Financial Analyst Warns U.S. Debt Default Would Trigger A Great Depression. No Social Security Payments.

[link to theextinctionprotocol.wordpress.com]

October 6, 2013 – WASHINGTON – As we close out the first week of the government shutdown, a bigger and even more toxic disaster is creeping into the fray that could make the contentious budget battle look like a slap fight. The Treasury Department said Uncle Sam will be broke by October 17th unless something is done. Treasury secretary Jack Lew hammered home that point Thursday by releasing an unusually ominous statement that warned of catastrophic risks to the economy. House Speaker John Boehner has said he won’t let the government default on its debt, but until steps are taken to raise the nation’s debt ceiling, the possibility of default is still theoretically alive. “If they seriously default on the debt, what we’re really talking about is a depression,” says veteran financial sector analyst Richard Bove, VP of research at Rafferty Capital Markets. In the news video he explains how the fallout would be a lot worse than the recession suffered in 2008 and the aftershocks would be felt for at least a decade. “The first thing you have to do is look at who holds the debt,” Bove says of the $16.7 trillion of bonds the U.S. currently has outstanding. “The first, biggest owner (of U.S. debt) is the social security fund, so you’d have all of these people who are receiving social security payments who now have to question whether they’ll get their payments.” Clearly, that would cause a huge disruption to millions of Americans. But Bove says that is only the beginning since the second biggest holder of Treasuries (at about 12% of the total) is the Federal Reserve, which has “91% of its assets backed by U.S. government debt.” If the value of those assets were to decline, which they indisputably would in a default, Bove says the net effect would be that “we have nothing of value backing the dollar.” They’re actually “Federal Reserve Notes’ as well as the number one asset of choice held in the reserves of governments and businesses all over the world.