Debt & Deficits

In Europe, they were able to come up with a clever moniker, PIGS, to succinctly represent [and name the countries in dire financial straights - Portugal, Iceland, Ireland, Greece and Spain] the most boorish animals on the farm, and [I have taken it upon myself to call the U.S. state budget crises] the story of CAIN (California, Arizona, Alaska, Illinois, New York and New Jersey), the seven most rotten pillars of our union, and (Un)Abel, the country as a whole, which is (Un)Abel, i.e. unable, to do anything about the impending crises. Given the current political climate and implicit anti-bailout mandate of the new Congress, the Federal government might be powerless to do anything but accept painful state defaults. Before we know it, we could all be ancestors of evil... 2011 could be the year that CAIN starts to face some serious trouble, and may need some serious help to avoid killing his brother (Un)Abel! Words: 1529

Boston University economist, Prof. Kotlikoff, maintains that the U.S. cannot end its fiscal crisis by doubling taxes, as the International Monetary Fund suggests, or further stimulus spending [as Bernanke is doing] because it will simply increase the debt. [Instead he has some radical proposals of his own.] Words: 704

The magnitude of current private and government debt, coupled with massive unfunded contingent liabilities for promises of future services to their citizens, will prove to be impossible for many nations to fund. Massive inflation in the money supply will become the preferred vehicle to deflect the default monster and will result in vastly devalued currencies and price inflation as a prelude to default. Such action will be a desperate attempt to buy time to stave off the inevitable and will result in social unrest caused by persons whose comfortable lifestyle and elevated standard of living is about to disintegrate before their very eyes. Words: 1525

Let's get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills. What it can and must do is radically simplify its tax, health-care, retirement, and financial systems, each of which is a complete mess... otherwise we are going to see dramatic increases in taxes, interest rates and consumer prices [with a resultant major decrease in our standard of living] and a dramatic increase in [the number of Americans living in abject] poverty. Words: 835

Increases in spending and liabilities along with decreases in foreign lending equals a recipe for disaster. So, where will the money come from? This is a job for the printing press. While we are certainly facing deflation in the near term and a very choppy market, the groundwork has been laid for hyperinflation, soaring interest rates and exploding gold and silver prices. Words: 945

2010 will be remembered for the rest of our lives as Armageddon 2010. Things are getting out of control. We are all about to take a cliff dive together into who knows what?! We Are Doomed! The world is now on its road to ruin and there is no action, no leader and no new amount of printed money that can save the world or prevent a hyperinflationary depression. Words: 1716

It would appear that the U.S. is in an untenable position - between a rock and a hard place - in an inescapable debt trap - where the options are, at best, dire - hyperinflation or a deflationary depression! It would seem that all we can do is ride out the storm in a boat laden with gold. Words: 2283

The U.S. owes the most; it is borrowing the most; and its borrowing needs in the future will increase exponentially. This leads to only one possible conclusion. The United States is hopelessly insolvent. Words: 935

Given that governments are reluctant to take their lumps now, what are the odds that they will do the right thing — outright default and debt restructuring — three years hence when the debt bubble is that much larger, the economy is in worse shape, and the pain of default and austerity is much higher than today's? The words "slim" and "none" come to mind. The world is firmly ensconced on the path to an inflationary depression. Words: 1119

It is clearly evident that America's debt picture is truly astronomical and, like the situation with Greece, the debt cannot, and never will, be repaid. Indeed, any way you look at it, the consequences for the United States, let alone the many other haunted economies, are grim, dismal - even disastrous. Words: 1166