highest credit rating to one of the worst in a matter of a decade or so, if government public finances and the commitments made to the Baby Boomers are not addressed, is one of the reasons why the country’s top government accountants, Mr. David M. Walker is openly, desperately, and angrily stating that America is facing a “fiscal tsunami,” and that “the federal government is on a ‘burning platform.’”
Are we spiritually, economically, politically and culturally preparing as we should for such a dramatic and life-and-death scenario?
I don’t think so.
The last post was from 2008 and from a right-wing source----here is mainstream media telling us the same thing. We know all pensions, all our US Treasury and municipal bonds, all 401ks for main street are tied to this junk bond market----and the 95% will again be the ones feeling all the loss---
The 5% of Americans working with Wall Street to orchestrate all this-----the Wall Street pols and their Wall Street Development non-profits---will be included in this economic loss of wealth because it will take all investments----hit our community banks----so that 5% who have weathered past crashes will be with the rest of Americans.
SEE WHY PAWN SHOPS AND ALL TV ADS OVER THESE SEVERAL YEARS TO BUY GOLD OCCURRED?
Retirement retirement income
Junk Bond Selloff Is a Warning for Retirees Who Reached for Yield
Risky assets have paid off well the past few years. But tremors in the junk bond market signal time for a gut check.
In July, Federal Reserve Chief Janet Yellen warned of the “stretched” values of junk bonds. Few seemed to care, and among the unconcerned were millions of retirees who had reached for these bonds’ higher yields in order to maintain their lifestyle. Now, a reckoning may be at hand.
Yellen’s mid-summer warning on asset prices was reminiscent of the former Fed chief Alan Greenspan’s “irrational exuberance” comment regarding stock prices in 1996. Few listened then, either. It turns out that the Greenspan warning was way early. But the dotcom collapse hit later with devastating results.
Yellen’s remarks may be timelier. High-risk, high-yield corporate bond prices have been falling amid the strongest selling in 18 months. Since June, investors have pulled $22 billion out of the market and prices have dropped 8%. The pace of the decline has quickened since October.
The junk bond selloff began in the energy sector, where oil prices recently hitting a five-year low set off alarms about the future profits—and ability to make bond payments—of some energy companies. In the past month, the selling has spread throughout the junk-bond universe, as mutual fund managers have had to sell to meet redemptions and as worries about further losses in a possibly stalling global economy have gathered steam.
The broad decline means that junk bond investors have little or no gain to show for the risks they have been taking this year. Investors may have collected generous interest payments, and so not really felt the sting of the selloff. But the value of their bonds has fallen from, say, $1,000 to $920. The risk is that prices fall further and, in a period of global economic weakness, that issuers default on their interest payments.
Retirees have been reaching for yield in junk bonds and other relatively risky assets since the financial crisis, which presumably is partly what prompted Yellen’s warning last summer. It’s hard to place blame with retirees. The 10-year Treasury bond yield fell below 2% for a while and remains deeply depressed by historical standards. By stepping up to the higher risks of junk bonds, retirees could get 5% or more and live like it was 10 years ago. Many also flocked to dividend-paying stocks.
So far, taking these risks has generally worked out. Junk bonds returned 7.44% last year and 15.8% in 2012, according to Barclays, as reported in The Wall Street Journal. Meanwhile, stocks have been on a tear. But the backup in junk bond prices this fall should serve as a warning: Companies that pay a high yield on their bonds—and many that pay a fat stock dividend—do so because they are at greater risk of defaulting or going bust. That’s the downside of reaching for yield, and it doesn’t go away even in a diversified mutual fund.
To understand where US Wall Street global pols took our nation, state, and US cities one needs to go back to 2008 and watch the nation of Greece. It's pols did to Greece what American pols did to the US these several years----Greece was imploded with sovereign debt none of which was needed----and it was the first nation having a developed world status to be taken to IMF as a third world debtor. Again, Greece was a MODEL for bringing Europe, US, and other developed nations to third world status----and the US today looks just as Greece did in 2007 just as the 2008 economic crash hit both Europe and US.
Americans need to take the time to see what Europe's version of Wall Street and the World Bank has done to Greece----the bailout was deliberately set so all the banks, investment firms were insured against any losses----the rich in Greece were allowed to exit with all their wealth as this system of moving all control of the nation went to the IMF and global banks. Greek citizens had no power----and have tried since then to elect left-leaning candidates wanting to fight against global banks---
NONE OF GREECE'S DEBT WAS BROUGHT BY THE CITIZENS---IT WAS ALL GLOBAL DEVELOPERS PARTNERED WITH GLOBAL BANKS AND INVESTMENT FIRMS ALLOWED TO LOAD THE NATION WITH DEBT AS HAS OCCURRED UNDER OBAMA----
This is to where US Congress, Maryland Assembly, and Baltimore City Hall took the US and we will be hearing national and local media now using these same economic terms in the US and Baltimore---- Citizens in Maryland and Baltimore as with my friends across the US must now look at the leaders in our city who pushed for this vote for PUGH and Hillary AND GET NEW LEADERSHIP----OR CREATE NEW JUSTICE ORGANIZATIONS AS WE GEAR UP FOR THIS NEXT FIGHT.
