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Colossal Mess In the West: US Debt
Mark Faber, the Swiss Investor, states that the debit burden in the US will grow for 5 - 10 years and the fiscal cliff will become a fiscal Grand Canyon. He believes that bureaucracies must be reduced by 50% or more, the S & P will fall by 20%, there are no corporate earnings and no industrial growth.
He believes that the Fed and increased regulations will continue to kill the economy.
Faber argued that the political systems in place in the West would allow the debt burden to continue to expand. Under such a scenario of never-ending deficits, the Western world would rack up huge deficits.
He feels that change can come by peaceful reform or revolution but the US is closer to revolution.
What do you think? Is he right? Is the economy important in this election? Has it been given the attention it deserves?
edward long 100+
Mitch SMith 50+
If they did, it might precipitate a collapse in confidence that would collapse the whole house of cards.
So, in that regard, i think they are both acting responsibly.
The collapse of confidence is going to occur as soon as those at the end of the credit chain call the debts in.
I imagine that the global banking cartels are sitting on these end-chain debts. So the whole thing can continue on funny-money until they decide to jerk the chain.
I don't think they will jerk that chain outside of a few demonstration events to let everyone know who is in charge.
It is certainly not in their interests to pull in the whole scam, so the debt crisis does not actually exist - unless you want to get out from under the threat.
There is probably a good arguement for getting out from under the rule-of-banks simply because it was built on usury.
Usury cumulatively syphons value from economies by a net inflow to the usurer in the form of currency. The usurer does not generate new value but relies on the value production of the users of the currency. While ever the surplus of value exceeds the usury, the effect is not percieved.
In a perverse kind of way, the action of usury mimics the expiry of value - keeping the currency roughly in-step with the true current value, but the excess currency builds up in the legers of teh usurer in the form of ultimate power.
The only way to address this structural imballance and return soveriegnty to nations is to return currency to current value. The gold standard helped, but still has the problem of disconnect from real current value - it can be hoarded.
If the currency was structured to better allign with actual productivity, then manufacturing would become a priority again, while energy expended on bogus financial instruments would collapse and release that part of the workforce back to the generation of real value. But you gotta do it in a snap - before your chain gets jerked.
David Hamilton 50+
pat gilbert 50+
The last 2 presidents and congresses have saddled the U.S. in a big way. But the hockey stick started in 1971 when Nixon took us off of the gold standard and the rest of the countries went off of Bretton Wood. This has financed more and more growth at the Federal level.
Government was shrunk by 50% under Coolidge and Harding. I doubt that could be done now but you could sure do a lot. Getting rid of some these agencies would be a 2 for 1 deal in that they would free up regulations and reduce government cost. Also the many subsidies could be gotten rid of with little effect.
The economy probably has not gotten the attention it deserves because O sure doesn't want to talk about it and many of the voters are asleep.
On the other hand if the free stuff is taken away too quickly there will be riots, not a maybe.
To me the imperative is that the voters be educated. It can be done.
If this is not resolved the world will fall as the U.S. will take many countries with it.
John Smith 30+
pat gilbert 50+
John Smith 30+
pat gilbert 50+
Robert Winner 50+
Pat, am I on the right track here. You do make a old man do a lot of research before I join the fight.
Bob.
chen xin
that is a good ads
Krisztián Pintér 200+
people do not feel and do not care about the core issues. the shrinking capital stock, the reduced production capabilities, the suffocating small businesses, the completely misallocated capital distribution, the trade balance deficit, the impossible long term promises the government will fail, the lack of creative power and adaptation, and so on. these revelations are due in the next one or two decades.
R H 20+
John Smith 30+
Japan has survived much higher debt, Greece couldn't cope, the way the US structures its debt and the confidence people have in its economic strength resembles Japan more than Greece.
"He believes that bureaucracies must be reduced by 50% or more, the S & P will fall by 20%, there are no corporate earnings and no industrial growth.
He believes that the Fed and increased regulations will continue to kill the economy."
Taxwise the US is a great place to have a corporation in because effective taxes are quite low, but other factors (infrastructure, health care & education affordability), ones that are handled by government in other developed countries, are lacking. But of course Mr. Faber wants to get rid of regulations because that will make him money.
"Faber argued that the political systems in place in the West would allow the debt burden to continue to expand. Under such a scenario of never-ending deficits, the Western world would rack up huge deficits."
Not all Western countries are like that, a bunch were running surplusses as late as 2008, including some prominent "welfare states", even the US was running a surplus in 2000, but then Bush pulled out the credit card to (not) pay for wars and tax cuts for the rich.