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Why bailouts from the federal government will lead to a total financial collapse

As citizens of the United States, we heard gigantic figures in the media in recent years to pay for extraordinary events not originally contemplated when our government sets Budget:

$ 32 billion immediately after the September 11, 2001, attacks

Up to $ 200 billion for Hurricane Katrina

$ 500 billion more for war in Iraq

Given the extraordinary impact as most of those we already expect that the federal government will face massive deficits this year – even before the financial crisis began.

As 2008 comes closer to the end, however, we were presented with a set of new astronomical numbers associated rescue operations either already approved or being processed by the federal government:

$ 200 billion to offset losses Future of Fannie Mae and Freddie Mac

$ 700 billion for the Troubled Asset Relief Program

Up to $ 1000000000000 be taken into account in infrastructure projects to boost U.S. economy

After many years of simply not paying attention, I decided to search online on the financial position of the U.S. federal government. Frankly, I was shocked by what I found:

The national debt just $ 10.6 trillion and growing every day.

The federal government spent 451 billion dollars just to pay interest on the national debt during the fiscal year ended September 30, 2008. Interest expense is now the third largest item in the federal budget is second only to the departments of health / human rights and of Defense.

The Office of Budget and Management under the budgetary situation in the short term as well as think.

But most Americans here something might not realize.

Our congressional leaders continue to push for more regulation and oversight and seem think this might have prevented the collapse of Enron, Fannie Mae and Freddie Mac.

So, I was shocked to learn that the Government Accounting Office (GAO) reported this month major material weaknesses in financial reporting processes of government – prevention the GAO to express opinions on the financial statements of a significant number of federal agencies. The GAO concluded that the government Federal did not maintain effective internal control over financial reporting – a system that could result in waste, payments excess and inefficient use of government assets.

The GAO is referring to the same federal government that was you that it will closely monitor the billions loaned to bail out financial institutions and the automotive industry.

All numbers point to a mathematical certainty – as we move towards the greatest financial crisis ever – the government's total financial collapse of the United States – Armageddon.

To pay part of the rescue plans announced later, the Treasury Department announced its intention to borrow $ 550 billion in Q4 2008 and $ 368 billion in Q1 of next year.

future loans of this magnitude might not sound like something new you. You've heard those kinds of numbers thrown around before.

There's just one problem.

Governments do not an infinite capacity to borrow. Major cracks are already showing on the surface. Some of the biggest states in the country are struggling to sell their bonds investors, including the states of Florida and California – is something most of us have ever seen in our lives. California is already the federal government's approach to ask for billions to help them overcome their current crisis.

You see, we've reached a point in our history in which only the federal government seems to have a fully functioning line of credit. But now that you know the incredible amount of money must be spent on interest trillions of debt service, how long the federal government can continue to borrow?

When investors buy the debt of the federal government finally decide they do not want to lend more to Washington? What do you think that happens when investors become nervous about the federal governments ability to pay the debt back? They are only going to do one of two things – The interest rate is very high demand or simply invest their money elsewhere.

When this happens, there will be a matter of months before the federal government to close – an agency at a time.

Therefore not as ambitious plans elect Barack Obama for the future, his presidency is largely going to consist of supervising the bankruptcy of the federal government – rather than expanding programs government social.

Now I do not expect our elected the new president to take this lying down. He will not sit quietly and to preside over a bankruptcy and missed its chance to create a legacy. To avoid a total financial collapse that will make his presidency relevant, you should predict that he will let Bush's tax cuts expire and that will require brand new taxes – up to and including the takeover your personal assets and property.

You have to take the following steps to protect you as we move towards the financial day of reckoning – a day when the federal government will not be able to borrow like he wants in the debt markets:

If you have investments in bonds, do not assume that your capital is not at risk – knowing exactly what these bond funds invest in case of risk you will lose your investment, so this fund.

Investing in precious metals including gold. They are good investments for years to come. In post World War in Germany I when he took a wheelbarrow full of money to buy a loaf of bread, a person can pay with gold was nothing to fear.

Buy property during these difficult times. Those who own their own home will be much better off than those who rent during a financial meltdown. If you want proof of this just take a look at those who owned houses in Brazil and Argentina during their years of inflation of 100% – in all honesty owners and tenants were not in control.

Pay your mortgage. Owning a house outright is much better for you, with a mortgage.

Last but not least, at least consider keeping an emergency stash of cash in your home the hardest of times.

I want our new president all the best, taking the mess he will inherit. However, our crushing debt National will severely limit his options. I intend to prepare the financial collapse before it happens – you should too!

About the Author

Michael Letcher is a former Fortune 500 executive and is a licensed CPA. His on-line guide can help you get out of Citizens home insurance. Learn the secrets to the Florida home insurance market in his free newsletter by visiting =>
http://www.homeinsurancebuyers.org

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