The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country’s ability to pay its debts and potentially plunging it into another recession, according to a study by the US’s own central bank.
In a 2003 paper, Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current 3.5pc.
The impact would be devastating by making it punitively expensive to finance national borrowings and leading to what Tim Congdon, founder of Lombard Street Research, called a “debt explosion”. Mr Laubach’s study has implications for the UK, too, as public debt is soaring. A US crisis would have implications for the rest of the world, in any case.
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7% will be disasterous? Wait until we see 17%+ next year.
ReplyDeleteno kidding , just as in the early 80's when they spiked up to 24% . people lost everything , and people had alot of work and jobs where very secure back then , now every part of every sector of every economy in the world is on the verge of a mass catastrophe , and interst rates are already very low worldwide , wait til the prime goes up to 5 , that means 5% more per household per year of all debt . People get your things in order NOW , ROME is falling , get out of the big cities , find a solid based farmer and work for him(they usually supply room and board for the workers family and sometimes a farm vehicle truck ) and free food , even if it is only for 7-8-9-10$/HR
ReplyDeletewith the room board and food , that is a 15$-20$/HR job . I wish everyone here good luck in the coming months take care of yourselves and your family . I live in Canada , and if there are any Americans who wish to come here and work hard , there is a bit of work here (albeit not well paid and there is no more factories here or they are all closed) work still the same , i may just sign for you and your family (Sponsor you)
yo can add me to your MSN
trex69_80@hotmail.com