Former US Comptroller General on Debt

Mr Neutron

Well-Known Member
THURSDAY, MAY 26, 2011

Spiraling debt points to dollar free fall; 'there won’t be anyone to bail out US'
IBTimes


The Republicans and the Democrats are united about the need to rein in government deficits that threaten to overwhelm the economy, but they are sharply divided over how to do it.

The Republicans want to cut benefits and overhaul the health program whereas the Democrats, led by Vic-President Joe Biden, have presented a plan under which $1 trillion can be saved by trimming spending over a period of ten years.

However, there are some experts who are not convinced by either plan to address the serious crisis the nation is plunging into. There are some who think the fiscal shape of the US is worse than that of debt-plagued countries like Italy or Spain.

"The financial condition of the United States is much worse than advertised," said David M. Walker, former chief of the U.S. Government Accountability Office, according to the Wealth Daily.
In 2006, when the federal debt was only $8.5 trillion, Walker had warned that the fiscal path was unsustainable. Currently the debt has ballooned to $14 trillion, which is an increase of about 40 percent.

Walker now warns that the unsustainable debt is pushing the country into a danger zone. He warns that the worsening of the debt crisis means dramatic hike in interest rates, a free fall of the dollar and higher inflation. The negative impact of this scenario will be felt across the world, bedeviling economic recovery everywhere.

And there won't be anyone to bail out America, he says. ”This ship, in other words, is one that can be easily sunk."

"Today, the mammoth U.S. Government spends $6 billion a day more than it brings in, causing the nation to slam into the $14.294 trillion debt ceiling. That's over $45,000 for every man, woman, and child in America," Steve Christ wrote in Wealth Daily.

The piling debt then takes a toll on dollar. The government borrows more and more to bridge the gap and prints dollars to finance its entitlement-oriented budget. In this process, U.S. securities lose the sheen over a period of time and critics argue that there will be a time when international investors refuse to have anything with U.S. government debt. This will cause a nosedive in dollar's value.
The critics accuse the Federal Reserve mandarins of engaging in the outright destruction of the dollar. The Fed's Quantitative Easing policy has caused the rapid deterioration of the country's stability, says Luke Burgess.

"... With an additional $80 billion flooding the money supply every month, the price of everything inevitably skyrockets... It's a Mad Hatter monetary system that's literally crippling our very livelihoods," he adds.

He reasons that since 1971, the dollar hasn't been backed by anything other than the fact that it is the world's reserve currency. "The need for dollars to buy international goods is the only thing that gives the dollar any strength at all." However, as billions of dollars are pushed on to the market through the Quantitative Easing program, its value suffers.

"...it's the Fed's constant devaluation of your dollar — killing your purchasing power with each passing day," Burgess writes. He says that the dollar dropped 10 percent in value since the Fed began its second round of money pumping.
POSTED BY INTERCEPT AT 5:13 AM
 
But odumbass has an extra 20 billion for other countries, not to worry though soon the country will belong to the NWO and we will all be screwed.
 
war sucks, I thought we were going to develop alt energy?
If we could develop a way to power an SUV with human flesh we would invade Africa tomorrow.

Its these wars that are killing our money, in search of petroleum products.

All in the end Facebook toppled 8 middle east governments?
 
In this process, U.S. securities lose the sheen over a period of time and critics argue that there will be a time when international investors refuse to have anything with U.S. government debt. This will cause a nosedive in dollar's value.
there is no Foreign buyer of US Debt, the Fed has been purchasing 80% of the US Treasury auctions, IE we are monetizing 80% of our own debt. China is a Net seller, Japan is a seller, pretty soon the whole world will be a seller of US Treasuries. No one will be buying until rates move upward, when rates move upward the whole system unravels. Housing would lose 10% overnight. The Fed has only one thing it can do. QE Infinity. They will end QE2 at the end of June, how long will it take before QE3 under a new name appears?
 
Back
Top