Beyond the Point of No Return

Many have heard me talk about the problem of the Federal Reserve "buying" Treasury bonds from the U.S. Treasury. Where does the Fed get the money to do this? I have asked some of the smartest minds in my industry to explain how this works and all I get is blank stares. To me, that is evidence of a problem.

A friend sent me this article today from CNN Money;

Is this finally the economic collapse?

Despite the many differences between Japan and the US, there is one similarity that continues to matter most in the risk management model my colleagues and I use at Hedgeye, our research firm -- debt as a percentage of GDP. Now that the US can't cut interest rates any lower, the only option left on the table is what the Fed just announced it would start doing -- buying Treasury debt. And that could lead the country to the brink of collapse: According to economists Carmen Reinhart & Ken Rogoff, whose views we share, crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It's a point from which it's almost impossible to return.

See it here; http://money.cnn.com/2010/08/11/news/economy/economic_collapse_GDP_unemployment.fortune/index.htm

It is starting to feel a little bit eerie here on planet earth. The rumors coming out of Israel are that war could break out there by month end, the floods and storms keep hammering various places, people are on edge all over the world, large earthquakes are happening with such frequency they are scarcely reported, and Pakistan has had such devastating floods that millions are homeless and thousands could starve...but yet most in America don't even know about it!

Remember when the Tsunami hit Indonesia in 2004? We were all stacked around our T.V.'s for two weeks amazed that the earth could turn on humans in such a tragic way. We all opened our checkbooks and sent $billions in aid.

Today we have become so desensitized we simply won't be bothered with the latest human tragedy. Unprecedented wildfires in Russia, Chinese mudslides killing thousands, Pakistani flooding.....yawn!

The earth is groaning folks. The sirens are blowing announcing that time is short. Will we all be at work for the Kingdom when the Master returns?

Hat tip to Adam G.