We all knew this four years ago...

Bernanke’s Warning: We Stand on the Precipice of Economic Destruction

Kurt Nimmo

Earlier this week, Federal Reserve boss Ben Bernanke again warned that out of control borrowing and spending will eventually destroy the country.

Said Ben to the the Budget Committee:

Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living. Moreover, diminishing investor confidence that deficits will be brought under control would ultimately lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil. In a vicious circle, high and rising interest rates would cause debt-service payments on the federal debt to grow even faster, resulting in further increases in the debt-to-GDP ratio and making fiscal adjustment all the more difficult.

But here is something Bernanke didn’t mention – a large chunk of that debt is owed to the Federal Reserve. In February, the corporate media fessed up to this undeniable fact. From CNBC:

That’s right, the biggest single holder of U.S. government debt is inside the United States and includes the Federal Reserve system and other intragovernmental holdings. Of this number, The Fed’s system of banks owns approximately $1.65 trillion in U.S. Treasury securities (as of January 2012), while other U.S. intragovernmental holdings – which include large funds such as the Medicare Trust Fund and the Social Security Trust Fund – hold the rest.

The bankers that own the Federal Reserve love debt and that’s why they continually expand the money supply.

“Without the Fed’s relentless expansion of the money supply during both the Greenspan and Bernanke eras, the U.S. Treasury never would have been able to issue the staggering sums of debt that now threaten our economic well being,” Ron Paul told the House Committee on Financial Services Subcommittee on Domestic Monetary Policy last year. “This Treasury debt is the very lifeblood of deficit spending, permitting one Congress after another to spend far more than the Treasury collects in taxes. It is precisely this unholy alliance between the enabling Fed and a spendthrift Congress that I hope our witnesses will address today.”

It’s a great situation for the warheads in the Pentagon and the military industrial complex. Excluding Social Security and other “trust funds” (no pun intended), the Pentagon spends most of this money. Flush with trillions, they are free to continue and expand the wars necessary for the globalists to extend their reach (as they are now doing in Africa).

The debt wrecking ball is doing a fine job of destroying the middle class and making sure America becomes another third world cesspool like Mexico and eventually sub-Sahara Africa. As of last year, the debt officially exceeded 100% of the nation’s gross domestic product, in other words the debt is now as big as everything we produce in America.

In order to pay off this staggering debt, the Federal Reserve will print more money out of thin air and expand the money supply which will lead to more inflation that will whittle away at the middle class and the living standards of all Americans.

“Greece, and more precisely Italy and Spain, are our ghosts of the future past. The Fed will print more money. That’s what they do. They work for the banks,” Capital Waves Strategist Shah Gilani told Business Insider in January.

The Greek dilemma is coming to America. The debt owed by Greece was 160% of that country’s GDP last August and the average yield on Greek debt was around 15%. “Thus, if Greece’s debt is rolled over without restructuring, its interest costs alone will amount to approximately 24% of GDP. In other words, if debt pardoning does not occur, nearly a quarter of Greece’s economic output will be gobbled up by interest repayments,” writes Puru Saxena for 321 Gold.

In August, Ron Paul introduced HR 2768, legislation designed to cancel $1.6 trillion in debt. “I would say that is not a real debt. It’s a fictitious debt. It’s a dishonest debt, and that we’re not obligated,” he said.

HR 2768 disappeared into the maw of a congressional committee and will likely never be seen again. A previous bill introduced by Ron Paul, Audit the Fed, was severely adulterated under pressure exacted by the Federal Reserve and the Obama administration. In June of 2010, the bill failed by a vote of 229-198.

Bernanke’s remarks earlier this week serve as a warning of things to come. His “fiscal adjustments” (i.e., tax increases and the entire palette of IMF styled austerity) will indeed “come as a rapid and painful response to a looming or actual fiscal crisis,” one designed by a cartel of international bankers who specialize in the destruction of nations, fire sales, and wholesale misery.

Ron Paul offered an escape hatch, but it was shuffled off to the oblivion of a congressional committee.

Soon enough, we will suffer the result.

Link:
http://www.prisonplanet.com/bernankes-warning-we-stand-on-the-precipice-of-economic-destruction.html