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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (89393)	10/28/2008 2:21:10 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

For economic viability and U.S. Dollar exchange rate the public and private debt which matters is America's $14 trillion of External Debt, debt owed to non-US entities. 2/3 of America's $14 trillion of external debt are obligations of consumers and business. A not insignificant percentage of this external debt is currently being liquidated through foreclosure and bankruptcy. The $4.6 trillion of U.S. government external debt, at less than 66% of one year's GDP, is far less than Japan's 196% but more than Mexico's 23%. All other U.S. consumer, business and government "obligations" are owed by some Americans to various other Americans. All of the Social Security debt is owed by the governemnt, to the government, in the form of special bonds. Americans with heavy levels of debt obligations are currently experiencing a great decline in their standard of living as the availability of new credit is restricted and asset prices have declined, limiting their desire to continue spending far more than they earn. As the situation progresses, many of these debtors will default and then Americans who own this debt or are owed these obligations, either directly or indirectly, will experience a reduced standard of living. .