Morgan Stanley Says Government Defaults Inevitable
From Bloomberg via Drudge:
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Investors face defaults on government bonds given the burden of aging populations and the difficulty of increasing tax revenue, according to a Morgan Stanley executive director.
“Governments will impose a loss on some of their stakeholders,” Arnaud Mares in the firm’s London office wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” he wrote...
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Read the rest.
And when local and state governments start to default on their bonds, what do you think will happen with services such as police patrols?
On the other hand....
posted by Concerned American | 1:19 PM
5 Comments:
Police departments are already shutting down or curtailing their 'services' majorly. Saw on the news last night that one town said, "If your house has been broken into and you have been robbed, don't call us...we will not respond!"
Now, when you talk about cutting back police and also make owning a gun illegal, who is it that's going to arrest you for having an illegal weapon?
Or should I say, who is going to TRY and arrest you for having that illegal weapon?
Anyway, I have always gone by that old saw - When seconds count, the cops are only minutes away.
Cops? What cops? We ain't got no cops! We don' need no steenkin' cops!
Naturally, cops and firefighters will be the first to go.
Welfare payments? They'll continue long after their dollars are worthless.
Why?
Simple.
When the great cash-spigot dries up, you REALLY want to be someplace ELSE!!
DD
Hey, not to worry.
As long as the "Director for GLBT Community Outreach" remains on the job, all will be well.
From the article: "Rather than miss principal and interest payments, governments may choose a 'soft' default in which they pay back debts with devalued currencies resulting from faster inflation or force creditors to take lower returns,.."
“Outright sovereign default in large advanced economies remains an extremely unlikely outcome, in our view,” the report said."
This is how a "soft" default will occur: Short-term, low-yield T-bills will be converted into 30 year "Liberty Bonds" with the same low yield. This will save the government from having to roll over existing debt as rates rise.
At the same time, benefits to Social Security, Medicare/Medicaid recipients (and all other unfunded liabilities) will have their benefits frozen. The Treasury and Fed will provide unlimited "liquidity" to replace the bondholders who flee US treasuries.
The resultant inflationary spiral will reduce the burden of payments that the US Treasury now carries. Cute, ain't it?
MALTHUS
People often wonder why, when budgets MUST be cut, it's the cops & fire dept that're @ the top of the list WAAAAAAY before teachers, garbage collectors, sewage treatment, the 'arts' programs, G/L/B/T 'appreciation' programs, 'public assistance' programs, etc. One reason for this that I've yet to see presented is that when the first 2 services are threatened people get SCARED & believe whatever they're told & don't want to rock the boat. Another part of this scam involves the fear of being labeled racists/bigots/unsophisticated/selfish because they believe that protection from fire/criminals is more important than the services the pseudo-elites consider to be crucial. The 'educational' employees in particular take full advantage of being deemed a 'crititcal service' by bureaucrats, the public's general sentimentality about the teaching profession, & that the majority of people don't want to bother educating/can't educate their offspring. Objectively, these exploitations of modern human nature are beauts to see being worked, but ONLY objectively.
And the bad part is that such tactics work each & every time they're used. Imagine the shock of the govt if the citizenry told them to go ahead & cut everything but the fire depts, garbage/water treatment, & certain other govt functions. If only.
Cassandra (of Troy)
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