Preparing For the Coming US Debt Default Pt 1

Wednesday, July 27, 2011
By Paul Martin

by Phoenix Capital Research

We have officially entered Round Two of the Financial Crisis.

Round One took place from 2007-2008, consisting largely of private debt (derivatives, credit default swaps, etc) taking down private companies (banks, financials, insurance companies), etc. The US Government response to this was to nationalize various entities (mortgages, insurance, etc) and to shift this debt onto the public’s balance sheet.

The Fed and other Central Bankers like to dress these moves up in fancy language and financial terms, but in reality they all boil down to one of three strategies:

1) Printing money/ pumping it into bankrupt financial entities.
2) Shifting garbage assets from the private sector onto the public sector’s balance sheet.
3) Creating more debt

In plain terms, the world’s Central Bankers, particularly the US Federal Reserve, bet the farm that their countries could swallow trillions in garbage assets without bond investors catching on and demanding higher yields (interest rates).

They’re wrong.

Debt Defaults for the Holidays

The Rest…HERE

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