as for debt, yeh 12tril is alot of money..its not even 100% of GDP like most countrys, america could probably run 150% debt ratio before it got into trouble.
150% of GDP? at what interest rate would you like that sir, do you think you would be paying 0.5% by the time it reached that level? In fact how long can we sustain this level of rates at all.
Dear, dear.. just factoring in the worst kept secret of impending collapse I actually can only wonder what levels interest would be at?
America is the worlds super power, its not just gona sit back and hand over the rains to a second rate power.
I am not sure any one nation is yet fully ready to snatch reins but influence and 'superiority' complexes, don't last for ever ask the English, the Americans had their century at the turn of the millenium, before the British the chinese had the 3000 years before that.
As long as the US war machine still draws breath the dollar will rule the world, if you doubt that..then maybe you should think outside the box a bit, away from just "finance".
Russia had 2nd best Military clout at one point, may still do, it does not substitute for economics just threat value!
If america was serisouly in danger of loosing its grip on the world it would put that war machine to work..and go threw anyone like a blow touch threw butter!
That is something I fear especially over resources, as for the 'like butter', are you referring to afghanistan, Vietnam or Iraq as examples? We have not had major conventional warfare against massive nations since WWII? Certainly hope you don't see nukes as Knife through Butter they are pretty polarised nation enough after Bush!
Im not saying war is going to happen or is the answer to anything, but this is why america will not fall plain and simple. Look at the state of the world before WW2...the great despresion..yet allies still rose up and crushed nazi Germany..regardless of fiscal cost.
Virtually every active economic nation in the world was involved in WWII, so the assessment has to be relative to others.
Britain carried the Loan for that one and it blighted its ability for the 40's, 50' and through the 60@s and 70's and only inflation made the last payment recently a non-event in which case I assume you accept my position on gross indebtnedness of a nation leading to thrift and hardship for decades and only Inflation being the only mitigator then?
Germany and Japan where assisted back on their feet for infrastructure rebuild, who was the 'sick man of Europe for so long again? Answer: The indebted Nation?
But it will be different this time!
Is the US not picking up the lions share of the Bill for Iraq, Afghanistan etc..
No matter what happens in the US, it will happen everywhere and it will be worse! Europe is in much worse economic shape they just better at hiding it! Look at the debt ratios for god sake and people are saying america is gona default? yeh better join the que..
In my view the Euro experiment has structural issues with Southern Meditteranean and eastern Europe, and I consider the Euro overvalued, so does the big Mac index incidentally
. Having said that, which one always needs to borrow more every month, ie expanding net borrowing and which one net produces, ie who is cashflow positive relatively and who is not?
Also seeing you love your gold baptist..who has the worlds largest gold resrves by FAR..need a clue?
I don't Love Gold, I like reality and truth and respond accordingly, when Gold will outperform I want it when not, I want to be underweight, simple really. Fort Knox holds a lot of Gold, of far more relevance is gold value per number of notes issued, having 3x the next nations Gold Haul is a poor position to be in if your currency and notes are proliferated around the world and IOU's in the form of T-Bills to the tune of 20X times your nearest indebted nation.
On this point apparently there are a growing number of Rumours that Comex, the actually custodian of deliverable Gold, in conjuction with Bankers (The pro paper anti Gold crowd).
In a bid to get yield out of the carry cost and no income characteristics of the metal, Have lent out and net sold short, a massive multiple of that held and that were a small percentage seek to claim actual delivery, another highly leveraged,with poor risk managed Ponzi scheme would be unravelled as Comex would have to become huge net purchasers too cover and are not equipped to do so at current levels.
On this point recently China has built there own vault in HK and instead of having vault agreements with the Swiss and in London. They have now demanded delivery on all purchasers on the basis they wish to retain there own bullion, talk about a statement of intent.
Further to this since announcing they wish to establish a serious position in bullion they have ramped there holding from 600 Tons to 1000 in a few months, you see a net saving nation with a surplus can build reserves really quickly and sensing what's coming, wants it right under its own nose! More similar purchases at this rate are expected.
China also announced an official edict to its population to Buy Gold and Silver, in there country team ethos comes well before the individual and these 'requests' are acted on.
The state would not hesitate to leverage private holdings for state benefit should push come to shove. Americans individualistic approach of everyman for himself will not match 1.1 Billion peasants no matter how slowly, nibbling at little bits of bullion continually.
China plays the long game, the saying goes you will never do business with me but establish ties and maybe your Grandson may do business with my Grandson applies.
So lets say the dollar falls apart, fiat currencey as a whole colapses, we return to a gold standard. Where is asia gona be then? They have no gold..
