My prediction: War as political cover for default

OK, I've been thinking about this for well over a year and I feel like I maybe have a workable theory.

Please read this, then watch this:

At some point, the US government will have to default on its obligations. However, governments never, ever admit fault or failure. We didn't get where we are by "blindness", either. The current mess is the culmination of an frenzied orgy of government spending... the last hurrah.

Let's look at the mechanics of government borrowing over the last century. The basic formula is this - the central bank buys government bonds. In order to do this, it must print money. But the central bank is not the only purchaser of government bonds... if it were, then this would just be a really expensive way to expand the money supply. Instead, the government sells its bonds also to private investors and foreign sovereigns.

The idea is that these private investors are supposed to be a "check" or "indicator" on the government's borrowing... if it gets too carried away, investors will get scared away from bonds, bond rates will skyrocket and the government will be faced with steep interest payments and a dried-up market for its bonds. Despite ludicrous borrowing levels over the last decade, we haven't seen this happen to US government bonds. People have attributed it to "the strength of the dollar" or "the dollar as a safe-haven" but I think this is nonsense. A small basket of "second-tier" currencies (Euro, Yen, CHF, etc.) could not possibly be more vulnerable than the USD itself.

But what if the government wants to bypass this check? Well, all you have to do is convince the general public to borrow more for itself. The more that the private sector borrows, the bigger the market for bonds generally, and the longer the money-printing party can go on. The housing bubble is a perfect example of how this works. From 2001 to 2007, you have hot inflationary cash sloshing out of the Fed and seeking borrowers; with an attendant increase in government spending, debt and entitlements. The credit-worthiness of the US government isn't even a question at the time, though it should already have been being examined.

In 2008, the housing crisis hits and credit ratings go to the floor. By 2011, even the US government's credit-rating takes a ding. So what next? Well, they've been blowing up this college borrowing and this is the source of the next bubble. As crazy as it sounds, I believe even the 2012 end-of-the-world meme is being leveraged. To the extent that people believe such nonsense, it drives up their time-preference... the higher people's time-preference, the more amenable they are to spending and borrowing.

This tells me that 2012-2013 is, in fact, the target date for bringing down the house of cards. Your student debts aren't going to go away (unless you're killed in war) but the US government's debts will. And here's how.

First, they're going to pick a fight with Iran. They're going to embargo Iran, secretly send assassins into Iran to murder people, send intelligence agents in to corrupt Iranian leaders (they've been doing this for a long time), and then when they manage to get Iran to make a move, it will be game-on. They would prefer Iran to act of its own accord but if they have to, they'll just fake it, cf Gulf of Tonkin. Why else is that aircraft carrier parked there?

OK, so you have war with Iran... now what? Well, Iran's allies are Russia and China. Does the Pentagon really believe it can invade the whole world? No, I don't think even the "who needs brains when you've got balls?"-Pentagon is that retarded.

What they want is a surprise "defeat" of US forces at the hands of China/Russia. Such a defeat is pretty much baked into the cake. The moment we open hostilities against Iran, China's going to cut off our credit card. We might have the best military equipment in the world but with no fuel to put in the gas tanks and no money to buy food to put in the soldiers' mouths, what use is it? As mentioned in the article linked above, our aircraft carriers are stone-age monuments to the last war. They will disappear like trench-warfare did in WWII and all the military "experts" will be scratching their heads and then saying, "ohhhhhhhh, yeah, we're always preparing for the last war, duhhhh."

These drones are no different. They look good on paper. They are an economical way to replace existing, high-risk surveillance missions. But this is not how they're being used. I've had debates with a bonehead friend of mine speculating about fleets of drone armies clashing in WW3. This is science-fiction bullshit. Emphasis on fiction. Drones do not extend your capability, they merely can act as a substitute for costlier and riskier missions. It's economics. But the Pentagon doesn't know the first thing about economics. They live in a universe where spending $20 billion on another monument to WWII is all in a day's work.

