If you look at the real debt burdens of this country, the parlous state of the banking and financial markets, the interventions that the FRB is already taking in order to stave of an economic depression and add to the mix a dangerously mis-guided policy of rampant militarism,
Actually, you should pay more attention to the debt burdens of the world, not just the US. If you did, you'd understand that many nations are becoming so destabilized that they are contemplating default on their own national debt (held by western banks). And the result of the US permitting this destabilization to continue, both economic and political, is that our own economy will suffer.
The world has been in economic stagnation, and/or recession since 1998 when the Asian economic panic occurred (as well as LTCM). The US had been the only economy functioning at a decent growth level since then, the last functioning piston of the global economic engine, you might say.
Now we're faltering and the world is catching pneumonia as a result of the US catching cold. And if the major economies like Europe and Asia continue to contract, they could drag us down with them.
All of which creates fertile ground for extremist groups attempting to create a collapse of the western economic system in order to replace it with their own (in this case, Islamic Sharia).
This is why, much as I hate to admit it, I'm starting to pay more attention to what the global gold market is indicating. Gold prospers in times of global chaos and uncertainty. Since gold was the previous standard for monetary value, if it increases in value due to fear that the current global financial system is about to become unraveled, katie bar the door. The US dollar will decline heavily in value, and we may find ourselves being forced to purchase our imports with specie, and not Fiat $$$$$....
What the US is currently engaged in, imo, is an effort to stabilize the politico-economic order, by force, if necessary in order to perpetuate a system where developing nations feel they have choices other than bankruptcy (default).
While the US economy may have indebtedness, foreigners continue to hold that debt out of fear of holding debt or currency in their own countries (capital flight). But foreigners could be induced to exchange their US holdings for gold and silver, if they perceive the US is unable to calm the global political risk equation and reestablish a sense of order that encourages economic growth again.
Hawk |
