Sunday, May 15, 2016

Financial Chaos Is Rapidly 
Approaching America
"I personally believe we haven't been bearish enough on the eventual social and political fallout from the Greater Depression. Nothing is certain, but the odds are high that the U.S. is going into a time of troubles at least as bad as any experienced in any advanced country in the last century .. Economic bankruptcy accompanied by financial chaos—is quickly approaching for the U.S. government. With deficits over a trillion dollars per year for as far as the eye can see, the U.S. Treasury will very soon be unable to roll over its maturing debt at anything near current interest rates. The only reliable buyer will be the Federal Reserve, which can buy only by creating new dollars. Within the next 24 months, the dollar is likely to start losing value rapidly and noticeably. Foreigners, who own over 7.3 trillion of them (including T-bills and other IOUs), will start panicking to dump them. So will Americans. The dollar bond market, today worth $40 trillion, will be devastated by much higher interest rates, a rapidly depreciating dollar, and an epidemic of defaults. And that will be just the start of the trouble. Since the U.S. property market floats on a sea of debt, it’s also going to be hit very hard, again, this time by stifling mortgage rates. The next step is up for interest rates. Forget about property owners paying their existing mortgages; many won’t be able to pay their taxes and utilities, and maintenance will be out of the question. The pain will spread. Insurance companies are invested mostly in bonds and real estate; many will go bankrupt. The same is true of most pension funds. If the stock market doesn’t collapse, it will only be because money is looking for a place to hide from inflation. The payout for Social Security will drop significantly in real terms, if not in dollars. The standard of living of most Americans will fall. This rough sequence of events has happened in many countries in recent decades, and they’ve survived the tough times. But it has the potential, at least in relative terms, to be more serious in the U.S. than it was in Argentina, Brazil, Serbia, Russia, Mozambique, or Zimbabwe."
- Doug Casey
LINK HERE to the article

1 comment:

Anonymous said...

Naah the U.S. buck is the best around. (which says a lot for th rest of them).