Posted on 03/25/2010 3:02:00 AM PDT by Scanian
The ratings agency Fitch just cut Portugal's bond rating to AA- -- a clear sign that the insolvency crisis that began in Greece is far from over. And don't think it's merely a problem for the European Union. In fact, a debt-driven collapse of the dollar may be closer than most Americans realize.
Start by looking at the levels of deficits and debt that can trigger problems. The "tipping point" we see in Greece (and the "contagion countries" on the edges of Europe) occurs when debt exceeds 100 percent of the country's GDP. That's the signal that a nation will be unable to pay its bills -- jeopardizing financial stability.
Now look at the impact of the increases on US spending and borrowing over the last 18 months: The Congressional Budget Office predicts that deficit spending will drive the federal debt to almost $19 trillion by 2015 -- nearly doubling US debt since the TARP bailout was rolled out in late 2008.
(Excerpt) Read more at nypost.com ...
I hope the Trillion Dollar Bill has Obummer’s face and name on it.
So apparently it is the Double Whammy Economic Model. First your drive up debt creation to historic levels, then to negate the resulting inflationary pressures, you crash the Real Estate Market. Then when you discover that you need to create even more debt, you crash the Health Care Market. Guess it is kinda of a yin and yang thing. And what lies at the end of that Skittles Unicorn Rainbow ? Probably that same Leprechaun that stole 20 pounds off me on the streets of London a few years back.
Hate to say it, but this is EXACTLY what we as a society deserve. No us FReepers mind you, but (unfortunately) we are part of a larger society that wants ever more free stuff—the eventual cost be damned. We are at the point where the system has to totally unravel before for (as a majority) stop listening to the Liberals.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
-~~Ludwig Von Mises
Thanks to Obama, the Trillion Dollar Man, we don’t even have a chance to capitalize pure dumb luck, even if we are that lucky. The guy closed off every last shred of faint hope.
People misunderestimate just how long a modern government can keep their balls in the air. In the old days it was just a keen eye and quick responses. Now with computers it is all forecasting where their balls will be at any given moment in the future. This will lead to overconfidence of course, so it will take longer, but be bigger when it happens. Their balls will be crushed!
This is the way it has to end. I pray later than sooner so I can avoid it, but things are happening so quickly now, the world economy is just steadily decaying, I suspect something big like this will occur between 2015 and 2020.
You’ve been right all along. There is no changing basic laws and principals.
I agree completely.
On that same note, I constantly underestimate the timeframes. The government always drags out the inevitable longer than I think they will. You would think by now I would learn to adjust my predictions knowing how good they are at delaying the inevitable consequences. I don’t. I still expect things to occur too fast.
But you are right. They will delay and the crash will be larger as a result.
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