Barack Obama Doubles US Marketable Debt in 5 Years

On July 3, 2008 -- the day before Independence Day -- Barack Obama said that adding $4 trillion in debt was irresponsible and "unpatriotic.



The marketable debt of the U.S. government has more than doubled–climbing by 106 percent–while President Barack Obama has been in office, increasing from $5,749,916,000,000 at the end of January 2009 to $11,825,322,000,000 at the end of January 2014, according to the U.S. Treasury’s latest.

During the eight-year presidency of George W. Bush, the marketable debt of the U.S. government almost doubled–climbing 93 percent–from $2,977,328,000,000 at the end of January 2001 to $5,749,916,000,000 at the end of January 2009.

International Forecaster Weekly: End of Year In Review 2013

Crush The Street and Viral News Network End of Year report for 2013 for the markets, currency, the fed, jobs, and the economy.

U.S. dollar collapse: Where is Germany's Gold?

By 2020, Germany wants 50% of its total gold reserves back in Frankfurt - including 300 tons from the Federal Reserve.


By Peter Schiff
The financial world was shocked this month by a demand from Germany’s Bundesbank to repatriate a large portion of its gold reserves held abroad. By 2020, Germany wants 50% of its total gold reserves back in Frankfurt - including 300 tons from the Federal Reserve. The Bundesbank’s announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany’s behalf. One cannot help but wonder if the refusal triggered the demand.

Either way, Germany appears to be waking up to a reality for which central banks around the world have been preparing: the dollar is no longer the world’s safe-haven asset and the US government is no longer a trustworthy banker for foreign nations. It looks like their fears are well-grounded, given the Fed’s seeming inability to return what is legally Germany’s gold in a timely manner. Germany is a developed and powerful nation with the second largest gold reserves in the world. If they can’t rely on Washington to keep its promises, who can?

The impact of Germany’s repatriation on the dollar revolves around an unanswered question: why will it take seven years to complete the transfer?

The popular explanation is that the Fed has already rehypothecated all of its gold holdings in the name of other countries. That is, the same mound of bullion is earmarked as collateral for a host of different lenders. Since the Fed depends on a fractional-reserve banking system for its very existence, it would not come as a surprise that it has become a fractional-reserve bank itself. If so, then perhaps Germany politely asked for a seven-year timeline in order to allow the Fed to save face, and to prevent other depositors from clamoring for their own gold back - a ‘run’ on the Fed.

Now, the Fed can always print more dollars and buy gold on the open market to make up for any shortfall, but such a move could substantially increase the price of gold. The last thing the Fed needs is another gold price spike reminding the world of the dollar’s decline.

None of these theories are substantiated, but no matter how you slice it, Germany’s request for its gold does not bode well for the future of the dollar. In fact, the Bundesbank’s official statements are all you need to confirm the Germans’ waning faith in the US.

Last October, after the Bundesbank had requested an audit of its Fed holdings, Executive Board Member Carl-Ludwig Thiele was asked in an interview why the bank kept so much of Germany’s gold overseas. His response emphasized the importance of the dollar as the world’s reserve currency:

Thiele’s statement can lead us to only one conclusion: by keeping fewer reserves in the US, Germany foresees less future need for “US dollar-denominated liquidity.”"Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity.”

History Repeats

The whole situation mirrors the late 1960s, during a period that led up to the “Nixon Shock.” Back then, the world was on the Bretton Woods System - an attempt on the part of Western central bankers to pin the dollar to gold at a fixed rate, while still allowing the metal to trade privately as a commodity. This led to a gap between the market price of gold as a commodity and the official price available from the Treasury.

As the true value of gold separated further and further from its official rate, the world began to realize the system was unsustainable, and many suspected the US was not serious about maintaining a strong dollar. West Germany moved first on these fears by redeeming its dollar reserves for gold, followed by France, Switzerland, and others. This eventually culminated in Nixon “closing the gold window” in 1971 by ending any link between the dollar and gold. This “Nixon Shock” spurred chronic inflation throughout the ’70s and a concurrent rally in gold.


Perhaps the entire international community is thinking back to the ’60s, because Germany isn’t the only country maneuvering away from the dollar today. The Netherlands and Azerbaijan are also discussing repatriating their foreign gold holdings. And every month, we hear about central banks increasing gold reserves. The latest are Russia and Kazakhstan, but in the last year, countries from Brazil to Turkey have been adding to their gold holdings in order to diversify away from fiat currency reserves.