So, my predictions:

• There is a war coming. I predict a trigger event by mid-2013 at the latest
• It will act as political cover for US default on its obligations: "Sorry, US public, it's not our fault we can't send your Social Security checks, the mean old Russians and Chinese imposed these cruel terms of settlement. By the way, we're going to have to tax you more to pay reparations to them."
• Look for tensions to increase to the breaking point towards the end of 2012... either Iran is eventually going to respond to our provocations or we're going to fake an Iranian response
• Once the "trigger event" has occurred, all hell will let loose. Look for a draft. Look for full-on war hysteria. Be smart, don't go into the streets and protest the war. Stay home and be careful what you post on the Internet.

Remember, the goal of the war is not defeat the enemy, it is to provide political cover for a default... look for some kind of "peace agreement" to be reached after the US quickly exhausts whatever little reserves it has to operate on and after some stinging defeats of its supposedly undefeatable military hardware (aircraft carriers, drones, stealth aircraft) are suffered at the hands of supposedly inferior Chinese/Russian equipment. A Sukhoi with a tank full of gas is a hell of a lot more dangerous than a B-2 bomber with empty fuel tanks sitting on the tarmac.

The open question is whether the Chinese/Russians might not take the opportunity to strike back when the US government has so greatly weakened itself.

Clayton -

This could happen, but I doubt that your prediction is an conscious plan by the U.S. Consider the Vietnam War. LBJ didn’t want to lose to RFK for giving up on JFK’s commitment to South Vietnam, so he continued U.S. involvement despite him having doubts about the war. Nixon could’ve gotten the same deal in 1969 that he got in 1972, but he didn’t want to lose a presidential election because South Vietnam fell. Read this opinion by Daniel Ellsberg, who made the Pentagon Papers public, to understand how U.S. policymakers, at the top, were very stubborn. That stubbornness cost billions of U.S. dollars, over 50,000 dead U.S. troops, and millions of dead Vietnamese.

As to the U.S. debt, I doubt that the Obama administration cares that much. It likely cares about its reelection, not the U.S. debt which is still being financed despite an unsound U.S. economy. Investors, misinformed by decades of economic nonsense, believe the U.S. is a safe haven. This goes back to the false story that the government stopped the Great Depression.  Right now, the European government debt crisis disturbs investors, not the U.S. I do not know what will happen.

Nice, Clayton. But I think there is a huge flaw. No govt will stage its own defeat. Just too humiliating.

As for how to repudiate social security, its very easy, really. Print and pay.

And if there is hyperinflation, why that's the fault of speculators, isn't it? And the rich.

I'm also a bit skeptical about some of your predictions for how you envision any kind of war would go.  First off, I'm not so sure the availability of petroleum would be a massive hinderance for military operation.  Surely it would have severe impacts on domestic life, but the US has strategic reserves, as well as domestic and might-as-well-be-domestic production in Canada and Mexico, that could keep the war machine churining for some time.  As for the money problems after the Chinese don't buy our debt, they would just do what the State always does in large military conflicts: Print and nationalize.  Nazi Germany was falling apart economically throughout WWII, yet their military production peaked in late 1944, after they had already basically lost the war.

Anyway, it was an interesting read.  However I think you ascribe far too much to active conspiracy/plotting and not enough to just general group-think and bueaucratic momentum.

"They're going to embargo Iran, secretly send assassins into Iran to murder people, send intelligence agents in to corrupt Iranian leaders (they've been doing this for a long time), and then when they manage to get Iran to make a move, it will be game-on. They would prefer Iran to act of its own accord but if they have to, they'll just fake it, cf Gulf of Tonkin. Why else is that aircraft carrier parked there?"

You can't say you are making predictions if you are listing the last few weeks worth of news.

"What they want is a surprise "defeat" of US forces at the hands of China/Russia. Such a defeat is pretty much baked into the cake. The moment we open hostilities against Iran, China's going to cut off our credit card. We might have the best military equipment in the world but with no fuel to put in the gas tanks and no money to buy food to put in the soldiers' mouths, what use is it? As mentioned in the article linked above, our aircraft carriers are stone-age monuments to the last war. They will disappear like trench-warfare did in WWII and all the military "experts" will be scratching their heads and then saying, "ohhhhhhhh, yeah, we're always preparing for the last war, duhhhh."

