As an author and blogger, I generaly rely on written words to describe what I see going on and where I think things are headed. But as the old saying goes, sometimes a picture is worth a thousand words. For a mesmerizing -- and disturbing -- graphical overview of what a house of cards really looks like, check out U.S. National Debt Clock: Real Time (screen shot below):
A pictures is worth a 1000 words. Thank you. I'm going to "link love" this article at my site w/i next 48 hrs.
Posted by: Finance Junkie | June 04, 2009 at 11:57 PM
Is there anybody out there that still believes the U.S. debt will ever be repaid? Come on, if you believe that then you must also believe in Santa Claus, LochNess monster and other flights of fantasy.
Here's a question... has the U.S. ever paid more that just the interest on its debt (i.e. actually started to pay down the principal)?
Does anyone out there think that conditions in the US. (for the foreseeable future) will improve to a point that there will be extra funds to devote to pay down the debt?
No. I can't foresee any way that the U.S. debt will NOT be defaulted, almost assuredly by inflation.
That's the way it will go down.
Posted by: Robert | June 05, 2009 at 12:43 AM
Sir,
I appreciate your books and your blog. Did you see the comments that Jim Rogers made about the "dollar crisis", and the Dow hitting 20000-30000 under a hyper inflationary environment? I was curious what your thoughts were on this issue? Rogers said that "he would not be short on this market because of it. I have been watching the dollar like a hawk as well as the indexes, and the thought had crossed my mind acouple of times that the day after day rise in the equity markets could have more to do with the weakening dollar rather than "green shoots". What I see that makes me think that the dollar crisis is further down the road is that this recent rise ingold over the past month has been on light volume via GLD as a gage.
Posted by: Jason daniels | June 05, 2009 at 01:34 AM
Will this trigger the 2nd wave of our global economic crisis?
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5446658/European-banks-in-spotlight-as-Baltic-crisis-hits-Sweden.html
Posted by: SomeBody | June 05, 2009 at 02:01 AM
Robert: The actual $ amount of the US national debt went down in the late 1940's, which was also a period of rapid inflation. On a percentage basis vs. GNP, the drop was even more noticeable. Debt as a percentage of GNP bottomed out in 1970's and has been climbing irregularly ever since, with a brief but noticeable downturn in Clinton's second term.
Posted by: Rocky | June 05, 2009 at 10:25 AM
The US has the ability but not the willingness to fix its financial problems, so maybe the end result will be a financial collapse in the US, a decision by Arab states to launch another war against Israel while its chief sponsor (the US) is in chaos, a nuclear response by Israel and the outbreak of WWIII. If this sounds far fetched, think about the outbreak of WWI, which was triggered by the assassination of a mere Austrian archduke. Canada sustained more deaths in that war (about 67,000 deaths from a population of about 8 million) than the US did in Viet Nam (under 59,000 from a population of about 200 million). A financial collapse in the US will not be confined to the destruction of your 401K plan. The politicians in Washington do not have long to get the country on the road to financial stability. The developing financial crisis in California might give them and us an idea of what lies in store for the rest of the country. Based on current spending commitments and projected tax receipts, the Golden State is expected to run out of cash in July according to the Terminator himself.
Posted by: Rocky | June 05, 2009 at 10:47 AM
Will the Canadians send troops to their borders to stop poverty-stricken Americans immigrating illegally?
Posted by: dearieme | June 05, 2009 at 11:42 AM
The "debt clock" table indicates that U.S National debt is almost twice U.S GDP. I hope S&P doesn't see this or we're sure to get a major downgrade from our lofty AAA rating. After all, they downgraded U.K. debt because they were "in danger" of having their National debt "approach" 100% of GDP. And the U.S. is almost 200% of GDP?
While I agree we are in a mess, this table is grossly misstated.
Posted by: Conrad | June 05, 2009 at 10:43 PM
The latest Department of Commerce data shows the US GDP running at an annual rate of $14.1 trillion (released 5/29/09). Someone needs to fix the Debt Clock table.
Posted by: Rocky | June 06, 2009 at 09:30 PM