Tag Archives: Debt

Mullen: Washington ‘Doing Handstands’ as if Grave Problem of National Debt ‘Has Gone Away’

(PJ Media) — WASHINGTON — The former chairman of the Joint Chiefs of Staff said at a breakfast Tuesday in Washington that the national security implications of the national debt are keeping him up at night, even as budget negotiators are “doing handstands … as if the problem has gone away.”

Adm. Mike Mullen, who retired in 2011 after serving in parts of George W. Bush’s last term and President Obama’s first term, stressed at the Concerned Veterans for America event that “the military is part of the solution to better outcomes around the world, but on a higher level it’s really about economies.”

“If you can create some stability in a peaceful environment, people’s standard of living will improve and economies will start to thrive,” he said.

Mullen said he was “delighted” with the progress made through bipartisan budget and appropriations agreements in Congress, but “I worry that it sends the signal that it’s over.”

“We just can’t be the country that we are capable of… if we just keep spending ourselves into oblivion,” the four-star retired admiral warned. “It’s going to take sacrifice, quite frankly, on the part of everybody.”

Even for all of the complaints about defense eating up the budget, Mullen said pouring the entire Pentagon budget into the debt still would have “minimal impact” without entitlement reform.

That includes means testing for entitlements, which he said he’s happy to personally do. “Those who can afford a little more need to pay a little more, as far as I’m concerned,” he said, instead of a mentality of “they feel entitled to this whether they need it or not” or “‘you owe me this,’ whether or not you need it.”

The recent bipartisan cooperation is hopefully “a harbinger of steps to be taken in the future” on broader reform. “I would hope it’s the beginning of being able to turn it around.”

Within the Pentagon, he notes that the overhead has “grown enormously” over the past couple of decades. “The force is going to get a little smaller,” Mullen said, stressing that a budget-strapped department needs “to customize our force for the world we’re living in.”

“We have a bad history in this country of ignoring the lessons, then just moving forward and starting all over again,” he said.

In addition to the debt, four other issues weigh heavy on Mullen’s mind when worrying about the future of America.

One is K-12 education, where he believes one of the problems is teachers are “not valued in the country,” while another is the political paralysis in Washington. “I hope leadership in the country at large can figure out a way to get us moving in a positive direction before we have some catastrophic event,” he said.

Mullen also worries about cyber attacks and the ability of policy makers without technical backgrounds to understand the gravity of the threat. “I understand how lethal it is,” he said, noting that the hacking of Target customers’ credit card data “speaks to the scale of the capability in the cyber world.”

The fifth big challenge is caring for this nation’s veterans who are facing “very tough employment numbers” as well as health and education challenges — though he thinks the answer is found on a local scale instead of within Washington.

“I find this ‘sea of goodwill’ out there on the part of the American people; you need local leaders to galvanize that,” Mullen said, stressing that service members are “leaving at 1,000 a day, which is normal, and we’re hiring them at about 100 a day.”

But the admiral said it’s also important that the military retain the best of the best. “After every war we lose a lot of our best people… particularly as the economy improves, they’re going to leave,” he said. “We need to keep the best we have in the military.”

While it’s early to gauge the full impact of sequestration — “one of the areas I stay out of is Obamacare,” Mullen quipped — the recent fiscal uncertainty in the military may reverberate notably in retention numbers.

On the foreign policy front, Mullen said he’s concerned Obama’s pivot to Asia is giving a sense of U.S. retreat and withdrawal from other hot zones in the world.

“I’m very supportive of rebalance,” he said, noting “that’s an economic zone that feeds the world — it needs to be stable.”

“That said, the Middle East is not going away… I don’t think we can do it and not continue to focus on the Middle East.”

“We don’t need to get into a fight with China,” Mullen added. “That doesn’t mean it isn’t going to happen.”

Watching Iraq become infested with al-Qaeda again in Anbar province has left the former chairman “extremely disappointed” but “not shocked.”

On the National Security Agency, he said from what he saw the NSA was “complying with the law; they have the interest of the United States of America at the top of their list.”

“I hate what Snowden did. I think Snowden is a traitor,” Mullen said, adding that nevertheless he’s glad there’s a debate about security vs. privacy that ensued in the wake of Snowden’s revelations. “The threat’s not going away, the danger is out there, so how do we balance that?”

mullen

[H/T PJ Media]

CHINA NOW OWNS US (U.S.) WITH RECORD DEBT: Holdings of U.S. Treasuries Increased to $1.3 trillion in November

(Info Wars) — China’s holdings of U.S. Treasuries increased $12.2 billion to a record$1.317 trillion in November, data released on the Treasury Department’s website showed.

The figures, scheduled for release at 9 a.m. tomorrow in Washington, were inadvertently posted on the Treasury’s website. Japan’s holdings rose $12 billion to $1.186 trillion, the figures showed.

China’s swelling foreign-exchange reserves, reported today to have reached a world record $3.82 trillion at the end of December, may sustain the nation’s appetite for U.S. debt. Capital inflows and intervention to limit gains in the yuan have contributed to China building up currency holdings that are a third of the global total.