And don’t forget China. Once the biggest purchaser of US bonds, it is now a net seller of Treasuries, while simultaneously gobbling up gold. Some sources even claim that China has unofficially surpassed Germany as the second largest holder of gold in the world.

Unlike the ’60s, today there is no official gold window to close. There will be no reported “shock” indicator of a dollar flight. This demand by Germany may be the closest indicator we’re going to get. Placing blame where it’s due, let’s call it the “Bernanke Shock.”

It takes one to know one
In last month’s Gold Letter, I wrote about the three pillars supporting the US Treasury’s persistently low interest rates: the Fed, domestic investors, and foreign central banks – led by Japan. I examined how Japan’s plans to radically devalue the yen may undermine that country’s ability to continue buying Treasuries, which could cause the other pillars to become unstable as well.

While private investors and even the Fed might be deluding themselves into believing US bonds are still a viable investment, Germany’s repatriation news makes it clear that foreign governments are no longer buying the propaganda. And why should they? If anyone should appreciate the real constraints the US government is facing, it is other governments.


Our sovereign creditors know that Ben Bernanke and Barack Obama are just regular men in fancy suits. They know the Fed isn’t harboring some ingenious plan for raising interest rates while successfully selling back its worthless mortgage and government securities. Instead, the Fed is like a drug addict making any excuse to get its next fix.

US investors should be as shocked as the Bundesbank about the Fed’s deception. While we cannot redeem our dollars for gold with the Fed, we can still buy gold with them in the open market. As more investors and governments choose to save in precious metals, the dollar’s value will go into steeper and steeper decline – thereby driving more investors into metals. That’s when the virtuous circle upon which the dollar has coasted for a generation will quickly turn vicious.
Courtesy: Global Research

RUSSIA NOW WORLD’S BIGGEST GOLD BUYER (ADDED 570 METRIC TONS IN 10 YEARS!)

PUTIN ON THE RITZ

n September 2012, TheBlaze reported that Russian President Vladimir Putin had been grabbing up gold “as fast as he can get his hands on it.”

And since that initial report, he has only doubled his efforts.

“Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer,” Bloomberg notes.

“His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China,” the report adds. “The added gold is also almost triple the weight of the Statue of Liberty.”

For reference, here’s a chart illustrating the rapid growth in runner-up China’s gold holdings:

Courtesy Zero Hedge

“The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency,” said Evgeny Fedorov, a member of for Putin’s United Russia party, in a telephone interview with Bloomberg.

It’s definitely worth noting that the value of gold has jumped by nearly 400 percent since Putin began his gold-acquiring efforts.

Also, it’s widely believed that Putin – along with China, the Netherlands, and Germany – is merely reacting to global money-printing trends. That is, he is simply looking for a safer investment than the devaluing currencies of the EU and U.S.


“In 1998, the year Russia defaulted on $40 billion of domestic debt, it took as many as 28 barrels of crude to buy an ounce of gold,” Bloomberg notes.
“That ratio tumbled to 11.5 by the time Putin first came to power a year later and in 2005, after it touched 6.5 — less than half what it is now — the president told the central bank to buy,” the report adds.
Indeed, Putin has been actively and aggressively encouraging banks to invest in the precious metal. In fact, during a recent tour of the Magadan region in the Far East, the Russian president told Bank Rossii not to “shy away” from investing in gold.
“After all, they’re called gold and currency reserves for a reason,” Putin said, according to a Kremlin transcript.
Putin’s spokesman declined to comment of his boss’ interest in gold.
“While Putin is leading the gold rush in emerging markets, developed nations are liquidating,” according to the report.
“Switzerland unloaded the most in the past decade, 877 tons, an amount now worth about $48 billion, according to International Monetary Fund data through November. France was second with 589 tons, while Spain, the Netherlands and Portugal each sold more than 200 tons,” the report adds.
Still, when all is said and done, at approximately 958 tons, Russia’s gold holdings is only the eighth largest in the world, according to the World Gold Council.
“The U.S. is No. 1 with about 8,134 tons, followed by Germany with 3,391 tons and the Washington-based IMF with 2,814 tons,” the report notes. “Italy, France, China and Switzerland are fourth through seventh.
But at the rate that the Russian’s are snatching up gold, it’s not entirely unlikely that we’ll see a change in these standings soon.

Federal Reserve Bank admits they lost 9 Trillion Dollars!

