A vicious upward debt spiral is gaining momentum. The budgets of most advanced economies, excluding interest payments, need 20 consecutive years of surpluses exceeding 2% of gross domestic product – starting now – just to bring the debt-to-GDP ratio back to its pre-crisis level.
Read More »Massive Debt = Dollar Collapse = High Inflation = Likely Depression (+4K Views)
The value of a currency is determined by a number of variables. In this article, I will focus on the dynamics of demand, supply, current account deficits, and aggregate government debt.
Read More »Political “Blame Game” Will Adversely Affect Your Portfolio – Here’s Why & How
The S&P 500 continues to hit new all time highs, but is your portfolio built on a house of cards? The politics to kick the proverbial can down the road may unleash dynamics that could be hazardous to your wealth. Here's why and how to protect your portfolio.
Read More »Goldrunner: Here’s My Take On All That Debt Ceiling Crap (+2K Views)
All of the crap about the debt ceiling is really about plausible deniability, delivered as propaganda. Threaten deflation and austerity to make a big scene, and force the people to demand the debt ceiling be raised. This is all part of the “show deflation” at critical times when they want to print more aggressively with no blow back.
Read More »"Liquidity Trap" is Fast Approaching
When velocity is low the nation essentially winds up in a "liquidity trap" which is a situation where monetary policy is unable to stimulate the economy either through lowering interest rates or increasing the money supply. This was the condition that Japan found itself enveloped in from 1989 to present. We expect the same problem in this country and hope (really hope) to be wrong. Words: 672
Read More »Telling it Like It Is: Monetary Policy, the Federal Reserve, and the National Debt Problem
The budgetary and fiscal crisis right now has made many political issues far clearer in people's minds. The debt dilemma is a challenge and an opportunity to set America on a freer and potentially more prosperous track, if the reality of the situation is looked at foursquare in the eye. Otherwise, dangerous, destabilizing, and damaging monetary and fiscal times may be ahead. [Here is how I see the situation and how I would propose solving the inherent problems.] Words: 3518
Read More »Consequences of Country's Debt Complacency Could be Catastrophic
Our leaders will eventually face an Armageddon unlike any since the Civil War unless they must either muster the courage — and the support of the people — to accept the pain and make the sacrifices of a lifetime … or face the downfall of America. Words: 1086
Read More »Will Sovereign Debt Tsunami Drown All the PIIIGS and Then the US and UK?
With all the attention being focused on whether or not there will be a sustainable recovery in 2010, the potential for a wave of sovereign-debt crises following the wake of the global recession has just recently started to appear on people's radar screens - and such a wave should not be surprising. Words: 2541
Read More »Here's the Best Way to Protect Against both Inflation AND Deflation
There are very compelling arguments for both inflation and deflation. The answer will eventually depend on decisions made in Washington and how people react to those decisions. For now, let’s stop fooling ourselves and admit that we don’t know. It is a problem that has to be dealt with and there is no easy medicine. Either path will be painful, but that’s what we get for our two and a half decade debt binge. Words: 1142
Read More »Bond Market on Brink of Collapse (+2K Views)
Secretly, the Fed is in a panic to ward off a bond market collapse! They know that, sooner or later, they MUST send the message that they're serious about cutting back on their mad money printing. The danger of course, is that foreign investors will get an entirely different message: that Washington's efforts to fight the most severe recession since the Great Depression are waning. If that happens, you could see turmoil — not just in the bond market, but in every asset class imaginable. Words: 770
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