October 8, 2013: What Happens if the US Defaults - Yalman Onaran & John Hogue
Onaran draws a stark comparison to the 2008 Lehman Brothers collapse, noting that U.S. government debt is 25 times larger than Lehman's was. He explains how even the mere debate over the debt ceiling in 2011 destroyed six trillion dollars in global market value. Treasury bill auction yields have already doubled, and Italian and Spanish bond markets are showing signs of panic. Goldman Sachs estimates that cutting all government payments except debt service would shrink the economy by five percent.
In the second half, prophecy scholar John Hogue joins to discuss Nostradamus, the prospect of war with Iran, and the cycles of history that drive nations toward repeated conflict. Hogue warns that the 2015-2016 window remains the highest-risk period for a Middle Eastern confrontation and argues that diplomatic breakthroughs, while possible now, face sabotage from forces on all sides.
Key Moments
Six trillion lost from a near-miss: Onaran says the 2011 debt-ceiling fight alone destroyed about $6 trillion in global stock-market value over four months, and an actual default would be a multiple of that.
A weird kind of bankruptcy: Onaran explains the U.S. has the means to pay but would simply choose not to, like calling the bank and refusing the credit-card bill - a self-inflicted bankruptcy with no precedent.
Treasuries as the safest investment for 250 years: Onaran warns that the derivatives and esoteric securities held between the now-bigger megabanks would unwind like a house of cards if Treasuries - considered the safest investment in the world for 250 years - are no longer safe.
Hogue's one-word answer: stupid: Asked why history keeps repeating, John Hogue says one word answers it - 'stupid' - and applies it from personal patterns to America's recurring civil-war interventions from Vietnam to Syria.
Nostradamus dates the Iran war: Hogue says Nostradamus' astrological computations point to two windows for war with Iran - 2006-2007 and especially 2015-2016 - with 2016 the prime year, possibly as early as August 2015.