Fed's Inspector General Elizabeth Coleman Missing Trillions of Taxpayers' Dollars in a Senate Hearing

Fed's Inspector General Elizabeth Coleman Missing Trillions of Taxpayers' Dollars

The Inspector General of the Federal Reserve in the video above acknowledges that trillions of dollars cannot be accounted for. The astonishing five-minute clip is taken from a Congressional hearing where Federal Reserve Inspector General Elizabeth Coleman is questioned by Congressman Alan Grayson of Florida on May 6th about huge amounts of money for which the Federal Reserve is responsible.

The Inspector General avoids answering almost every question asked by the Congressman. In fact, she appears in this video clip to know less about the finances of the Federal Reserve than Congressman Grayson.

Among the many important questions raised, Grayson requests information on the Bloomberg report that many trillion of dollars in credit have been extended by the Federal Reserve. When the Inspector General avoids answering, Grayson states, "If you're not responsible for investigating that, who is?" Once again, she avoids the question stating, "We've not gotten to a specific level of detail to really be in a position to respond to your question."

At another point, Coleman answers a further question with, "We are not in a position to say whether there are losses." Yet if the Inspector General of the Federal Reserve cannot account for trillions of dollars extended, who can? Grayson holds his composure very well throughout the questioning. He concludes, "I have to tell you honestly, I am shocked to find out that nobody at the Federal Reserve, including the Inspector General, is keeping track of [the unaccounted for trillions]."

U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs 

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

“We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

FLASH BACK 

9/10/2001: Rumsfeld says $2.3 TRILLION Missing from Pentagon

Obama Has Added $6 Trillion in Debt in One Term

Hi, I’m Senator John Thune from the great state of South Dakota.

With the recently passed fiscal cliff legislation, Congress enacted tax relief for 99 percent of Americans.

Now that the tax part of the fiscal cliff issue has been dealt with, it’s time to address the real cause of Washington’s fiscal mess— out-of-control spending.

Washington is addicted to spending your money.

Over the past four years, our country has added nearly $6 trillion to the national debt. At $16.4 trillion, our nation’s total debt is now larger than our entire economy.

This means that every man, woman, and child owes a $53,000 share of this debt. That level of spending is unsustainable. We cannot afford to keep adding over a trillion dollars to the debt every year, as we have for the past four years.

A major credit rating agency has already downgraded our nation’s credit once, and, if we don’t start making some real progress on spending reforms, more downgrades are likely in the near future.

What does that mean, practically speaking?

Well if you or I as citizens had a bad credit rating, banks would charge a higher interest rate when we approached them to borrow money.

It works the same way with nations. If the United States’ credit rating is further downgraded, our country will pay higher interest rates. This will mean trillions of borrowing in order for America to pay its bills.

Needless to say, we can’t go on like this forever. Eventually, we are simply going to run out of money. And no tax increase, no matter how high, will be enough to save us.

The only way—the only way—to dig ourselves out of this hole and put our country on a sound financial footing is to get spending under control.

Reducing our spending and debt will jump-start our economy and create jobs and opportunities for American families and workers.

And the way to start is by passing a budget.

I think most American families would agree that having a budget is essential to keeping their spending under control.

And if a budget is essential when you’re running a family, it’s even more essential when you’re running an entity the size of the federal government.

Congress’ first priority every year should be coming up with a spending plan. In fact, the law requires Congress to do just that. Yet, it’s been almost four years since the Democrat-led Senate passed a formal budget.

Top Senate Dems Who Urged Obama To Raise Debt Ceiling Unilaterally All Voted Against Increase In 2006

On Friday the Democratic leadership of the Senate — Majority Leader Harry Reid, Assistant Majority Leader Richard Durbin, Conference Chair Charles Schumer, and Conference Secretary Patty Murray — wrote to President Obama urging him to unilaterally raise the debt ceiling in the event that Republicans either block such an increase or attempt to pass one “as part of unbalanced or unreasonable legislation.”

“We believe that you must make clear that you will never allow our nation’s economy and reputation to be held hostage,” the Democrats wrote. “We believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without congressional approval, if necessary.”

Put aside the picture of leading lawmakers, usually so jealous of their constitutional prerogatives, asking the president to ignore Congress. What is striking about the letter is that every one of its signers — Reid, Durbin, Schumer, and Murray — voted against raising the nation’s debt ceiling just seven years ago.

Senator Obama calls Bush "unpatriotic" for adding trillions to debt