What happens if Greece defaults on its International Monetary Fund loans?Cash-starved Athens has resorted to extraordinary measures to avoid defaulting to the IMF. But what would be the fall-out of a disorderly default?
No county has ever defaulted to the Fund in its 70-year history
By Mehreen Khan
8:00AM BST 30 Jun 2015
The Greek government faces the prospect of becoming the first developed nation to ever default on its international obligations.
After a harrowing five months, and in a drama of soft deadlines, the cash-strapped government now faces a €1.55bn payment to the International Monetary Fund due at 11pm tonight.
With negotiations have broken off in dramatic fashion last week, a cacophony of voices on Syriza's Left have vowed to prioritise domestic obligations unless creditors finally unlock the remainder of its €240bn bail-out programme. Greece only avoided going bust earlier this month after the government has asked for a Zambia-style debt bundling which will now be due on June 30.
The rhetoric is a far cry from February, when Greece's finance minister pledged his government would "squeeze blood out of a stone" to meet its obligations to the Fund.
Greece owes €9.7bn to the IMF this year. Missing any instalment to the IMF would see the country fall into an arrears process, unprecedented for a developed world debtor.
Although no nation has ever officially defaulted on its obligations in the post-Bretton Woods era, Greece would join an ignominious list of war-torn nations and international pariahs who have failed to pay back the Fund on time.
What happens after a default?
In choosing to bundle up four separate June repayments, Greece avoided triggering an immediate default.
But in the event of a delayed repayment, according to IMF protocol, Greece could be afforded a 30-day grace period, during which it would be urged to pay back the money as soon as possible, and before Ms Lagarde notifies her executive board of the late payment.
However, with talks have broken down in acrimonious fashion between the country and its creditors, Ms Lagarde has said she will renege on this and notify her board "immediately".
Having spooked creditors and the markets of the possibility of a fatal breach of the sanctity of monetary union, Greece may well stump up the cash if an agreement to release the country more emergency aid is reached (that's looking increasingly unlikely however).
But should no money be forthcoming however, the arrears process may well extend indefinitely.
Greece's other creditor burden would also start piling up, with the government due to pay another €6.6bn to the European Central Bank in July and August.
Stopping the cash
Although the exact process is uncertain, falling into a protracted arrears procedure could have major consequences for continued financial assistance from Greece's other creditors - the European Central Bank and European Commission.
"If Greece defaults to the IMF, then they are considered to be in default to the rest of the eurozone," says Raoul Ruparel, head of economic research at Open Europe.
The terms of Greece's existing bail-out programme stipulate that a default to the IMF would automatically constitute a default on the country's European rescue loans.
"Such a scenario would risk the European Financial Stability Facility (EFSF) cancelling all or part of its facility or even declaring the principal amount of the loan to be due immediately," say analysts at Bank of America Merrill Lynch.
Should the EFSF take such a decisive move, it could activate a range of cross default clauses on Greek government bonds held by private investors and the ECB. These clauses state a default to one creditor institution applies to all.
The political and market damage that may ensue would be substantial. Popular sentiment in creditor nations would turn against the errant Greeks, while the position of the ECB in particular could quickly come under the spotlight.
The central bank has kept Greek banks on a tight leash, maintaining that it would only restore normal lending operations to the country once "conditions for a successful completion of the programme are in place".
A wave of defaults may force the ECB into finally pulling the plug on the emergency assistance it has been providing in ever larger doses since February.
Scrambling for funds
Whatever the outcome, Greece on many measures, is all but bankrupt.
In addition to the half a billion euros plus it owes the Fund this month, the Leftist government will still be paying back the IMF until 2030. In total, its repayment schedule stretches out over the next 42 years to 2057.
It starts with not being able to access money and then it becomes about the inflation/deflation that makes money lose so much value that ordinary citizens will not be able to access wealth assets. The economy already stagnant becomes non-existent and what was left of the public sector is completely dismantled and pensions evaporate---except for of course the Baltimore City Hall pols. Mass hunger and homeless in Greece have once stable citizens looking like an add for third world Cambodia or Somolia. Baltimore already exists with surrounding communities being described this way----now we will see the rest of Baltimore follow suit. Remember, those communities at the city line having a stable, small business economy and lots of green are slated to be extended interstate highway and off-ramps if not global corporate campuses so we will see what took Baltimore's city center expand outward to Greater Baltimore.