China in no way will effect the ESF and FED funding, especially during a war.  The Chinese role in US purchasing power is overblown.  It is merely politically convienient to blame them and/or put them in that role.  China and Russia will likely not be allies.  They see each other as long term enemies (Middle East = short, U.S./EU/NATO = intermediate; so goes for both nations).  Iran has so many enemies in the region, that open war with one means they will effectively have to worry about all.  We're talking Turkey, Pakistan, Afghanistan, Saudi Arabia, Israel, US, EU...  Russia, Syria, Iran.... China, Pakistan, Iran...

My guess is that you are wrong as hell about the aircraft carriers.  They are old, yes, but the weaponry on them as well as the submarine defense that accompanies them is not be be dismissed.

"speculating about fleets of drone armies clashing in WW3."  (There are a bunch of different potential police/military robots out there.

If you've ever seen videos of Metal Gear Solid, it has robots and genome soldiers.  The design team staffed the second in command of Japanese intelligence.  Your friend is not wrong, but it will be further into the future when we have drone armies and stuff like that.

Your main thesis is just what history tells us; not much of a prediction.  Of coure the economic collapse and war will coincide.  One will be political cover for the other, whichever comes first.  The U.S. officials have said from DoS to DoD to CIA that Israel will make the first move and we will support them.

" There is a war coming. I predict a trigger event by mid-2013 at the latest
    * It will act as political cover for US default on its obligations: "Sorry, US public, it's not our fault we can't send your Social Security checks, the mean old Russians and Chinese imposed these cruel terms of settlement. By the way, we're going to have to tax you more to pay reparations to them."
    * Look for tensions to increase to the breaking point towards the end of 2012... either Iran is eventually going to respond to our provocations or we're going to fake an Iranian response
    * Once the "trigger event" has occurred, all hell will let loose. Look for a draft. Look for full-on war hysteria. Be smart, don't go into the streets and protest the war. Stay home and be careful what you post on the Internet."

Probably correct here, I also think that the Establishment will abuse the ignorance and fear of 2012 (climate change, war, economic collapse; it is all useable) as a diversion for what they do to us.

I'll be burning my draft card in the streets, not cowering in my apartment NOT posting things online.  If the State needs to kill me or lock me up then so be it. (Give me liberty! or ... what was it?) (See you in the FEMA camp! Maybe we can start a riot!)

"Remember, the goal of the war is not defeat the enemy, it is to provide political cover for a default... look for some kind of "peace agreement" to be reached after the US quickly exhausts whatever little reserves it has to operate on and after some stinging defeats of its supposedly undefeatable military hardware (aircraft carriers, drones, stealth aircraft) are suffered at the hands of supposedly inferior Chinese/Russian equipment. A Sukhoi with a tank full of gas is a hell of a lot more dangerous than a B-2 bomber with empty fuel tanks sitting on the tarmac."

You're saying that the NWO (w/e we call it) is going to hand world power from the U.S. to the East?  I seriously doubt the NWO is _that_ coordinated.  It also seems highly unlikely that the U.S power figures are going to just hand things over to the Triads and Russkies. They are fighting for power amongst each other while the banks build the world system.  When the banks are done all will be as was and will be.  U.S. oil comes from Mexico and Canada not the middle east.  China and Europe need that oil in the middle east.  US debt gets hit, Chinese and European production (!!), putting Russia in the best possible place to provide energy for everyone.

"The open question is whether the Chinese/Russians might not take the opportunity to strike back when the US government has so greatly weakened itself."

The Russians will look to influence Europe not the U.S.  I am worried about naval conflicts with China.  They will use a big war as cover to take certain parts of the Pacific Islands and Indochina, possibly Taiwan, etc.  Petere Schiff has explained how American Samoa has coordinated its economy with China.  China, however, has a history of Isolationism.  only when the CCP took control did they become belligerent (who'da thunk it'd take a European philosohpy to turn the Asians into western style imperialists).

