8/13/2010
The Bankrupt of America
‘The US is bankrupt and it doesn’t even know it. Economy won’t be big enough to handle US$4 trillion in entitlements owed to 78 million baby boomers.
Let’ get real. The United States is bankrupt. Neither spending more nor taxing less will help the country pay its bills….’ This is the heading and first paragraph of an article in Bloomberg, by Laurence Kotlikoff, Professor of Economics at Boston University.
Yeah man, The US of A is a bankrupt country. And it is still strutting its stuff everywhere thinking that it is still the big boy in town. But the best part of this fiasco is that they think that they can act rich and spend their way out of this rut. They are going to print and print more greenbacks for the Americans to go on spending. This is the happiest solution that anyone can ever think of. In fact it is ingenious. A bankrupt spending like a millionaire and as if there is no tomorrow. And the problem will go away.
When is America going to carry a bowl and go a begging in the streets of London?
Subscribe to:
Post Comments (Atom)
19 comments:
The US is showing great sympathies to flood sufferers in Pakistan and victims of oppressors at Iran, Afganistan, N Korea and everywhere except Sin. And here, we have people saying it is bankrupt. Are You or your cuntry richer? Why are your countrymen homeless and dying becos they got no money to seek medical treatments?
The US is bankrupt and they themselves know it. It is people who are still lending money to them that refuses to accept it.
And the people who are lending money to them are those people who depend on them to buy their products, so they must keep up the pretense, like a patient on life-support system.
If I am a charity(pennyless) and there are donors that keep giving me money to the extent that I got surpluses and invest them to make more money. Can You I am bankrupt or am I rich with donation money that will never run out?
> When is America going to carry a bowl and go a begging in the streets of London?<
That is quite unlikely.
The US dollar is the world’s reserve currency, and despite all the criticism of the US Federal govt, other central banks still but US securities and USD denominated assets to prop up their own weak toilet-paper monies.
Also the US is quick to the rescue (by currency swaps) of any failing economy – like the recent goings-on in EU. The US runs the IMF and the World Bank too.
The world needs America. The criticisms are often hollow. Even when bankrupt to the point that no more “fancy accounting” can interpret the hard-data any other way, the US rules because it has a monopoly on the fiat currencies of the world – all that paper money built on in a large part on a bankrupt country’s currency.
Man am I going to be laughing at the next crash! :-)
anon 305
Yes, the Americans don't rob and rape, they just scheme and con and if others want to be won over, you blame the Perpetrator
Uh, I'm going to call bullshit on that.
You can't cheat an honest man.
The other(s) (countries) willingly enter into agreements with the US. Sure the relationship might sour later.
Playing the "victim" of US domination grows tired after awhile.
Even the Chinese willingly bought all that US debt. They have no grounds to call "foul" -- they were fully aware of the system they were getting in to.
When is a bankrupt a bankrupt nowadays?
A bankrupt in the old days is often made penniless. A bankrupt nowadays makes others penniless.
Printing more and more greenbacks will delay the inevitable.
The fear is that when the greenback goes so low, will they abandon it and adopt another new currency. By then all creditors, like China, will be decimated for holding onto so much US$ assets.
When in desperation, we never know what the US will do.
As an individual you have little choice but to accpet reality the way it is.
When you are a govt you can define reality any way you want it, so that it serves your purpose of augmenting your power and influence, and/ or achieving your "policies".
anon 351
1. It is unlikely that there'll be another global reserve currency anytime soon
2. The US prints money, but other countries prints money based on the USD securities, and the "other countries" (including China) are worse at printing.
3. The US Federal Reserve is not going away anytime soon. There is too much money to be made by their money printing.
Ok, accept your claim that the US is bankrupted.
Are Americans homeless and not able to afford medical treatments?
The creditors of the US know that they had a problem of another case of too big to fail. Quietly they are unwinding the bonds and greenbacks they are holding.
There will be a time when they have spread their risk and they will just dump.
> There will be a time when they have spread their risk and they will just dump. <
I used to believe that, but don’t anymore. Dumping will cause the price to fall uncontrollably and fast. No matter how mush “risk” you try to mediate by quietly selling off, it won’t work.