People will eventually access their accounts---once the banks have seized a portion to STABILIZE TOO BIG TO FAIL WALL STREET BANKS----but that will be followed by the spiraling effects of Bernanke's FED manipulations on interest rates and inflation----no longer able to be controlled.
“It is like being in a war without weapons,” sighed Alex Aggelopoulos, who runs the Aldemar resort, a chain of hotels in Crete, Rhodes and the Peloponnese.
Of course the liquidity and funding support will pour to the global corporate campuses and national chains as small businesses are left again without financial resources.
This is just last year folks after several years of IMF/global investment firm attachment-
'The Greek economy is dying, dying before the eyes of its people. A credit squeeze that began with the imposition of capital controls has, eight days on, assumed the terrifying spectre of cash reserves drying up. In less than a week, banknotes of €5, €10 and €20 have become almost extinct; so, too, have €1 coins. “There are a lot of us out there now walking the streets in tears,” said Papaconstantinou. “We just can’t believe that at this stage of our lives this is what we have come to.”'
Greek citizens: 'It's like being in a war without weapons'
As cash becomes more scarce and supermarket shelves empty, Greek people increasingly fear the onset of a siege mentality
Greek pensioners queue with others in Thessaloniki to withdraw money from their accounts.
Photograph: Nikos Arvanitidis/EPAHelena Smith in Athens
Monday 6 July 2015 15.22 EDT Last modified on Monday 6 July 2015 19.01 EDT
It started with the ATMs. At 11pm on Saturday, several simply stopped dispensing cash. Perplexed at first, Mahi Papaconstantinou moved from one to the next, her blood pressure rising a little as she discovered that each one was blocked.
Panicked, the retired civil servant then got in her car and headed across Athens towards home. This time she was lucky. “I thought, thank God, €50,” she said, shaking her head in disbelief.
Greek referendum: optimism fades as eurozone says gulf has widened
The Greek economy is dying, dying before the eyes of its people. A credit squeeze that began with the imposition of capital controls has, eight days on, assumed the terrifying spectre of cash reserves drying up. In less than a week, banknotes of €5, €10 and €20 have become almost extinct; so, too, have €1 coins. “There are a lot of us out there now walking the streets in tears,” said Papaconstantinou. “We just can’t believe that at this stage of our lives this is what we have come to.”
The restrictions, enforced to prevent a collapse of the banking system, were meant to end along with the closure of Greek banks on Tuesday. But at 7pm on Monday, barely 24 hours after the nation rebuffed the idea of further austerity in a referendum that has sent shockwaves through Europe, the Greek Bank Association announced that neither would happen. The cap on ATM withdrawals – a €60 limit reduced to €50 because of smaller denominations running out – would also remain.
People line up at an ATM machine outside a bank in Athens today. Photograph: Milos Bicanski/Getty Images“Our economy is slowly dying, it is in intensive care,” the economist Dimitris Athanasopoulos told SKAI TV amid fears that Greece was now heading for a fully fledged banking crisis. “On every level it is sub-functioning.”
From the flower markets of Thessaloniki to the beach bars of Crete, the effects, are being felt. “We’ve seen a huge drop [in trade] and because money is so scarce, credit cards are almost always being used,” said Dimitris Vgengopoulos, cap on head, smile to the ready as he served customers in Meliartos, a pie shop within view of the Acropolis. “The bill might be €1 in total but they still use their cards.”
The dramatic drop in consumption has brought production to a halt. An inability to source supplies because of the ban on bank transfers has had a devastating effect on imports. Factories have shut, shops have closed and companies are increasingly electing to put staff on enforced leave.
Issuing a dramatic cri de coeur, the head of the National Confederation of Hellenic Commerce implored the prime minister, Alexis Tsipras, to “save Greece”. As the umbrella organisation representing some 280,000 small- and medium-sized businesses, the confederation has been especially hard hit by the controls.
“The damage that has occurred with the closure of banks is incalculable,” wrote Vasilis Korkidis in a letter released on Monday.
He appealed for the leftist-led government to agree to a solution that would stave off insolvency in the form of a financial lifeline from the European Union and the International Monetary Fund.
“The economy is sinking, as one Greek to another, I am sending you a heartfelt message of anguish,” he wrote. “Ignore the voices in your party … respect the sacrifices of the Greek people … and at all costs save the country from bankruptcy.”
