Chilling Scenario of the End of America Foretold
by Bill Sardi: Should
You Save Your Money or Hide It Under The Mattress?
Coburn creates a chilling "end of the world as we know it"
scenario in his recent book The
Debt Bomb (Thomas Nelson 2012, 349 pages, indexed). The
CIA should take note. Maybe it already has.
Senator Coburn’s fictional crisis that begins on August 4, 2014
in Tokyo where a large mutual fund is holding a meeting there along
with dozens of private funds and representatives from foreign governments.
The mutual fund is a large buyer of U.S. Treasury Bills that fund
U.S. debt spending.
mutual fund, frustrated that the U.S. has failed to cut spending,
fears the Federal Reserve will print more money to inflate itself
out of repaying its debts in full to holders of its IOUs (U.S. T-bills).
The head of the Japanese mutual fund openly espouses a sell-off
of U.S Treasury Bills "before the Americans have a chance to
devalue their currency any further."
some of the smartest investors in America had also declined to buy
U.S. Treasury bills, the Japanese mutual fund officially votes to
sell off its T-bills, which makes the newswires that morning in
response is calm. But then another large fund in Asia also sells
its holding in U.S. T-bills and by that afternoon Singapore releases
its holdings as well. By then the European markets open and every
major private firm is in a frenzy to unload their T-bills. Japan
itself, the second largest holder of U.S debt, unloads its T-bills
while China elects to wait it out.
In the dark
of night, U.S. officials are awakened to a financial crash of unprecedented
proportion. The newly elected Republican President, awakened at
his vacation home, emphatically responds: "there will be no
bailouts on my watch."
to a day more memorable than the JFK assassination or the 911 terrorist
attacks – everything they own has now lost a third of its value
compared to other currencies.
At a White
House press conference the President says the fundamentals of the
U.S. economy remain strong and everything will be all right. Then
the Wall Street markets open and the Dow loses 10 percent of its
value in minutes, so trading is halted for an hour. When trading
resumes the Dow falls another 20 percent, prompting Americans to
head for ATM machines. Bank websites begin to crash, and an orderly
coast-to-coast bank run is in progress.
A week into
the crisis the dollar loses 50% of its value and oil rises from
$80 to $240 a barrel.
of mass layoffs, anguished American workers take to the streets
and reach for matches. Whole city blocks are now going up in flames
from city to city. The National Guard is called into action to restore
problem that confronts government is that tax receipts to the Treasury
plummet and with a government already operating on borrowed money,
largely from Japan and China, there aren’t sufficient reserves to
issue Social Security pension checks, make Medicare payments and
pay for all the other federal entitlements.
community offers loans but only under the condition that reforms
be immediately put into place. The great and mighty United States
of America is now taking orders from overseas to put reforms into
practice it had resisted for many years. The U.S. becomes Greece
II. Retirement age will immediately begin at age 72. Social Security
taxes will double.
economy drags along for three more years, with unemployment hitting
a high of 24%.
Two years later
the People’s Republic of China, staging a naval exercise in the
Taiwan Strait, suddenly heads directly for Taiwan. The U.S. threatens
military action but the Chinese respond they will dump our T-bills
if we interfere.
The great false
god of government has failed. The other false god of paper money
has also failed. The long-held notion that Americans’ manifest destiny
is to be the most abundant nation in the world is dashed.
the CIA hasn’t read Dr. Tom Coburn’s book. The above is a fictional
scenario. But Senator Tom Coburn says: "the end can come quickly,"
even for great nations he says.
Coburn’s scenario reveals how the most advanced country in the world
can be brought to its knees by debt. Senator Coburn quotes Admiral
Mike Mullen who says: "Our national debt is our biggest national
This is why
America hears reports of body bags being purchased by the Department
of Homeland Security. Why spying drones now fill air space above
America. Why FEMA internment camps are being prepared. American
anticipates insurrection when its populace discovers it is insolvent.
realize the many trump cards America holds against competing economies
of the world. America holds the most powerful military, the world’s
largest economy, the world’s reserve currency and the largest consumer
market in the world, by far. But these competitive advantages lose
their power when a nation is in un-repayable debt.
There are many
examples of how the U.S. uses these trump cards. For instance, when
the EURO was first created as the currency of a united Europe, the
Japanese Diet (legislature) began toying with the idea of buying
EUROS instead of dollars. The Japanese wanted to see how America
would respond to this idea.
respond to this by placing a limit on imports of Japanese-made goods,
such as cars and cameras, or invoke import duties in response to
a turn from the dollar to the EURO. But it chose a different way
to demonstrate its displeasure over the idea of Japan buying EUROS
The very next
week North Korea fired a missile over Japan, into the sea. That
was America’s way of saying "go ahead, see who defends you."
The Japanese never bought any EUROS.
As the U.S.
approaches an official default in paying back $1 trillion to Japan,
or the more covert way of printing money to inflate away its debt,
this would surely trigger many suicides among Japanese women who
manage family finances and whose banked money has been used to buy
U.S. T-bills. Fortunately, the weakening of the EURO has reduced
the threat of Japan opting out of dollars.
example of U.S. might, a few years back the U.S. was attempting
to persuade a South American nation to sign an agreement. That nation
shipped a boatload of grapes to a U.S. port, which was suddenly
quarantined by U.S. customs officials because of reported E. coli
contamination. Unless that nation complied with the wishes of the
U.S., those grapes were going to rot in port. If nations want access
to the giant U.S. consumer economy, they had better play by our
But with rising
personal incomes, China, Brazil and India are due to develop consumer
economies that could rival that of the U.S., and the U.S. could
no longer throw its weight around. This seems inevitable.
