THE PROBLEM WITH SOVEREIGN DEBT

When your friend owes you money and borrows money to pay you interest or gives you a new IOU, the debt problem is contained between you, your friend and the lender of the interest.

Sovereign debt [the debts of nations] however, is another matter. First all of the citizens are on the hook for the debt and the incumbrance will settled presumably with future tax receipts , except when the nation issues more debt and debt to to pay the interest on existing debt, which compounds the problem as the debt grows and grows until there is no possibility of the nation or its' citizens being ever able to pay off the debt. In addition the risk is spread to citizens of other nations all over the globe, hence the containment of the problem, such as the money your friend owes you no longer exists.

This circle of despair begins with the concept of credit or debt considered as money.

Any thing to be considered as money must have a constant value i.e. to be used as a store of value. Since 1913, when the Federal Reserve got control of our money it has gradually lost value, SINCE MORE AND MORE "MONEY' WAS CREATED. Example: in 1906 a 4 bedroom house in a good neighborhood cost less than $1,000. Now in most good neighborhoods you cannot buy a 4 bedroom house for $100,000. Our Federal Reserve Notes are not backed by any hard or constant value money--just an IOU.

The entire world is on a standard of debt money, without sufficient hard money such as gold or silver as collateral to back it's IOU's and as the debts rise into the never never land it becomes obvious to even the risk- blind investor that maybe his investment in the sovereign bonds may be in a black hole.

The debt balloon is starting to leak. First with Dubai, now with Greece, Spain, Portugal and Italy, sovereign bonds are losing market value and ever increasing interest rates are needed to keep the game going. Money is flowing to safe havens. The USA is temporarily the beneficiary of this money flow. This will be true until the bell tolls for thee, since our debts are now so large as to be also unpayable. This 'money' flow is much like getting to a better seat in a sinking ship.

The saddest part of this sovereign debt implosion is that the largest purchasers of these bonds are pension funds, insurance companies and banks which have been relied upon to safeguard savings and retirement funds.

Central banks are unofficially banded together in a cabal to control fiat money and deny gold and silver accumulation. They are busy putting fingers in the dikes of debt, "bailing out" those who have been caught out as being insolvent. So we have essentially the lame leaning on the lame or if you will, the blind leading the blind into the ditch.

With Love and Kindness,

THE HATMAN