While market lemmings continue to foolishly funnel their money into the latest “dead-cat bounce” in U.S. equity markets, one of the only pieces of real news coming out of the propaganda machine this week was conveniently ignored. Mall-owner General Growth filed for bankruptcy – along with 158 of its malls.

This is the largest commercial real estate bankruptcy in U.S. history, and comes in the early stages of the collapse in the U.S. retail sector. Regular readers here will not even be slightly surprised by this development, as I have been warning about such developments for months (see my more recent commentaries “U.S. retail collapse accelerating Rapidly” and “Collapse in retail sector BEGINNING to impact U.S. economy”).

Just as the U.S. housing “bubble” was characterized by the building of millions of excess units which cannot be sold, and must eventually be demolished, with the U.S. retail sector “bubble”, hundreds of excess malls, and hundreds of thousands of excess retail outlets were opened.

There will NEVER be enough consumer demand to support all these excess stores, and thus these must also be closed and demolished.

The first consequence of these closures will be the loss of tens of millions of U.S. jobs (see “U.S. economy to lose 20 MILLION jobs this year”). These employment losses will create yet another self-feeding, downward spiral in the U.S. economy, as less jobs means less spending, meaning even more retail sector lay-offs, and even less spending, and so on...

The next obvious consequence is to add trillions MORE in losses to the leveraged balance sheets of the fraud-factories in the U.S. financial crime syndicate. None of these losses have been accounted for in the fraudulent accounting of the banksters.

The third obvious consequence is a GIGANTIC drop in revenues to all levels of U.S. government: HUGE losses in property taxes, sales taxes, and income tax revenue. These revenue-plunges come at a time when states and municipalities across the U.S. were already threatened by bankruptcy.

A Reuters article on the collapse of General Growth provides a warning on what this collapse means to the U.S. financial sector: there are $814 BILLION of commercial mortgage debt which is due to mature in the next two years – and no sources of funding.

This mountain of maturing debt will result in an endless series of retail sector bankruptcies (in conjunction with the collapse in retail sales), and the TRILLIONS in additional (leveraged) losses for U.S. banks means even less loan capital available, which will cause even more commercial debt defaults, which will cause even more bank losses, and so on...

As has been stated by an increasing number of commentators, the U.S. was literally operating a “Ponzi scheme” economy. Now that the collapse has started, there is nothing which can reverse this implosion of debt but tens of trillions of additional money-printing by the U.S. government to bail-out enough losses to avoid a Soviet-style debt implosion. The consequence of such reckless money-printing MUST be hyperinflation.

Avoiding hyperinflation necessarily means a debt implosion, and national bankruptcy for the United States. There are NO other options.

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