Puerto RICO defaults on $470mn in bonds.

First off, I hope you enjoyed the capitalization of RICO in the post title.  It was a thinly veiled expression of my view that all organized government eventually turns into organized crime.  I don't mean each person filling out forms and ordering paper clips of course.  I'm only referring to the really big chunks of shit that float to the top of the government cesspool AND their complicit minions who knowingly do their illegal and immoral dirty work for pay.

In any case, Mike Malone has a video out today discussing the subject which is worth a watch.  Take time to pause the video and read all of US "treasury" (isn't a treasury supposed to have some money in it?  All we have is DEBT!!) secretary Jacob Lew's request for the federal government to get involved (AKA pick winners and losers) so that a fair wind down of their colossal debt can be achieved.  This is just after the part where he said the $70 bn is unpayable.  What an a$$hole.  There is no "fair" way to f--k people out of their owed money.

So Mr Lew is looking for the government to take money from someone in order to ensure that PR public worker's still get their retirement checks and so that special elite don't get stiffed on their General Obligation (GO) bonds which are supposedly beyond default.  Of course in a fair world, you have to live with your mistakes no matter how bad they are.  You don't get to make mistakes and then have your neighbor pay for them, do you?  I know I don't.  All my cockups have been on me (which is just the way I like it, thank you very much, since it is the feedback mechanism that keeps me on the straight and narrow-ish).

Please understand that Lew is a criminal and that he doesn't give two shits about anything or anyone except extending the global debt Ponzi at all costs.  He doesn't care that pumping it up only makes for a bigger collapse in the future.  He doesn't care about math, history or logic.  He only cares about keeping the Ponzi plates spinning.

I do agree with him on this though: letting PR default and not bailing out the GO bonds will send a big chill to the elite who store their big wealth in these "safe" debt instruments.  If they get the feeling that the people will not actually be enslaved in order to pay of these debts (which is the essential promise of all GO bonds...) then they will certainly take their illbegotten gains and exit stage left.

What these elite do not know is that once they do this they are no longer of any use to the herd.  The elite thus become not only expendable but better off dead.  At least in the eyes of the herd. This is the basis of the historical pitch fork revolution. 

The elite are not elite because of God given divinity.  They sit in their granite-clad halls of power at the pleasure of the herd.  And once the herd is in collapse you are going to see the horns come out.  But this time, the horns are filled with gunpowder and the new pitchfork is the AR-15 rifle.  Anyone who does not believe that the US could easily if not probably fall into another civil war is really out of touch with the fact that our kum-ba-ya society of tolerance is completely artificial and predicated on the false and temporary prosperity of bought at the expense of $20 TRILLION dollars of debt which was used to pull consumption forward before it was earned/produced. 

This WILL, WILL, WILL come home to roost.  I wish it didn't have to but there is no if, maybe, or perhaps that they can have a soft landing. It will collapse.  No doubt.  I do not claim to know the day and the hour and nobody else knows either because it is based on the mood of the herd.  But smart people are looking for the signs and they are preparing for the possibility in any way that they can reasonably afford to do so.