“Large interest-rate differential and steady appreciation of therenminbi contributed to large arbitrage inflows into China, a situation made all the more easy with China’s increasing financial integration and renminbi internationalization,” UBS AG Hong Kong-based economist Wang Taowrote in a report on China’s data.

China’s pace of foreign-exchange reserve accumulation will be slower this year due to the Federal Reserve’s monetary tapering, likely widening of the yuan’s trading band and tighter controls on arbitrage activities, Wang said.

Early Release

A Treasury spokeswoman said that because of an error, limited amounts of data were posted on the department’s website ahead of the official release, and were removed as soon as it was discovered. The full November 2013 data will be released as previously scheduled at 9 a.m. tomorrow, she said.

The yuan this week reached 6.0406 per dollar, the strongest since the government unified the official and market exchange rates at the end of 1993. The latest data on China’s foreign-currency holdings contrasted with Yi Gang, a deputy governor at the central bank, saying in November that it was “no longer in China’s favor to accumulate foreign-exchange reserves.’

The U.S. data showed net long-term portfolio investment outflow was $29.3 billion in November after a revised inflow the month before of $28.7 billion, the Treasury’s figures showed. The total cross-border outflow in November, including short-term securities such as Treasury bills and stock swaps, was $16.6 billion, after a revised inflow of $188.1 billion in October, the data showed.

The Standard & Poor’s 500 Index (SPX) gained 2.8 percent in November. Investors in Treasuries lost 0.4 percent that month, according to Bloomberg World Bond (BUSY) Indexes. The Bloomberg U.S. Dollar Index, a gauge of the greenback’s value against 10 major currencies weighted by liquidity and trade flows, gained 0.9 percent in November.

[H/T Bloomberg]

STUNNING: Chart Shows Today’s Stock Market Trend Eerily Reminiscent of 1929… Right Before Market Crash And Great Depression

[H/T Info Wars] — With the Holiday shopping season off to a slow start according to preliminary retail sales numbers and with the stock market sitting near all time highs, one can’t help but wonder what will happen when investors realize the economy isn’t really doing as well as we’ve been told by the experts.

Great Depression
The evidence suggests that we can expect devastating global economic changes in 2014 as a result of our national debt, further impoverishment of the working class, and massive new tax burdens resulting from President Obama’s health care legislation. The fundamentals, by most accounts, are indicative of an economy on the cusp of a total detonation within the next year.

Now, with the prospect of an abysmal shopping season for retailers because of tapped out consumers, the first quarter of 2014 could cause serious problems in financial markets as a result of lackluster performance in corporate earnings.

What’s more, the trajectory of our stock markets over the last eighteen months has been eerily reminiscent of markets back in 1929, right before the crash that led to a decade’s long depression in America.

Ken Jorgustin of Modern Survival Blog writes:

Is there a major financial crash in our near future? You must check out this stunning analogy between the current day Dow Jones Industrial Index compared with the time period 1928-1929 leading up to the memorable stock market crash…

The pattern of stock price movements looks VERY close to the lead-up to the 1929 top.

A lead-up to just any old top is one thing, but the 1929 top was followed by a memorable decline, which makes it all the more worthy of our attention…

Ken stops short of predicting that stock markets will do the same thing this January as they did in 1929, but take a look at this amazing comparison and decide for yourself if it’s possible that this whole thing will break wide open on or around January 14th of 2014:

Stock Market Crash in January

 

 

 

Famed Investor’s Dire Warning: ‘This Is Going to End Badly… Be Prepared, Be Worried, and Be Careful’

[H/T The Blaze] — Famed investor Jim Rodgers is predicting a disastrous scenario for the global economy. “Eventually, the whole world is going to collapse,” he told CBC in a recent interview.

Rodgers said “we in the West have staggering debts,” noting that the United States is the “largest debtor nation in the history of the world.”

“This is going to end badly,” he warned.

Zero Hedge breaks down Rodgers’ thoughts on the “commodity super-cycle” and increasing energy production through fracking:

However, the co-founder of Soros’ Quantum fund is convinced that the commodity super-cycle is far from over, but driven by supply constraints (and cost increases) as opposed to demand from higher growth. The following interview provides more color on his commodity view as he re-iterates his bullish stance on Ag (with sugar a focus) and Natural Gas (some harsh natural realities coming), warning “don’t get too excited about fracking,” when he talks energy products.

Rogers, in his inimitable way, sums up the state [of] euphoria that many markets find themselves in thus, “we are all floating around on a sea of artificial liquidity right now. This is not going to last.”

Rodgers went on to warn of the “next crisis,” which he predicted may occur in 2015 or 2016.

“The next correction when it comes, because the debt is so very high — you know, 2008 was worse than 2002 because the debt was so much higher. You wait until 2015 or 2016 when the next crisis hits… debt has gone through the roof, the next one’s gonna be really bad”

His advice: “Be prepared, be worried, and be careful.”

http://www.cbc.ca/video/swf/UberPlayer.swf?state=sharevideo&clipId=2422036568&width=480&height=322