Why?
Because the market already knows that China is reducing their exposure. But since they hold so much, it is hard to be “quiet” about it.
No country is "too big to fail". In the case of the US other countries will fall first before the US collapses.
Even with all their printed money, their capital structures are huge, their internal economy is huge and self-sustaining -- even using monopoly-banana money.
Sure, they will fall -- but it won't be anytime that soon.
It took 100's of years for the Roman Empire to collapse. They ruled the world for about 1200 years!
Perhaps we could see a gradual transition to a one world central bank regime - or a few regional currencies, which could easily be coordinated as a single global currency effectively?
But any advance towards such a goal would be extremely political.
The economic imbalances have not been addressed. Also debt is growing - though with private debt being converted to public debt, it makes defaulting much easier. Especially if you've got nukes and stuff.
When you can't pay your creditors... killing them seems to be an attractive option.
anon 458:
The world already has a global central bank -- the US Fed. It acts with its partners the IMF and World Bank to "bail out" countries that are in trouble.
The BIS in Zurich has been for many years the "central bank of central bankers".
I doubt the current fiat system based on a USD reserve currency will change. It has to totally FAIL and collapse before anyone has the political will to make changes.
Human beings in large groups (like nations) don't collectively make good decisions. Mass delusions are common because of the belief "oh well, we're all in this together", and entire nations will continue to exist on broken systems because legislatures can pass LAWS to actively deny the consequences of bad economics or simple arithmetic.
If you have $50 to spend, you cannot buy something which costs $100. However, if you are a central bank like the Fed you can.
All you do is write a cheque to yourself for $50 and deposit it into your bank account which now gives you $100 to spend. If you gave this answer in a Primary 3 maths exam you will fail, if you're adult and did this you'd go to jail for fraud or theft, but if you're a central banker, you'll get a promotion and a large increase in salary.
anon501:
The US pays its bills, because it makes sure it has enough "liquidity" to do so.
It is the "other" countries who default and have to be "bailed out" by the US Fed, IMF and World Bank: recently Greece, previously Russia, Argentina, Mexico, Thailand, Malaysia, Indonesia... and so on.
Increasing debt is no longer just "an option" in the US... it is now a necessity, a reality.
The whole currency system is based on debt, so the more you owe, the more "money" you have.
Try that shit in Pri 3, and the school will definitely call up your parents ;-)
Yeah, but the global central bank i.e. the Fed is controlled solely by Americans. There's no collective say in things.
btw your beloved Australia doesn't seem to be faring too well - with the huge private debt and property bubble. Unlike Greece and Spain, there's no European Union to bail her out.
China will "bail" Australia out by buying up all the mining industries, food businesses, freehold land etc.
China is now financially more powerful than the European Union.
So don't worry mate.
Do i read correctly to say almost All here are unanimously expecting the Ultimate Decay of the US?
Will its' fall sting or stench?? Sting as in the US Stooges will be affected by it.
patriot
Australia's fine. The Chinese and Indians have kept the economy afloat, and now ChIndia is owning more and more of Australia, and managing their holding well.
As long as there are good private managers of assets, the going is better -- not perfect, but not bad either.
The average Aussies tax payer is fucked -- there are debts to pay, and govt likes to tax... so the average idiot-sheeple-voter is going to be screwed -- no sympathy from me there. Since they support the "system", they can jolly well pay for it.
No matter which country I'm in, I adopt the "hotel" attitude -- the sheeple get the govt they deserve :-) So fuck 'em.
Last month an investment corp of the Chinese govt bought an old hotel -- one of th city's cultural icons. I support foreign ownership and "borderless" capitalism. As long as this sort of thing is going on, life is reasonably good.
I'll be casting my (spoilt) vote next weekend. Looks like I'm going to be writing vulgarities on the ballot again :-)
"No matter who wins the election, the government ALWAYS gets in."
Maybe not. Many political pundits have cast the scenario of a hung parliament. Fuck, I hope so...
Post a Comment