Time is now of the essence. If banks collapse, the economy goes with them. On Friday, three days before his resignation, the country’s flamboyant finance minister, Yanis Varoufakis, acknowledged that “paper money” would start to be a problem as of this week. Many worry that with credit card overload, the system could crash.
“A preliminary agreement really needs to be signed in the next two to three days,” said Nikos Vettas, general director of the Foundation of Economic and Industrial Research. “If it is not signed, the cash will run out because the ECB [European Central Bank] won’t be able to keep up emergency liquidity assistance. People have been very calm, very civilised, but if they go to the supermarket and cannot find food to put on the table for their families the likelihood is they will become less so.”
Panic buying has already caused shortages in drugs and foodstuffs nationwide, prompting Greeks to rush to buy up staple products.
“I’ve stocked up on coffee and pulses and rice, batteries and soap,” said Papaconstantinou. “After the no vote everyone I know is fearful of the worst; euro exit now looks so possible.”
Pharmacies in central Athens on Monday reported shortages in drugs, including cancer medication.
Growing numbers now speak of survival instincts creating a “siege mentality”.
The tourist industry – Greece’s biggest foreign exchange earner, bringing in more than €30bn a year – has experienced cancellations and a large drop in last-minute bookings. In a country suffering from record levels of unemployment, the sector is vital for jobs, employing one in five over the summer months.
“This time last year we had around 120,000 last-minute bookings a day. Now, with all this, we are down to around 70,000,” said Xenophon Petropoulos at the Greek Tourism Confederation. “As soon as there is an agreement it will turn around but right now there’s concern.”
Hoteliers are not taking any chances, with many of them stockpiling too.
“It is like being in a war without weapons,” sighed Alex Aggelopoulos, who runs the Aldemar resort, a chain of hotels in Crete, Rhodes and the Peloponnese. “We’ve stocked up on meat in particular as 70% of it comes from abroad, and food and beverages,” he said. “We’re keeping our suppliers happy with cash. We’re not taking any chances.”
There's the global corporate term----SUSTAINABILITY----which simply means we are moving International Economic Zones and global free markets into Peru--------'to adopt the Sustainable Development Goals, which include calls for more climate-friendly industrial policy'.
THERE GOES THE ENVIRONMENT------'the World Bank has been heavily criticized for its very poor record on implementing environmental safeguards'. This is the global corporate tribunal----
The IMF and World Bank to Push Neoliberalism at Peru Meetings
Published 7 October 2015
The international financial insitutions have come under fire for not prioritizing human rights and environmental safeguards with their lending practices.Peru is hosting the 2015 annual meetings of the World Bank Group and the International Monetary Fund, making it the first Latin American country to do so since 1967.
The annual meetings, which take place Oct. 9-11, bring together finance ministers, central bankers, private sector executives, civil society representatives, and academics to assess global economic and financial issues.
The meetings are being held on the heels of a recent U.N. summit to adopt the Sustainable Development Goals, which include calls for more climate-friendly industrial policy.
RELATED: Blood Money – The World Bank and IMF in Latin America
During the weekend-long event, IMF and World Bank representatives will discuss amounts of climate aid to developing countries, targeted to reach US$100 billion per year by 2020.
Over the past decade, the World Bank has launched various pilot programs, including Climate Investment Funds, which aim to provide financial assistance to developing countries to combat climate change.
Despite these efforts, the World Bank has been heavily criticized for its very poor record on implementing environmental safeguards.
If you were to look at this list of US cities tied to soaring debt vehicles like Baltimore's bond leverage debt and other Wall Street financial instruments you will see a pattern----almost all are designated US International Economic Zone cities and all are likely filled with these same Wall Street Baltimore Development/'justice' organizations that pedaled all that debt----or toxic fraud. With the US Treasury in $20 trillion of debt and more----financial analysts have for years been saying NO FEDERAL FUNDING RESCUE OF CITIES HEADING TO BANKRUPTCY----what will come later as STIMULUS----will be that infrastructure funding sent to global corporations to take all public infrastructure and build out more global corporate campuses.
'The causes are government officials and corporate executives who borrowed too much easy money plus Wall Street bankers and hedge fund vultures who lent too much easy money'.
The article below shows something else----it shows that most of the remaining corporations in the US still considered AMERICAN-----meaning not MULTI-NATIONAL----and they are the ones listed on the US stock exchange with main street investors tied to their stocks----HAVE LOADED THEMSELVES WITH DEBT AS WELL----these major US corporations will be sent into bankruptcy as will your stock holdings---as will community banks-----leaving only multi-national corporations and global Wall Street the only viable economy---and that fits with the goal of US International Economic Zones being the only economic activity in the US.