You also realize the Russian equipment, with the possible exception of tech waeponry, is two decades older than current U.S. equipment.  China also can barely put together submarines that have the kind of quality for war.  Seriously, the Chinese military is not a huge threat anywhere but in Central Asia (land forces).

I also regard nuclear weapons (perhaps naively) as a non issue everywhere but in Israel and Pakistan/India.  The only reason the US used them in the past was because no one else had them.  States use nukes to ensure that they will fight conventional wars.  If more states get them, they lessen the risk of a conventional invasion by a nuclear force and bring the war standard back down to conventional scenarios.

Israel's idiotic war plans are the greatest threat to world peace.  SAMSON will end us all.

Both Russia and China appear to be backing Iran, but how much of that is a bluff is anyone's guess at that point. Then again, people probably said the same thing about the great powers of Europe in the month between June 28th and July 28th, 1914.

As I've mentioned before, the worst possible outcome I see from this is no less than the extinction of humanity in an NBC holocaust (and no, I don't mean re-runs of America's Got Talent). So I'd say it's pretty dangerous times we're living in.

More on this later.

Okay, real quick:

Since Nixon closed the gold window, the dollar has remained the world's reserve currency due solely to US power-projection over most of rest of the world. This power-projection only escalated after the collapse of the Soviet Union, when many analysts apparently thought the US would back off instead. (Many people speculated the same thing about the US vis-a-vis the "war on terror" after Osama bin Laden was allegedly killed in May of last year.)

Anyways, it seems to me that the dollar's de facto status as the world's reserve currency brings a lot of benefits to the US power elite. Take that away and I suspect their entire shell game comes crashing down around them. Yet in tightening their grip over the rest of the world, they paradoxically face increasing opposition, which threatens the shell game even more. Ultimately, the only way out for them may be to go literally "all in" and bet the farm on being the last ones standing.

I think it's safe to say that when the state starts failing enough, war will be inevitable to distract the populace.

It's a known fact that all the wars America has been in since 1913 were the direct cause of the FED and the FED's printing of fiat currency out of thin air. The FED has one goal: destroy America. This would be good if we knew a true anarcho-capitalism would emerge from the ruins but as we know all too well states have a history of becoming their MOST tyrannical as they begin to collapse for good. I have a feeling that America's collapse is already happening thanks to the FED. We see things like the ending of the Constitution (which is the second best thing to a capitalist anarchy IMHO) with the Patriot Act, NDAA, SOPA, PIPA and all the other bills to end our liberty once and for all. Things will only get worse when the SHTF moment comes. Better learn survival skills now so you can prepare.

Freedom4Me73986:

It's a known fact that all the wars America has been in since 1913 were the direct cause of the FED and the FED's printing of fiat currency out of thin air.

News to me.  What's your source for this "known fact"?

 

Freedom4Me73986:

It's a known fact that all the wars America has been in since 1913 were the direct cause of the FED and the FED's printing of fiat currency out of thin air.

News to me.  What's your source for this "known fact"?

http://ftmdaily.com/the-federal-reserve-fraud/inflating-war-central-banking-and-militarism-are-intimately-linked/

The FED causing a war with Iran, China and Russia will certainly be the SHTF moment. I'd prepare.

It's the reverse.  War is one of the reasons we have the fed.  The fed does not start wars.  Politicians use the fed as a tool to finance them.

you are wrong as hell about the aircraft carriers

What do you think about what the author of the linked article said? He didn't just make it up, he's documented his claims... aircraft carriers have no defense... zero defense... from overhead threats. You don't think the Chinese or Russians can lift a rocket projectile into a position to vertically drop on an aircraft carrier? Even if the aircraft carrier's defenses managed to take out one rocket, the Chinese or Russians could launch dozens for a tiny fraction of the cost of an aircraft carrier... spending $100M to take out a $20B weapon is a hell of a bargain.

Clayton -

No govt will stage its own defeat.

Think again.

Clayton -

U.S. policymakers, at the top, were very stubborn.