Clinton Presidency, the U.S. shipped nuclear missiles to China.
Right-wing critics declared these missiles were aimed at U.S. targets.
President Clinton had supplied China these missiles to balance power.
Russia and India, which flank China geographically, had nuclear
weapons, China did not.
if China actually did launch these missiles at U.S. targets on its
West Coast, such as Seattle, San Francisco and Los Angeles. The
U.S. wouldn’t necessarily have to retaliate militarily. All the
U.S. would have to do is cease to ship food to China and millions
of Chinese would starve to death. The U.S. is the breadbasket of
the world and can produce food even cheaper than countries like
China, which have lower labor costs. Food can be used strategically.
of State Hilary Clinton almost laughably threatened China unless
the value of the Chinese currency, the yuan, was allowed to float
higher. This would make U.S. goods relatively cheaper on the world
of the threat by Secretary Clinton involved movement of U.S. submarines
closer to China’s coast. What silliness. Again, all the U.S. need
do is slow shipment of food to China. But with the U.S. being such
a debtor nation, the U.S. can’t play this card and risk having its
exports tumble and its balance of trade look more miserable than
it already is. Debtor nations lose power.
Factbook, the world supply of money (M1 = currency + demand
deposits) grew from $24.07 to $26.34 trillion from 2010 to 2011
while world population grew by 80 million (+$325,000 per newborn),
so it is obvious the world is attempting to meet its financial obligations
by printing money rather than creating value, with resultant inflation
of 4.9% worldwide (the rate at which the value of saved or loaned
money erodes annually). Unless the interest on banked money exceeds
the rate of inflation (which
occurs in only 11 of 31 major countries surveyed), over time
the purchasing power of savings erodes. Wealth accumulation will
All of the
nations of the world generate $78.95 trillion in Gross Domestic
Product (2011) and have an aggregate budget deficit of -4.1% of
GDP or about $3 trillion.
headed to a $123
trillion economy by 2050 (3 times greater than the U.S) as some
predict, there will certainly be a change in the world balance of
If any single
thing brings down the world economies it would be a financial instrument
called a derivative.
are where parties share their risk (place a bet) on future assets,
such as when a wheat farmer sells a contract to a miller for cash
that specifies an amount of wheat he will deliver in the future
to the miller. Both parties reduce risk but if the wheat never materializes
due to crop failure, the entire contract can be wiped out.
value of these shared-risk derivatives in the world exceeds
total global gross domestic product by a factor of 10. In 2010 these
derivative contracts totaled $1.2
quadrillion, 20 times the size of the world economy at that
Via these derivatives,
the whole world economy has become a casino where bets (derivative
contracts) are made on events in the future. Derivatives were illegal
in the United States between 1936 and 1983.
Tarpley describes derivatives as black holes of financial engineering
that can easily consume all the physical wealth and all the money
in the world. Derivatives thrust the world into a surreal scenario
where fictional capital is created outside of the realm of real
production. Mr. Tarpley is calling on a worldwide freeze of these
derivatives to rescue the world economies from impending collapse.
contracts are ice cream, then credit default swaps are the cherries
on top. Credit
default swaps, a financial agreement in existence since the
1990s, where the seller will compensate the buyer in the event of
a loan default or other credit event. This type of insurance plan,
if you want to call it that, serves to drag the whole financial
world into its unregulated morass. Credit default swaps outstanding
were estimated at $62.2 trillion just prior to the 2008 financial
meltdown and fell to about $26.2 trillion by mid-2010 and are about
$25.2 trillion today (2012).
It’s easy to
forget that bankers have only one thing to sell – debt. When they
oversell it, the world pays a price – this time, the most terrible
price – the collapse of all wealth. Then only bankers will accumulate
great wealth, which is the present situation.
are lured into un-repayable debt into order to deliver on political
promises, which then results in onerous taxes on the wealthy, which
in turn robs the economy of needed capital for growth, debtor nations
face more than stagflation, they face a regressive standard of living.
Forget more costly advances like nanotechnology in medicine, like
driverless cars for more safe and reliable transportation, and clean
energy via solar generation, consumers won’t be able to afford them.
Bicycles, home-grown food, and some yet to-be-invented economical
form of home power generation appears to be part of a more realistic
quotations from Thomas Jefferson are sobering:
incumbent on every generation to pay its own debts as it goes.
A principle which if acted on would save one-half the wars of
the world." ~ Letter
to Antoine Louis Claude Destutt de Tracy, 1820.
place economy among the first and most important virtues, and
public debt as the greatest of dangers to be feared. To preserve
our independence, we must not let our rulers load us with perpetual
debt." ~ Letter to William Plumer, 1816
As far back
as the Bible, sages warned of the pitfalls of becoming a debtor
the LORD your God has blessed you, as he promised you, you will
lend to many nations, but you will not borrow…" (Deuteronomy
who reside among you will rise above you higher and higher, but
you will sink lower and lower. They will lend to you, but you
will not lend to them. They will be the head, but you will be
the tail. (Deuteronomy 28: 43-44)
As the Biblical
prophets have said: "Poverty and disgrace are for those who ignore
instruction." (Proverbs 13:18; Isaiah 48:18)
reduction, a dire future awaits America. Politicians who propose
to raise taxes to fix the problem only mire the nation in greater
debt (slavery) and push off to some indefinite date in the near
future when the "debt bomb" is even larger.
him mail] is a frequent writer on health and political
topics. His health writings can be found at www.naturalhealthlibrarian.com.
latest book is Downsizing
© 2012 Bill Sardi Word of Knowledge Agency, San Dimas, California.
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