US Debt and Default Talk
July 29, 2011, Submitted by: Ken Tweet
Jim Rogers:
The US is the biggest debtor nation in the history of the world. This cannot go on forever. Eventually, the creditors are going to say “no more, that is the end of the line”.
If you think the problems are bad now, you wait till we do not have any more credit, you wait till the currency collapses, interest rates going through the roof, inflation going through the roof. It`s not going to be a pretty picture. There is going to be social unrest. It`s going to be a mess.
The sooner we deal with it, the better.
Marc Faber:
“Yes, I’m sure there will be an agreement, but it doesn’t solve the fundamental problem of excessive debt and of further, very substantial deficits. They’ll iron out something with lots of compromises and with spending cuts that are backloaded, in other words they won’t happen immediately. As we go along say in three or five years’ time when these spending cuts should occur and when the tax increases should occur, nothing will happen in my opinion.”
Martin Armstrong:
Being the world reserve currency is something that obviously Congress does not comprehend. About two-thirds of central bank reserves are in US treasury paper. What is going on in Washington right now demonstrates the total lack of comprehension of what is the role of the dollar (i.e. the flight to Swiss & gold).
This also illustrates my point that the world cannot afford the dollar to be the reserve currency anymore because we are plagued by internal political conflict with no real hope in sight. What is going on in Washington now seems to be a strange secret ritual centered on a mystic suicide cult or a plot for the Manchurian Candidate
Jim Sinclair:
Financial TV actually has a countdown clock to the day of Default. I still feel that a compromise at the last moment that offsets the default but does not do anything meaningful in the over the top debt problem will come.
There is nothing going to happen that is going to offset the borrowing demands of the US Treasury in a significant way. Rating Agencies who have not hesitated to downgrade everything Euro cannot hide from the sloppy process going on now in the Senate and House.
IMF Chief Christine Lagarde:
…has warned overnight that the global reserve currency status of the dollar is at risk due to the “worrisome” US debt debate. “One of the consequences could be a decline of the dollar as a reserve currency and a dent in people’s confidence in the dollar.”
Robin Griffiths:
Strategist for Cazenove Capital …you “have to own” gold. He said that the real inflation adjusted high from 1980 (using the more accurate RPI) was over $8,500 per ounce and gold could reach that level in the coming years. He said that silver was volatile but would likely outperform gold. Fiat currencies are being “printed into oblivion,” and so not owning gold is “a form of insanity.”
Chris Martensen:
On one hand, I am glad that Washington DC is finally (!) talking about the unsustainable borrowing and spending habits of the United States. It had to happen sooner or later; better now than never.
On the other hand, the tenor and substance of the dialog and proposals reveal just how far up the creek we really are and just how hopeless it really is to plan on something sensible emerging. After trying to make sense of the various proposals I think I can summarize them all with a single phrase: You’d better be ready.
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The United States is really already in default right now because anytime you reach any credit limit, even someone’s credit card, and you have to ask for more credit, it is a failure. There is a ceiling to credit, this is why they have credit limits on credit cards because people are too stupid to understand not to overspend. People are so irresponsible that they would spend a billion dollars if they could on pure junk because they had the credit there to do so. The politicians have already proven themselves to be the same as the common person to charge everything (PORK) like there is no tomorrow, which may just be too accurate, there will be no tomorrow. Then those that just do not get it that there has to be more revenue coming in to pay for the just the interest on this debt monster are just as bad.
I remember those cartoons in which the wife went out yelling “CHARGE IT” without any concept on what that actually means. You would think that those in control of the countries would have more mentality than what children have seen on cartoons, but they don’t. I would think that a monkey would understand the simple notion you don’t buy what you cannot afford. It is a pure absolute miracle that those idiots, and I mean flaming idiots, in charge have not pushed all the buttons and started World War 3 yet. There is a finite point and when that is reached LOOK OUT!
I’m pretty sure we’ve been in trouble for a long time now and even though politicians are discussing the debt right now, they’re not discussing the right things to truly correct our problems! They will simply choose to “sweep our problems under the rug” so it’s the next guys problem until we just can’t fit anymore junk under the rug.
The U.S. has technically defaulted before.
pour exemple
(a) When FDR devalued gold from $20 to $36 an ounce.
(b) Nixon going off the Gold Standard.