Things Fall Apart

Things fall apart and man made systems meltdown, no matter the changes to vocabulary or syntax. Lip service has been paid by our leaders but we are left will a bill payable in our national currency.

The US dollar broke critical support of 76.40 on March 17th. The next level of support is 74.25 from November and December 2009. Leaving the final support level at 71.20 from April 2008, mind you, this level was only held after trillions of dollars of stimulus were injected into the financial system.



JP Morgan Chase & Company, market cap $182,.5 billion (shareholder equity estimated at $175 billion), cash holdings of $700 billion (liabilities of $1,.94 trillion), trading at 12 times earnings with a derivatives book of roughly $80 trillion. They are not an exception, this a common balance sheet structure for the largest Federal Reserve shareholders. The financials received band-aids for their life threatening cancer and were released from the hospital to go back to work the next day.



The United States national debt has increased over $1.3 trillion since my last post referencing the figure. Currently over $14.2 trillion, that is an increase of more than 10% in less than 12 months! At this rate in less than 10 years, the national debt would be above $37 trillion, leaving every taxpayer (assuming the same structure) with an involuntary a debt of $330,000. Unfunded liabilities currently $113 trillion and growing. Behind the smoke and mirrors we know going in debt $3 or $4 to gain $1 in GDP growth is obviously not a recovery. As the Middle East is enraged in revolutionary fervor and ongoing inflationary pressure should push oil past it's last high and likely nearing $200 in under 24 months (leaving less capital to flow into the small business driven consumer economy). As taxes and interest rates rise a greater reduction in tax receipts and even less money in the hands of those who create US jobs.



State tax revenue is down roughly 10% across the board. State pensions are unfunded and need new money to pay into the ponzi scheme in order to stay afloat and pay out all who paid in. Over 15 major US cities and over 15 states face serious problems funding their Utopian dream that turned into a Keynesian nightmare. The fundamentals for most US states grows worse by the day.

If I had to sum up the economics crisis in a single sentence, I would say: "the debt system has turned on its patrons in order to provide a monetary system the patrons may not be willing to accept otherwise."

If I had to sum up the economics crisis in two words I would say "derivatives" and "liabilities."