PLEASE GOOGLE THIS BECAUSE THE ARTICLE WAS TOO LONG TO POST---IT SHOWS THE MAJOR US CORPORATIONS LOADED WITH CORPORATE BOND DEBT THAT WILL BE TAKEN DOWN---AND IT IS IN WHAT MANY AMERICANS ARE INVESTED.
This has been known and followed for years----all politicians know it as well----and joined in the implosion with our municipal bond debt. This will be the ultimate consolidation of all US corporations to global corporations as they will be there to merge these failing US corporations to global corporations.
This will be the ultimate consolidation of all US corporations to global corporations as they will be there to merge these failing US corporations to global corporations......we watched as executives at these healthy US corporations loaded with massive corporate bond debt while refusing to grow and stimulate the economy with real employment and industry.
September 23, 2015
Waiting for Collapse: USA Debt Bombs Bursting
by William Edstrom
It’s been so easy the past 15 years for local governments in the USA, state governments, government authorities, corporations, banks, hedge funds and the US Federal government to simply say how many millions, billions or trillions of dollars they wanted, pay some high priced call accountants to fill out some paperwork with fine print and voila, millions, billions and trillions of dollars in borrowed money simply appeared. It has been that easy!
Now, the government in the USA owes $46 trillion, US corporations owe $15 trillion, US individuals owe $13 trillion plus there are $315 trillion in outstanding Wall Street derivatives. (Few Americans know what a derivative is, but we as a nation are on the hook for up to $315 trillion in additional debt because of these derivatives.) These debt figures continue to escalate with each passing month.
Detroit and Puerto Rico have only just begun the debt bombs bursting in the USA, the USA’s slow motion economic collapse. Who’s next? I’m going to tell you about some US local and state governments that have too much debt and are ripe for debt collapse along with a few US government authorities and corporations that borrowed too much money and are also ripe for debt collapse.
Mr. Dudley of the New York Federal Reserve Bank recently warned of a wave of US municipal debt collapses coming soon. The problem is bigger than solely US municipalities as Mr. Dudley no doubt is aware. Chicago or LA, which one is more likely to collapse first? Chicago. Kanakee County IL or Perry County KY? Kanakee County is more likely to go belly up first. Atlantic City (AC) or Yonkers? AC is more likely to bite the dust first. 1 out of 25 states are ready to collapse within months, as are 1 out of 20 US cities, 1 out of 15 US government authorities and 1 out of 7 US corporations. Within a few years, many US cities, counties, authorities, states and corporations will have debt collapsed, before the USA as a nation debt collapses. A tsunami of debt collapses is hitting the USA. The causes are government officials and corporate executives who borrowed too much easy money plus Wall Street bankers and hedge fund vultures who lent too much easy money.
Besides city, county and state collapses, there will also be school debt collapses, hospital debt collapses, government authority debt collapses, individual bankruptcies, corporate debt collapses and finally the nationwide debt collapse of the USA. If change cannot be brought about fast – like increasing revenue (e.g. raising taxes on the rich) or cutting spending (e.g. ending endless war, cutting military/intel spending) or both – then, the best way forward may be to evacuate. Get away from the places about to collapse as quickly as you can. If you find your home is burning to the ground, as I discovered one Sunday evening in New York City in the Summer of 2011, what are you going to do? Evacuate.
Much of the data about which collapses are forecast to come first, second, third and so forth are from financial data, spreadsheets, credit ratings, revenue vs. debt calculations and the like. These are projections, they are not cast in stone. Any corporation, any individual, any part of government in the USA can stop borrowing too much money and can start paying off the debts they owe anytime they feel like it.
Most likely to be first up to collapse are some US cities like Atlantic City NJ, Chicago IL, Newark NJ and Paterson NJ. If you’ve studied cost accounting at a graduate level, did cost accounting work and you look at publicly available financial data from these cities, it’s like looking at nightmare on main street parts I, II, III and IV about to happen.
The next set of cities most likely to collapse include: Arkansas City KS, Asbury Park NJ, Brownwood TX, Coralville IA, Fairfield IA, La Feria TX, Lockport NY, Maple Heights OH, North Las Vegas NV, Philadephia PA and Poughkeepsie NY.
US cities most likely to collapse next include: Baltimore MD, East Pennsboro PA, Erie PA, Houston TX, Jersey City NJ, Kearny NJ, New Orleans LA, Union City NJ and Yonkers NY. Most likely to be followed by: Bristol VA, Buffalo NY, Carroll IA, Central Falls RI, Eastlake OH, East Chicago IN, Los Angeles CA, Monessen PA, Niles OH, Orlando FL, Phoenix AZ, Pittsburgh PA, Providence RI, Robstown TX, Taylor MI, Toledo OH, Tulare CA, Two Rivers WI, Washington DC, West Haven CT, Williston ND and Woonsocket RI.
