Forgive us our Debts... As we forgive those with Debts against us...

Perhaps the most controversial position I have taken where backlash seems the strongest in both emails and in public discourse is The Great RE-Boot. Where I simply stated that, "...the FED will simply forgive the USG of its debt obligations...The US dollar will remain the world's reserve currency, US debt to GDP ratio takes a multiple order of magnitude leap to the positive and no body gets hurt."

Much has happened since my posting of October and I present to you additional data from the recent Federal Reserve release to further the conversation:

Click to Enlarge

As you can see, the Federal Reserve of the United States now owns over 1/3 of the total debt obligations of the United States of America.  They have rapidly moved from #3 to #1 in the space of 3 short months!

The Argument:

1. The Federal Reserve creates US Dollars and gives them to the US Treasury to spend on the operations of the US Government.
2. The Federal Reserve accepts Treasury Bonds from the US Treasury.
3. The US Treasury is obligated to pay back the Federal Reserve the face value of the Treasury Bond plus interest.  This is how Government Debt is created.
4. Now if you loaned me money and I never pay you pack you lost your hard earned dollars.  However, if the US Government never pays back the Federal Reserve, the Fed loses nothing because they printed the dollars out of thin air.
5. When Federal Reserve forgives the US Treasury of its debt obligations there is an immediate and significant improvement in the US Debt to GDP ratio which strengthens the country financially.
6. And, more importantly, nothing bad happens to the US debt held by China, Japan, etc. because the US Government still will pay back the interest and principle on the bonds they hold.  IN FACT... they are in a better position to do so.

It's a great plan, and they are going to do it.  But not yet.  So don't worry and don't bet against America.



Interested In Expert Networks?

Are you getting information that is 3 to 4 months (maybe even a full year) in advance of the general public? Then you may be a member of a so-called “Expert Network”.


The Expert Network questionnaire (score 1 for yes, 0 for no):

Does your network host require that “you not email me from your place of employment?”
Does your network host say, “If you must email me from your place of employment you must use Secure Socket Layer encrypted browsing?”
Does your network host say that, “the same rules we apply to your employer also apply to your lawyer?”
Does your network host provide you with PGP keys that were generated by FIPS 140-1 compliant tokens?
Did you need a “Guide to Defeating Sovereign Censorware” to enable you to stream information beyond your country borders?
Do you need OTR messaging services?



SUBTOTAL: If you scored 4 or more, you are a member of an expert network.


IDIOT OFFSET: If your score is 4 or more, subtract 6 if you failed to capitalize financially on this information.



SCORING:

<0 see Punk
1 to 3 see Sweet Kid
4 or more see Veterano

Head Game / Head Fake / Dead Head

I am asking you to be optimistic.  These next 12 posts will be on optimism because I don't want you to miss the opportunities that lie in front of us no matter from what country you are reading this post.

Optimism yields creativity and innovation.  A pessimist never invented anything because, from their point of view, "Why invest the effort; there is no future!"....

I've travelled to many countries and the one common factor about news reporting is "If it bleeds; it leads".  That means, if the news is bad, people will pay attention to your report.  Good news attracts less eyes. 

That is why pessimists dominate the news.  And, people are willing to accept whatever they say without proof.  BUT.... put one optimist on the news and everyone is yelling, "Show me your data!".   Pessimists don't require data- only opinion.  Optimists must re-prove their position constantly and their data is always being challenged.

If you follow the markets, I am sure you have heard the following:

(1) The market is in a downward trend; don't invest now until we hit bottom. Better wait.

(2) The market is in an upward trend; if you didn't get in; wait until a pull back.

(3) We've just experienced a pull back but until we see strong signals to the contrary, we could see another leg down. Better to wait.

(4) The pullback was shortlived; those that waited missed the entry point. 

I could go on.  But you get the idea.  So what are you waiting for?  What is the piece of data you need to tell you everything is going to be "all right"?   When you finally get that data will you feel you waited too long?
The panic of 2008 is over....
(1) Get in.
(2) Get smart.
(3) Be smart.
(4) Be Optimistic.
(5) Keep Truckin.

Happy New Year - 2011

To the Western World and much of Asia Pacific (the double dippers who celebrate 2 new years), Happy New Year to you.

I've taken a few months off from Blogging and shortly I will be posting at least 12 new blog entries on finance and economics for the coming year and beyond.  But for today, I would like to share with you how my "Main Squeeze" and I welcomed the dawn of the next decade.

Here is a view from our backyard spa where we frequently welcome the dawn of a new day, listening to the local wild life and hoping to catch a glimpse of the family of white tail deer that live in our neighborhood.



Sunrise January 1, 2011

 The deer can be often seen down by the pond.  It is still snow covered and frozen over from the holiday snow storm.

Waiting for the White Tail Deer

For those of you in the market for a free standing spa, here is the Master SPA LSX it has been a great investment.  Out of courtesy to my readers, I have spared you the picture of me sitting in the spa!

Where TEDBITS composes.

I hope you did your own research and made some picks from my August 09 posting.  Everything really worked out except for the idea on TIPS.

All the best to my readers for the coming decade!