Financial Crisis 2016: High Yield Debt Tells Us That Just About EVERYTHING Is About To Collapse

Money Tornado - Public DomainDid you know that there are more than 1.8 trillion dollars worth of junk bonds outstanding in the United States alone?  With interest rates at record lows all over the world in recent years, investors that were starving for a decent return poured hundreds of billions of dollars into high yield debt (also known as junk bonds).  This created a giant bubble, but at first everything seemed to be going fine.  Defaults were very low and most investors were seeing a nice return.  But then the price of oil started crashing and the global economy began to slow down significantly.  Energy company debt makes up somewhere between 15 and 20 percent of the junk bond market, and the credit rating downgrades for that sector are coming fast and furious.  But it isn’t just the energy industry that is seeing a massive wave of defaults, debt restructurings and bankruptcy filings.  Just like with subprime mortgages in 2008, investors are starting to wake up and realize that the paper that they are holding is not worth a whole lot.  So now investors are rushing for the exits and we are starting to see panic on a level that we have not witnessed since the last financial crisis. (Read More...)

The Debt Bomb: 7,600,000,000,000 Dollars Of Debt Must Be Rolled Over In 2012

When it comes to government debt, it is not just new debt that is the problem.  Every single year, governments around the world must “roll over” gigantic mountains of debt that come due.  That means that the actual borrowing that takes place each year is far greater than the yearly budget deficits that you see talked about on television.  In 2012, a total of 7,600,000,000,000 dollars of debt must be rolled over by the G-7 nations, Brazil, Russia, India and China.  When you add in interest payments, that number rises to over $8 trillion.  And that does not even include any new borrowing that all of those nations will do in 2012.  This is a debt bomb that could devastate the entire global economy at any time.  Everything will be fine as long as global lenders are willing to lend these countries gigantic mountains of very cheap money.  But if that changes, and there are already a multitude of signs that a massive global credit crunch has begun, it will mean a complete and total financial nightmare for the entire world. (Read More...)

If You Are Against Raising The Debt Ceiling You Are Part Of Al-Qaeda?

Are you against raising the debt ceiling?  If so, according to former Bush Treasury Secretary Paul O’Neill you are actually part of al-Qaeda.  Yes, seriously.  During an interview on Bloomberg TV the other day, O’Neill actually made the following statement: “The people who are threatening not to pass the debt ceiling are our version of al-Qaeda terrorists. Really. They’re really putting our whole society at risk by threatening to round up 50 percent of the members of the Congress, who are looney, who would put our credit at risk.”  For a high ranking Bush administration official to equate Tea Party activists with al-Qaeda is extremely frightening.  Just remember what the Bush administration did to anyone supposedly associated with al-Qaeda.  They shipped them off to Guantanamo Bay and waterboarded them into oblivion.  It also shows how out of touch the Bush administration really was with the conservative base of the Republican Party.  The Bush administration ran up record setting deficit after record setting deficit and now any conservatives that dare to want some assurances that we are actually going to do something about our rampant debt problem are labeled as “al-Qaeda terrorists”.  Of course the Obama administration is essentially doing the exact same thing.  The current Treasury Secretary, Timothy Geithner, has been running around frothing at the mouth and declaring that we are going to experience financial armageddon if the debt ceiling is not raised.  This whole episode is yet another example that shows what a fraud the false left/right political paradigm in this country really is. (Read More...)

Glenn Beck And The Federal Reserve

Last Friday, Glenn Beck did an entire show on the Federal Reserve.  It had been a highly publicized show and many people were wondering how Beck was going to handle the subject.  Well, to his credit, the show actually contained a lot of truth and it was definitely anti-Federal Reserve.  Was the show perfect and 100% accurate?  No, not by a long shot.  But for a big name personality like Glenn Beck on a big cable network like Fox News to do an hour long show on why the Federal Reserve is bad is a very big deal.  Many of us in the alternative media have spent a lot of time bashing the mainstream media (and rightly so), but when someone does something right, we should applaud them for it.  The Federal Reserve was the topic for the entire show, and Beck and his guests discussed the creation of money, debt, the history of banking and the current financial problems of the United States.  Glenn Beck even had G. Edward Griffin on the show.  That was huge.  There is not usually much on the mainstream news worth getting excited about, but in this case Glenn Beck’s show on the Federal Reserve was a very good step forward, and hopefully more mainstream news programs will begin to feel comfortable with taking an honest look at the Federal Reserve. (Read More...)

Will A Decline In The Credit Rating Of U.S. Government Debt Lead To A Complete Financial Disaster?

Most Americans know that individuals have credit ratings, but many of them don’t realize that countries have credit ratings too, and that even a small dip in the credit rating of a nation can have a huge economic impact.  For decades, U.S. government debt has had a very, very high credit rating.  U.S. Treasuries were generally considered among the safest, if not the safest, investments in the world.  But that is starting to change.  Just this past week, Moody’s Investors Service said that the U.S. government has been running up so much debt that there is actually a danger that the credit rating of U.S. government debt could be downgraded at some point in the future.  That would make it significantly more expensive for the U.S. government to borrow more money, and it would cause interest on the U.S. national debt to skyrocket even further. (Read More...)