Counties most likely to collapse first include Kanakee County IL and Perry County KY. BASF’s decision, in September 2015, to close their nylon and epoxy unit at their Kanakee IL factory is yet another accelerant to the debt collapse of Kanakee County IL. Most likely to be followed by the economic collapses of Allegheny County PA, Baxter County, AR, Boyd County KY, Cullman County AL, Dutchess County NY, Essex County NJ, Gilchrist County FL, Harris County TX, Passaic County NJ, Putnam County MO, Rockland County NY, San Bernadino County CA and Wayne County MI.
Without a doubt, the State of Illinois is the US state most likely to collapse first. Followed by, most likely, New Jersey. Tied for 3rd place for US states most likely to collapse are: Arizona, California, Kentucky and Michigan. Tied for 7th place: Alabama, Arkansas, Colorado, Connecticut, Hawaii, Louisiana, Maine, Mississippi, Montana, Nevada, New Hampshire, New York, Pennsylvania, Rhode Island, West Virginia and Wisconsin.
The severity of this debt collapse around in the USA, coupled with the impotence of the US government, the emperor has no clothes, their inability to mount a rescue of the US economy – because Fed Funds interest rates have been at 0% since December 2008, and cannot be lowered, and because the US Treasury already printed $4.5 trillion out of thin air (QE1, QE2 & QE3); more money printing on that scale will lead to hyper-inflation which will cause the US dollar to become worthless – will accelerate the economic collapse of the USA and worse. An example of worse is an increased likelihood of states such as Texas seceding from the Union.
Vast cultural differences between US regions – like the Rockies, Midwest, Northeast, Southeast and West Coast – will be exacerbated during the USA’s economic collapse 2016-2021, which will increase the likelihood of states or even entire regions seceding from the overly-indebted economically collapsing USA. State defiance of national laws (e.g. marijuana laws) coupled with the far right movement (e.g. Tea Party, Libertarian Party) has set the stage for secession fever to catch fire against the capitol district, Washington DC.
The next article in this USA debt bombs bursting series will cover more on the likely sequence of events such as pension cutting, more lethal health care rationing, escalating unemployment, rising crime, increasing hunger, more Americans freezing to death each winter, possible deflation followed by hyper-inflation, wars, etc. – events which could make the Deagle Inc. economic forecast for the USA more plausible. The main focus of this article is limited primarily to places likely to collapse first before the entire nation, the USA, economically collapses.
Many government authorities will collapse including many schools, school districts and hospitals. Among the most likely authorities to collapse first are the East Liverpool City Hospital in Ohio, Citrus Memorial Hospital in Citrus County FL, the Detroit Public Schools, Pontiac City MI public schools and some universities like Ashland University in Ohio, Dowling College in NY, Franklin Pierce University in NH, the Detroit Academy of Arts and Sciences and the University of Puerto Rico (UPR). Many universities, public and private, have done borrowing through state dormitory authorities blurring the line between private and public, and leaving taxpayers on the hook for much of the debt that many universities took out for luxurious new dormitories, new gyms, etc.
Student loans guaranteed by the US Federal government are at $1.3 trillion and climbing fast. A higher than ever number of graduates are unable to find work in their majors. The labor participation rate among US adults is 63% employed and 37% unemployed. The US unemployment rate will ratchet up much higher than 37% in 2016, 2017 and subsequent years as the slow motion USA debt collapse climaxes with the entire nation’s final economic collapse, like a house of cards blown away in a cool summer breeze. Like domino’s falling, city by city, corporation by corporation, government authority by government authority and state by state until the entire nation, the USA, debt collapses.
Higher education in the USA is a bubble. That bubble is bursting. Universities most likely to financially collapse and scale back (or close down) first include Ashland, Dowling, Detroit Academy of Arts and Sciences, Franklin Pierce and UPR. The next set of US colleges and universities most likely to financially collapse include: Bellarmine University (KY), College of Saint Rose (NY), Delaware Valley College (PA), Dominican University of California, Drew University (NJ), Lake Forest College (IL), Mills College (CA), Morehouse College (GA) and the University of Sacred Heart (PR). The wave of US colleges and universities most likely to financially collapse next include Beloit College (WI), Canisius College (NY), the New York Institute of Technology, the University of West Hartford (CT) and US News top-tier ranked Yeshiva University in NYC.
Yeshiva University’s potential collapse may be caused more from Bernie Madoff’s ponzi scheme debts, that university’s “investments” in Madoff’s ponzi schemes, and their bad timing to have not gotten out in just in the nick of time.
