Becoming, become, became-- what is the difference? In any case, surely this is wonderful news!
Posted on 03/05/2013 12:07:16 PM PST by blam
Is the U.S. Becoming a Banana Republic
Politics / US Politics
March 05, 2013 - 02:40 PM GMT
By: Michael Pento
It is sad to say there are just two reasons why the U.S. is not yet a banana republic. The first reason is that the US dollar has not yet lost its world’s reserve currency status, which is helping to keep interest rates at record low levels. If the dollar, yen and euro were not involved in a currency war, the dollar’s intrinsic decline would become much more evident, causing domestic inflation to soar, and our bond market to immediately collapse.
However, the perpetual erosion of fiat currencies will eventually cause investors to eschew the sovereign debt issued by the over-indebted nations of America, Japan and Europe—even if the dollar’s decline does not manifest itself against the euro and the yen.
The other reason why we have not been declared a banana republic is because America is not located between the Tropics of Cancer and Capricorn.
The Definition of a banana republic is a nation that suffers from chronic inflation, high unemployment and low growth; primarily due to massive government debt and deficits that are purchased by its central bank. There is no doubt that the U.S. has suffered from structurally high unemployment, stubbornly high aggregate price levels, and low growth for the past five years, which is the direct result of our debt-saturated economy.
So let’s just assume there exists a country located 15 degrees north of the equator that had amassed $7.5 trillion of new debt in the last 5 years alone. This nation also has nearly $17 trillion in issued debt outstanding, a debt to GDP ratio above 106%, and has clearly shown it is incapable of preventing that ratio from rising.
The central bank of this tropical land artificially pegged interest rates at 0% for over 4 years, has pledged to keep them there for at least three more years, owns $1.8 trillion of government debt and has pledged to buy $1 trillion more during 2013. Let’s not forget that $1 trillion worth of central bank buying just happens to coincide perfectly with the projected annual deficits of $1 trillion for the foreseeable future. What adjective would you use to describe this country? Of course, any objective observer would designate it a bona fide banana republic!
This is the reality of the economic backdrop of the U.S. But, as mentioned previously, the legacy effects of having the world’s reserve currency postpones the most pernicious effects of such economic fundamentals that exist in our country. Nevertheless, even though the Japanese and European economies also suffer from debt and stagflation, this isn’t enough to purge the U.S. economy from its insolvency; nor will it save our bond market from that inevitable historic rise in yields.
The problem is now even the mere normalization of bond yields would send interest payments on our unprecedented amount of debt soaring. This could force the Fed to step up its dollar creation far in excess of what the BOJ or ECB would dare to create in order to stem that rise; and this could be the catalyst to send the dollar and bond market crashing even further.
While some love to speak about the return of “King Dollar,” the truth is any nation that seeks to remain viable through the life support provided by its central bank purchases of sovereign debt should be designated a banana republic--regardless of its geographic location. That is why the U.S. is headed down the road to serfdom…or fruitdom as it is in this case.
Becoming?
No.
Even Banana Republics produce SOMETHING.
Under Barack Hussein Obama the US only produces chaos and government red tape.
We’re past “becoming”
The answer is : Yes!
Rush Limbaugh: New national anthem of the banana republic of the United States 7/2/09:
http://www.youtube.com/watch?v=jBxL5pzwGgA
Becoming, become, became-- what is the difference? In any case, surely this is wonderful news!
Just because Barack Museveni Obama was lected president twice? Now, go ahead, and Google Museveni. Read this guy’s biography and tell me if you don’t see parallels.
Well... dictatorial regime, CHECK. Class division bordering on warfare, CHECK. Corrupt “electoral” process, CHECK.
If we’re not there... we’re getting there.
Without the bananas
Can it work with no bananas?
That’s the question.
It’s such a banana republic now, we’ll have to change the name of the country to Chiquita.
Hmmm...what is the next step below a banana republic?
An outdated fashion store with an outlet in every mall? Leave that discussion to the talking heads on Sunday mornings.
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