Guess they were off by about 11 years.
Posted on 11/02/2009 5:51:52 AM PST by markomalley
The idea that the government of a major advanced country would default on its debt -- that is, tell lenders that it won't repay them all they're owed -- was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn't. Well, it's still a very, very long shot, but it's no longer entirely unimaginable. Governments of rich countries are borrowing so much that it's conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?
The question is so unfamiliar that the past provides few clues to the future. Psychology is crucial. To take a parallel example: the dollar. The fear is that foreigners (and Americans, too) will lose confidence in its value and dump it for yen, euros, gold or oil. If too many investors do that, a self-fulfilling stampede could trigger sell-offs in U.S. stocks and bonds. People have predicted such a crisis for decades. It hasn't happened yet. The currency's decline has been orderly, because the dollar retains a bedrock confidence based on America's political stability, openness, wealth and low inflation. But something could shatter that confidence -- tomorrow or 10 years from tomorrow.
(snip)
Deprived of international or domestic credit, defaulting countries in the past have suffered deep economic downturns, hyperinflation, or both. The odds may be against a wealthy society tempting that fate, but even the remote possibility underlines the precariousness and the novelty of the present situation. The arguments over whether we need more "stimulus" (and debt) obscure the larger reality that past debt increasingly constricts governments' economic maneuvering room.
(Excerpt) Read more at washingtonpost.com ...
Your move is the smartest thing in your list.
I didn’t buy the (metal) gold and silver, but I am invested in precious metals funds - for what that’s worth.
The “hard currency” of the future may not be gold and silver at all. It very well may be lead and brass and powder and primers.
Is America Broke?
We are not only broke we are Bankrupt for cry’in out loud.
Get a clue ComPost.
Can’t be broke. Terms of the debt contract is payment in dollars - which the gov’t can print as many of as they like. (Doing so would destroy the economy and any future chance of borrowing, but so would refusal to pay up.)
in the US, you ARE the government. And as it is unlikely you have spent 100,000 dollars on luxuries you cannot afford, it follows that someone else has done it for you.
“The level of inflation required to “inflate our way out of debt” will cause an economic collapse on the order of Zimbabwe.
I believe this is their actual goal, though.”
You NAILED it. Just one opinion from one FReeper who has spent 30 years in high finance.
Once ammo imports are banned their value will skyrocket. The O will see to it - if not by an outright import prohibition, then by signing a treaty forcing the exporters to stop sending any here.
Reduce the deficit by $1T in just 3 years? What’s who smokin’?
I still can’t get my reasoning around the notion that they WANT to cause such an economic collapse. Have to believe it’s a matter of cognitive dissonance, that they just can’t conceive of such a conclusion, that they believe in earnest that they can spend their way out of it and that their policies will succeed in creating such wealth & prosperity (like all Marxists).
Please convince me otherwise.
Guess they were off by about 11 years.
Inflation is the way a country pays the cost of war and social Ponzi schemes. We have been in wars for a 100 years and Ponzi schemes for 75.
You mean like taking 15% of someones salary in exchange for a return many years later... only to change their tune and tell people they won’t get anything, yet they must keep paying??
Hmmm... sounds familiar
The best column I’ve read, illustrating your very point:
http://www.321gold.com/editorials/price/price102909.html
The theme is “Time to end WW II”
When Carter started forcing the banking industry to give away loans to the beggars of ACORN and SEIU dependency, the amount of resource rich lands into federal reserves increased dramatically as derivatives gathered momentum. The democraps have a plan, they've had a plan for a long time. The federal oligarchy has millions of acres of resources they can give to our creditors, giving them control over swaths of America in exchange for continuing the loans the democrats use to run their red oligarchy.
Because the politicians (Ds and Rs) have educated the American people to live on credit, so at the brink of 'un-trustworthy for loans', the federal oligarchy will hand resource rich federally controlled lands over to the creditors for raping out the resources ... and these bastards will ignore the piles of red tape restrictions which have prevented exploitation of those resources for American use. The pollution will be ignored to pay down but never pay off, so the democrat oligarchy can continue to keep America indebted to our natural enemies, the commies and socialists of China, Russia, and South America.
And if you doubt that explanation, place into your calculus the fact that we have foreign enemies who have been waiting for the most effective time to spiral our now feckless economy downt he drain, ending American dominance in foreign power struggles. Al qaeda will attack U.S. again and end the democrat's controlled crashing of the American economy, plummeting our now lacking in resilience economy into indenture to a world banking/governance system hallmarked by cap and tax and government complete control of healthcare and any industry even remotely associated to same ... like fast food joints who will already be closing in droves as the people no longer have 'disposable income'..
It Is Japan We Should Be Worrying About, Not America
"Regime-change in Tokyo and the arrival of Yukio Hatoyama's neophyte Democrats – raising $550bn (£333bn) to help fund their blitz on welfare and the "new social policy" – have concentrated the minds of investors at long last. "Markets are worried that Japan is going to hit a brick wall: the sums are gargantuan," said Albert Edwards, a Japan-veteran at Société Générale."
"Simon Johnson, former chief economist of the International Monetary Fund (IMF), told the US Congress last week that the debt path was out of control and raised "a real risk that Japan could end up in a major default".
[snip]
bump for later reading
Did you or anyone else see an article at the Bloomberg site which was about the unemployment benefits the senate would be voting on this week? In it, it had something about the new home ownership credit and then there was a tidbit about extending a $6500 credit to those who have been in their homes for at least three years???? I did not fully understand this.
That would be the better question
Go broke? Haven’t they noticed that we have been borrowing billions and billions each year just to keep thigns going? We are already broke and many of us know what is just over the horizon and it isn’t going to be nice.Once all the government checks start bouncing thigns will go rapidly downhill fast. IMHO it is just a matter of time until China quits buying our debt.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.