The USA’s debts are increasingly being compared to ponzi schemes like Madoff’s ponzi schemes. More Elderly Americans getting stiffed out of pensions they were promised. More creditors are getting screwed out the money owed to them. The US government’s $46+ trillion in debts will soon turn out to be the largest ponzi scheme ever in human history.
Public school districts most likely to collapse next include: Charleroi Area School District(SD) in PA, East Allegheny SD in PA, Frazier SD in PA and York City SD also in PA. Next most likely to financially collapse school districts include: Lake County SD in IL, Coatesville Area SD in PA, East Ramapo SD in NY, McLean SD in MD, Odem-Edroy Independent SD in TX, Pocono Mountain SD in PA, Reading SD in PA and Manatee County SD in FL.
Elementary and Secondary school is legally mandated in the USA, so it’s unclear what the outcomes to the tsunami of public school district bankruptcies will be. Will teacher to student ratios mushroom up to more than 50 students in each classroom? Will these school districts stop paying for books, food and buses? What will happen to teacher pay and benefits? Will the quality of teaching decline even further in the USA? The USA has been falling in international educational rankings for decades now, how low can the quality of education in the USA get? Will teachers get stiffed out of their pensions, Detroit style?
There is also a healthcare bubble in the USA with average physician salaries at $187,200, an intentional shortage of physicians in the USA (only 850,000; far fewer physicians per 1,000 people than in most nations), many new blockbuster drugs – like Sovaldi – costing $85,000 per patient or more, bankrupting hospital stays often exceeding $5,000 per day and a decades long wave of hospital closings nationwide leaving the USA exceedingly unprepared for a pandemic or biological crisis. Many US hospitals, in the best of economic times (2010 – 2014), were already routinely reporting Emergency Room waits of more than 24 hours. How long can ER waits get in the USA? And with an acute shortage of both hospital beds and doctors in many areas, what will happen in the USA in the event of a crisis? The USA’s greed ridden healthcare system is too woefully fragile for words.
The hospitals most likely to financially collapse next include: Blue Mountain Hospital District in OR, East Texas Medical Center Regional Healthcare Systems, Guadalupe Regional Medical Center in TX, Indiana County Hospital Authority in PA, West Jefferson Medical Center in LA and Whidbey Island Public Hospital District in WA.
The most likely next wave of hospitals to financially collapse include Clarendon Hospital District in SC, Community Medical Center in Montana, Eisenhower Medical Center in CA, Exeter Hospital in NH, Friendship Village Assisted Living Facility in Columbus OH, Holyoke Medical Center in MA (Romneycare land), Hopkins County Hospital District in TX, San Antonio Community Hospital in Upland CA and Wood County Hospital Association in OH.
Millions of Americans will have to travel further, in many instances, many more miles (kilometers) further, in the event of a ‘minutes make a life or death difference’ healthcare crisis. The looming wave of hospital debt collapses and closings will result in delays for millions of Americans to get emergency care which will result in many more Americans dying each year because they cannot get the healthcare they need in time. Is this intentional on the part of US government planners to save money? Or is it due to ignorance and a depraved indifference to human life (the human lives of US citizens) on the part of US government officials.
Many of the too expensive Obamacare deductibles are not being paid, Medicaid cuts and the political talk of turning Medicare into a voucher system, that is a system of coupons for health care discounts, will accelerate hospital bankruptcies and closings around America, resulting in many more deadly delays for Americans in the USA trying to get healthcare just in the nick of time. None of the hospitals on the above list of endangered hospitals are in the areas where the richest 10% of Americans live. Ditto for endangered school districts.
The Rostaver Township Sewage Authority in PA is also on the verge of financial collapse. One of the largest municipal bankruptcies in the past decade, the Jefferson County AL bankruptcy, traces back to an expensive sewage system financed in that county.
The San Joaquin Hills Corridor Transportation Authority has $2.1 billion in debt for a 12 mile stretch of toll road (Route 73) in Orange County CA. Overly optimistic toll revenue projections fell short and this is yet another government authority on the verge of debt collapse. Who’s going to pay $2.1 billion plus interest and fees for that 12 mile stretch of road?
1 out of 7 corporate bonds are classified as junk with a high risk of imminent default. Many of these corporations are Fortune 1000 corporations on the verge of financial collapse during the USA’s current financial nosedive.
If you have followed my posts these several years we know this corporate bond debt was deliberate-----the FED reduced to 0% its lending rate and Wall Street banks lent to US corporations 'free money' in bonds which these corporations then spent expanding overseas. These several years would have seen US corporations forced to grow jobs and industry in the US to keep afloat but the FED's 'free 0% money' created this corporate bond bubble that will burst with this coming bond market collapse and economic crash. Keep in mind---the executives who are supposed to protect shareholders KNOW this and they were allowed to deliberately do a BAINS CAPITAL on their own large US corporations----loading it with debt just to bring into bankruptcy and we will see assets moved to global multi-national corporations locating in our US International Economic Zone cities. This is why I shouted years ago that the US stock market will be gone----as once this happens---multi-national corporations have no need to list publicly---IPOs.
