Where have we heard this before?

Associated Press reports that the world powers seek to contain the European debt crisis.  Wow.  This time they are really serious I bet.  Notorious con man and circus barker Timmy Geithner chimed in that "the debt crisis posed the most serious threat to the global economy and that failure to take bold action raised the risk of domino-style defaults by heavily indebted European countries".  So Tim, you mean that the PIIGS are too big to fail?   Oh.  Where have we heard that before?  Yes, the markets are telling governments "give us more free money on the backs of the taxpayer or we will take our ball and go home".

OK, granted that if the Eurozone collapses then others will follow suit.  I'm not arguing that there will be some other outcome (in fact I believe there can be no other outcome).  So what's the "fix" for all of this carnage?  The article paraphrases Timmy as saying that "the European Central Bank should try to ensure that governments pursuing sound reforms could get loans at affordable rates and that European banks have access to the capital they need to operate."

What Timmy is saying is that if the ECB will just continue to engineer the loaning of endless amounts of new money to those who have already proven that they cannot possibly repay what they have already borrowed then we can all call it a day on this global meltdown thing.  Of course, that is what Timmy has been saying all along about everything and everyone and he has yet to be correct.  In fact, there is no way he can possibly be correct given the amount of bad debt that is already baked into the global economic fractional reserve lending scam.  There are very few reserves anymore.  It's all un-backed debt and Wimpy Promises now.  In other words, it's all one big pack of lies and it has been so for a long time.  This is the nature of the confidence game.  Are you getting it yet?  This were no accident folks.  It be an inside job.

So that's our choice now.  Continue printing and borrowing and loaning lest the debt Ponzi collapse.  Of course, anyone with any sense at all can see that this is inherently unsustainable and so it will eventually collapse under its own corrupt weight no matter what anyone does.  By continuing to prop it up the coming bust is only being made worse.  I say again: there is no possibility of a "soft landing" anymore.  Debt levels have just gotten too high globally on the books of the biggest powers.  Debt to GDP ratio of 100% used to be the stuff of 3rd world nations.  Now almost all western nations are there if you account properly instead of playing a shell game with the debt, Japan is at 200% GDP and soon we will find that in order to bail out their housing bubbles, China, Australia and Canada will also have to admit massive indebtedness.

So Timmy is out there fighting for the world, right?  He just wants things to get better so we can all live better lives.  Or is there some other reason he keeps poking his little pinhead into the situation?  Let me ask you something.  Do you think Angela Merkel's efforts to save the EuroPonzi are being done for the benefit of Greece?  How about for the benefit of the German people?  Hopefully you have figured out that in both cases the answer is "no".  Merkel doesn't care about the PIIGS at all.  And her actions prove she couldn't care less about the hard working German people.  She keeps loading them up with guarantees and stimulus and loans to deadbeats.  The Dark Queen Merkel cares only about herself and keeping her unwarranted position of power.  She is, in fact, afraid of what will happen to her if the German people are ever allowed to find out just how badly she has sold them down the river in the name of saving herself.

Geithner is no different.  He doesn't care about Germany or the Eurozone or Americans or anything else except keeping the corrupt status quo power structure intact.  How knows that when the Eurozone collapses then it's going to threaten USD hegemony as everyone scrambles to create new monetary systems that anyone can have any trust in.  I suspect that the smaller countries will eventually realize that they are better off with an honest money supply and they will return to gold standards one by one.   Yes, this will create strong currencies for them that will mean they will have trouble exporting and so they will be among the first to abandon the game of trying to use exports as a profit generation mechanism.  When that happens, those who were paying for their lifestyles with debt will no longer have anyone who will accept debt as payment.  Once the concept of accepting debt as payment collapses globally, then and only then will we see what the new world order looks like. 

This may seem an impossible situation but I see it as not only possible but likely.  We've had a debt mania over the last 80 years.  As it collapses, lots of people are going to lose everything and it won't just be poor people.  It will be rich, connected people as well (do you think it was only poor people who got screwed in the 1700s as a result of the collapse of the South Sea Company?).  Here's what we can expect to figure out as a people over the next 10-20 years:

• The root cause of 90+ % of the problems in the world today is the result of dishonest money supply consisting of fiat currency and fractional reserve credit (which is currently very near zero reserve credit).  Without this fraudulent system, no scam artist could ever leverage up big time and take the profits if the gamble pays off or dump the losses on the taxpayer if he loses.  The current system not only enables this behavior, it encourages and even rewards it.
• 70+% of government programs are in fact mathematically set up as Ponzi schemes whereby it takes increasing amounts of debt or taxation to fund them so that at some point the money they require to operate can no longer be borrowed or taxed.  At that point they collapse.
• The stock market is in large part a Ponzi scheme driven by a combination of the Boomer population bubble and government's efforts to relieve them of their money in the form of being funneled into 401k and other government controlled retirement programs.  People will eventually realize that when all other debt based wealth collapses, greedy government will have no other choice but to steal the retirement savings of the patsies.  If you are laughing at this statement then you are in denial.  If I was a morals-free con man running the show this is exactly the future I would have in store for you and the con men running the show are far more devious than I can ever be.  If I can think it up, they have already done so and have implemented plans 30 years ago to make it happen.
• All government debt is a scam.  Honest government must be paid for by taxes in real time and if that is not happening then the people are just fooling themselves.
• All fiat currency is a scam. Scams always end up collapsing either because the targeted patsies have been fleeced to the bare skin or because they have gotten wise and refuse to participate anymore.   Some fiat currencies are less abused than others by their governments but as we can see with the Swiss Franc being tied to the Euro, even that safety is an illusion.

So what to do?  Well, the dollar is going to look better for a little while as Euroland melts down but soon enough Congress will step in and debase it again.  Congress HAS to do this because even as a net importer we are too dependent on exports for our revenue stream.  If the dollar strengthens too much then it will push employment way beyond the current 9% and in fact I suspect that before things get better the US unemployment rate could get past 20%.  In other words, depression, not recession.  As the largest credit bubble in the history of man goes bust, how can we expect anything less than a massive bust?  Under these conditions, Congress will tell Bernanke (or whatever new con man they put in charge) to fire up the printing presses.  They will use the fact that we control the world's reserve currency until we are no longer the world's reserve currency.  Let gold run the course of its current (and not unexpected) pullback and then keep getting out of dollars for the long run.  Forget the short term turbulence and volatility.  Gold is money and nothing else is.  He who has the gold will eventually be the one making the rules.  Note that gold is not losing buying power relative to commodities.  Oil is falling too and stocks outside the big headline names have gotten whacked worse than Great Depression levels.  If you want to see what that looks like, check out the solar stocks right now.  It's a blood bath for them.