I don't believe that the top policymakers have the final say in what happens. The permanent power interests have the final say; not the Presidents and their cabinets which come and go every four years. Appearances aside, they are administrators. They implement the policies they are given to implement.

Clayton -

It's the reverse.  War is one of the reasons we have the fed.  The fed does not start wars.  Politicians use the fed as a tool to finance them.

Either way I'd bet my gold that the FED and the bankers who own it are pushing America to war with Iran and China very soon. Better learn survivalist skills now so you can escape the tyranny which will follow.

“I don't believe that the top policymakers have the final say in what happens. The permanent power interests have the final say; not the Presidents and their cabinets which come and go every four years. Appearances aside, they are administrators. They implement the policies they are given to implement.”

Show me evidence that unnamed people (you call them “permanent power interests”) are dictating U.S. policy.

Here's some:

 

President Truman

 

S State - Edward Stettinius, Partner in J.P. Morgan

S State - Dean Acheson, member of "The Wise Men" affiliated with John McCloy and Averell Harriman

S State - James Byrnes, Protege of Bernard Baruch

S War - Henry Stimson, Protege of Elihu Root, J.P. Morgan lawyer, cousins partners in Bonbright

S War - Robert Patterson, CFR

S Defense - Robert Lovett, Brown Bros Harriman, Skull and Bones, The Wise Men

S Defense - James Forrestal, Dillon Read & Co. (rockefeller)

Office of Defense Mobilization - "Electric" Charlie E. Wilson, GE

S Commerce - Averell Harriman, skull and bones, Guaranty Trust Co, Brown Bros Harriman, Friend of Hall Roosevelt

 

President Eisenhower

 

S State - John Dulles, Sullivan & Cromwell (Morgan Law)

S State - Christian Herter, married into Pratt Family of Standard Oil, CFR

S Defense - Charlie E Wilson (Engine Charlie), General Motors

AtGen - Herbert Brownell, worked for Lord Day & Lord who practiced law for Chemical Bank (rockefeller)

S Commerce - Lewis Strauss, partner in Kuhn Loeb (Warburg), advisor to Rockefeller Bros

Dir CIA - Allen Dulles

 

President Kennedy 

 

NatSec Advisor - McGeorge Bundy, Ford Motors, SKull and Bones, CFR

S Treasury - C Douglas Dillon, Dillon Read & Co., CFR, Rockefeller Foundation

S Defense - Robert McNamara, World Bank, protege of Robert Lovett, Ford Motors, Brookings Institution, CalTech

S State - Dean Rusk, Rockefeller Foundation

CIA - John McCone, Bechtel, Consolidated Steel

 

President Johnson - heavily financed by KBR

 

NatSec Advisor - McGeorge Bundy, Ford motors, Skull and Bones, CFR

S Treasury - C Douglas Dillon, Dillon Read & Co., CFR, Rockefeller Foundation

S Defense - Robert McNamara, World Bank, protege of Robert Lovett, Ford Motors, Brookings Institution, CalTech

S State - Dean Rusk, Rockefeller Foundation

S Treasury - Henry Fowler, Brookings Institution, Goldman Sachs

UnderS of State for Political Affairs - Eugene Rostow, Cravath Swaine & Moore (DuPont, Morgan Stan, Time Warner)

CIA - John McCone, Bechtel, Consolidated Steel

 

 

President Nixon

 

 

S State - Henry Kissinger, CFR, Bilderberg, Trilateral Commission, Rockefeller Brothers Fund, Rand Corporation

S Treasury - David Kennedy, Brookings Institution

S Treasury - William Simon, Haliburton, Citibank

S HEW - Caspar Weinberger, Bechtel

S Treasury - George P Shultz, Bechtel

 

 

President Ford

 

NatSec Advisor - Brent Scowcroft, Trilateral Commission, CFR, CSIS

VP - Nelson Rockefeller

S State - Henry Kissinger, CFR, Bilderberg, Trilateral Commission, Rockefeller Brothers Fund, Rand Corporation