When I say the $15 an hour is progressive posing in these US International Economic Zones like Baltimore---this is why----Baltimore's entire economy will be tied to a few global corporate campuses that will be exempt from all US, state, and local laws---including labor laws---and that is why Wall Street global corporations and their pols orchestrated this massive corporate and municipal bond fraud=====and it is fraud====because corporate executives cannot conspire against their shareholders and our Federal, state, and city pols cannot conspire against citizens and taxpayers to deliberately create MASSIVE HARM.
'1 out of 7 corporate bonds are classified as junk with a high risk of imminent default. Many of these corporations are Fortune 1000 corporations on the verge of financial collapse during the USA’s current financial nosedive'.
The Clintons and Wall Street love to tout themselves as SMART PEOPLE in orchestrating the demise of America-----but ANYONE can be a mobster----people taking the low road to fraud and corruption are almost always people who would not succeed competing on equal ground-----and all of this was fraud driven by the 1% and installed by 5% of American citizens working for Wall Street----the pols and Wall Street Baltimore Development 'justice' organization leaders. Politicians not working for Wall Street would have been shouting throughout this process as I was---to make it difficult to create these deals---it was their silence in not educating the American people that AIDED AND ABETTING these crimes.
This is the exact modus operandus the IMF and World Bank has been using overseas for decades in bringing other nations' into debt and bankruptcy and VOILA----they brought it to our US cities and corporations.
Too Much Debt + Too Little Cash = Most Distressed Pain Since ’08
July 14, 2015 — 10:55 AM EDT
Peabody Energy's Gateway Coal Mine near Coulterville, Ill.
Photographer: Seth Perlman/AP Photo
If a company has too much debt and too little income, it’s going to struggle to pay its bills, regardless of when its bonds come due.
This is a lesson that investors are learning as distressed U.S. bonds suffer their worst performance since 2008. The notes have plunged 7.5 percent so far this year and 3.2 percent this month alone, with some of the biggest losers being the debt of Lightstream Resources Ltd., Peabody Energy Corp. and Cliffs Natural Resources Inc., according to Bank of America Merill Lynch index data.
It’s a painful wakeup call for investors who’ve gotten used to high-yield debt being synonymous with big returns in an era of unprecedented Federal Reserve stimulus. Even as companies have pushed back debt maturities and lowered interest expenses, that doesn’t mean they can continue to work magic in the face of a slowing world economy and oil prices that have fallen 51 percent since the 2014 peak.
“It seems to us that focusing too much on the maturity wall is probably unhelpful” for determining when corporate defaults will spike up, wrote Ara Lovitt, who manages the GMO Credit Opportunities Fund, a distressed-debt hedge fund at GMO LLC, in a report this month. “Based on the experience of the last three credit cycles, there seem to have been much larger forces at work.”
Indeed, the speculative-grade default rate has already begun ticking up from historically low levels, even though most existing corporate bonds don’t have to be repaid for another four years or more. Take American Eagle Energy Company, which filed for bankruptcy after missing the first coupon on a bond it issued just seven months earlier.
The corporation is “a recent winner of the credit market’s version of the NCAA (as in ‘No Coupon At All’),” Lovitt wrote.
Standard & Poor’s calculates the energy and natural resources default rate at 6.9 percent for the past 12 months from 4 percent six months earlier, and UBS AG analysts expect the rate to accelerate.
“How high will energy default rates go?” UBS analysts Matthew Mish and Stephen Caprio wrote in a July 9 report. “We have been very consistent on this question: 10 to 15 percent by mid-2016.”
The pool of distressed U.S. corporate bonds, typically those yielding more than 10 percentage points above benchmarks, has swelled to $127 billion, from the low last year of $43.7 billion, Bank of America Merrill Lynch index data show. This month alone, Peabody Energy’s $4.8 billion of bonds have fallen 14.9 percent, while Cliffs Natural Resources’s $2.5 billion of notes have declined 14.6 percent.
The most-indebted companies are generally more vulnerable to hiccups, such as oil prices that have fallen to about $52 a barrel from as high as $61.82 last month.
The International Monetary Fund this month downgraded its forecast for global growth, and China’s facing a roller coaster in its stock market, as economists forecast its slowest annual expansion since 1990.
There’s a reason the highest-yielding U.S. bonds are called distressed.