For the second time in the last fifteen or so odd years, Argentina has defaulted on its debt and...in the process the U.S. has inadvertently further accelerated the decline of the U.S. and the dollar's dominance. Let me explain why that is surely the case.

An Argentine friend queried me about Argentina's debt default yesterday asking me for my thoughts on the subject. Here is my reply in the form of an open letter to my friend and to the Argentina government should they be interested. They should.

Did you know that financial institutions all over the world are warning that we could see a mega default on a very prominent high-yield investment product in China on January 31st? We are being told that this could lead to a cascading collapse of the shadow banking system in China which could potentially result in sky-high interest rates and a precipitous plunge in credit. It could be a Lehman Brothers moment for Asia and, since much of that "hot money" has flowed into stocks, bonds and real estate in the United States, that would be very bad news for the U.S. as well. [Let me explain.]

If the debt ceiling deadline (approximately October 17th) passes without an agreement that would be extremely dangerous - and if the U.S. government is eventually forced to start delaying interest payments on U.S. debt (which could potentially happen as soon as November), that would be absolutely catastrophic.

When government is wounded, trapped and desperate, it lashes out like a wild animal. Survival in the political class is just as strong a drive as it is in the wilderness. I don’t know how government will lash out, but you are likely to see laws, restrictions and behavior you never imagined....Washington has demonstrated it will “print money” in whatever quantities necessary to stave off a sovereign bankruptcy and a Great Depression but this strategy cannot work forever because existing debt is already too high to be serviced. It is only a matter of time before the U.S. economy succumbs - unless it engineers a 'soft default' [which will save it's ass and get you shafted! Let me explain.] Words: 1394

I want you to under­stand the grav­ity of what Europe is fac­ing; Europe has BET THE FARM and the croupier is about to roll the dice. We are all fac­ing a momen­tous instant in time and all of the noise in the back­ground is quelled by the show­man announc­ing the main event. Let’s Roll! Words: 625

Meredith Whitney has resurfaced on the subject of U.S. Municipal defaults stating that a "tidal wave" of defaults in the municipal bond market is still building and will eventually hit the United States [although her views are at odds with those of] Moody's Investors Service [who only see] a small but growing number of defaults. [Here is a critique of her latest views.] Words: 385

Barclays Capital has done the math on what the events in the past several days reveal for Italy and the math is not pretty. The conclusion is that "Italy is now mathematically beyond point of no return." Words: 583

A predictive software program called Senturion, developed for the U.S. military and sporting a 85% accuracy rate, has concluded that Greece is going to default. [Let me explain further.] Words: 244

Republicans and Democrats probably will reach a deal to pay America’s bills before the U.S. government runs out of cash at the end of July - probably - but in the meantime it has pushed the United States — and the world economy — toward a fearsome shock at a time when the world economy cannot afford any more shocks. If a U.S. default did happen, however...what would it mean for Canada? The answer is surprising. Read on. Words: 832