S HEW - Caspar Weinberger, Bechtel

S Treasury - William Simon, Citibank, KBR, CSIS with Kissinger

S Defense - James Schlesinger, Rand Corporation

S Defense - Donald Rumsfeld, G.D. Searle & Co (pharm), Rand Corporation, Bechtel, Bilderberg, A.G. Becker (wall street)

CIA - Brent Scowcroft, Trilateral, CFR, CSIS, Bilderberg

 

 

President Carter

 

NatSec Advisor - Zbigniew Brzezinski, Trilateral Commission, CSIS, Bilderberg, CFR

S State - Cyrus Vance, Trilateral Commission

S Treasury - George W Miller, Federal Reserve, Club of Rome, Cravath Swaine & Moore Law firm, Textron

S Defense - Harold Brown, IAGS, CITech, Altria

AtGen - Griffin Bell, King & Spalding Law (coke, GM, Chevron)

S Commerce - Juanita Kreps, CFR, Citicorp, AT&T

S Agriculture - Charles Duncan, Coca-Cola, JP Morgan, AmEx

S Education - Shirley Hufstedter, CFR, Aspen Institute, Morrison and Foerster

 

 

President Reagan

 

S Defense - Caspar Weinberger, Bechtel

S State - George P Shultz, Bechtel

S Treasury - Donald Regan, Merrill Lynch

S Defense - Frank Carlucci, PNAC, RAND

CIA - William Webster, Milbank Tweed Hadley & McCloy

S Commerce - William Verity, Armco Steel

NatSec Advisor - Colin Powell, CFR, Bilderberg

 

 

President GWH Bush, CIA Dir, Skull and Bones, Brown Bros Harriman, Dir CFR,

 

NatSec Advisor - Brent Scowcroft, Trilateral, CFR, CSIS, Bilderberg

S Treasury - Nicholas Brady, Dillon Read & Co., CFR, Rockefeller Foundation

S Defense - Dick Cheney, CFR, Bilderberg, Haliburton, PNAC

S Agriculture- Clayton Yeutter, ConAgra, Caterpillar, Weyerhauser

S Commerce - Robert Mosbacher, CSIS, Aspen, New York Life Insurance

S Transportation - Andrew Card, General Motors, Ford Motors, UP Rail, PR Firm 

Trade Representative - Carla Hills, Trilateral Commission, CFR, Coke, Chevron, CSIS

 

 

President Clinton - Trilateral, CFR, Bilderberg

 

 

CIA - George Tent, Allen & Co. Bank, 

CIA - John Deutch, Citigroup, Raytheon, SChlumberger, Trilateral Commission

S Treasury - Loyd Bentson, Lockheed Corporation

S Treasury - Robert Rubin, Citigroup, Goldman Sachs, Dir CFR, IMF, Ford Motors

S State - Warren Christopher, Dir CFR, Trilateral

S State - Madeleine Albright, Dir CFR, Albright Group --> Coke & Merck

UnderSec Defense - John White, RAND corporation

 

 

Trilaterals, Aspen, CFR, Brookings get their funding from Rockefellers. Citibank, Goldman, and JPM are Rockefeller banks. But that's not the entirety of the point. The point is that if you get 3 people marching step, then the 7 remaining people will follow them. The three people look intelligent and decisive. Put some people in cabinets and then when they decide on the same ends, it would seem stupid to oppose them. It's also not necessary for these people to get any commands or advice from the people who share their interests. They know how the game works: lie, cheat, make war, profit. If these people are largely beneficiaries of the same party then there's no need for a top down command structure. Also, you may have noticed a strong Bechtel and KBR presence in the cabinets. It is not necessary for these military industrial people to meet personally with bankers. They both have the same ends: profit from government spending. Military people get their bombs bought and whatnot, and the bankers get the debt in the US and the assets from the defeated countries. There's practically unlimited information on this subject. Frankly I don't care whether you accept it or not, because anarcho capitalism would solve the problem whether it exists or not, but you might find it fascinating and puts things in perspective.

 

EDIT: I just thought I should say: Harriman and Rockefeller shared banking interests starting from the 1930's internationally.