Comments on: America Will Soon Owe More Than Its Citizens Are Worth

By: Myron Pauli

Myron Pauli — Thu, 08 Jan 2009 13:22:18 +0000

“China Losing Taste for Debt From U.S.” See:

http://www.nytimes.com/2009/01/08/business/worldbusiness/08yuan.html?partner=rss&emc=rss

To get more overseas money, we have to offer more interest rate which is “anti” stimulus – so the Federal Reserve Counterfeiters are between a rock and a hard place….

Nevertheless, I see the big financial tsunami coming closer to 2020 but I agree with John Danforth in that it will be quite sudden and overwhelming.

By: John Danforth

John Danforth — Thu, 08 Jan 2009 04:08:51 +0000

No amount of growth can ever repay that debt, and we don’t have any prospect of growth anytime soon.

America will repudiate those debts — by paying them off in worthless, devalued currency. The INSTANT the holders of that debt begin to question whether they will get paid back in devalued dollars or worse, they will try to be first in line to sell before the value plunges. The dollar will tank overnight. The government will be unable to borrow at any interest rate, so the Fed will start printing money.

In Weimar Germany, people were surprised at how quickly hyperinflation wiped them out.

This scenario looks ever more likely. I won’t be surprised if it happens sometime this year. The ‘stimulus’ will help bring it on.

By: Myron Pauli

Myron Pauli — Wed, 07 Jan 2009 15:57:05 +0000

I think we can muddle through the next decade by cutting back on plasma TV purchases, driving used cars a few more years, and such – but by 2020, the TERABUCK debts and the baby-boom retirees (moi aussi!) will completely overwhelm the system. The US might wind up collapsing Somalia-Congo-Pakistan style with underground economies and local warlords taking up when the Federal Reserve counterfeiters completely run out of steam. Those who can may live in little gated communities, South African style while the governments lose any ability to “manage” the country. Having tried to micromanage the entire world, the government may not even be able to provide rudimentary law and order in 20 years.

By: Steve Hogan

Steve Hogan — Wed, 07 Jan 2009 04:23:21 +0000

So what happens when the country with the world’s reserve currency defaults on its debt? Is there a single sane human being that thinks we will ever pay this off?

[Your savings and assets, for one, will continue to depreciate.–IM]