Wednesday, February 10, 2010

US, Europe Will All Default On Their Debt

The governments of every developed economy will eventually default on their sovereign debts, including the US, the UK and Western Europe, Marc Faber, editor of the Gloom, Boom & Doom report, told CNBC.
"In the developed world we have huge debt to GDP, in terms of government debt to GDP and unfunded liabilities that will come due," Faber said in a live interview via telephone. "These unfunded liabilities are so huge that eventually these governments will all have to print money before they default."
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32 comments:

  1. Sorry folks, no default will happen. They will just keep bailing everyone out, no need to worry......the US$$ is still king, after all it's bizzaro world where nothing makes sense, up days should be down days and vice versa. The wool has been pulled over our eyes so far we won't know the difference anyway

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  2. 3:45 yes and you will live forever too...God where do these hillbilly's come from

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  3. 3;56 i must be a hillbilly too ( even though I live in E Bronx ) but 3:45 has a legit point.

    In this age of NWO and global banking - we seem all inexoribaly intertwined to the point where I swear the gov'ts will prop each other up as needed - greece failing? No problem; enter germany .

    This type of scenario could play out for a very long time as long as the general sheepulous continue to buy into it & so far; that obviously has not been an issue.

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  4. Everything makes sense if you just stick to a short term memory way of life. Every thirty days we just start over, we fill up on bullshot, then fill up again. It is ridiculous, it's all ridiculous, but that is what it is. I can't see thirty days into the future because I can't even see thirty days into my past.

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  5. I don't agree. Eventually the economy will collapse. What is happening in the USA is what happened in Argentina and all other Latin countries where the super elite (all corrupt for the most part) rule. Everyone else is poor. Sad to say I don't think Canada will allow Americans to make a run for the Canadian border, they are already getting tougher on refugee status.

    Good luck.

    Maybe you can head for the Mexican border; oh, I forgot, Mexico won't let you in even though they say we should let Mexicans in. Strange, isn't it?

    I guess everyone is screwed.

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  6. 4:24 and 3:56 both of you are delirious. You honestly believe this tulip bulb scene will last FOREVER? It can't and it is IMPOSSIBLE! The prop up can only last so long, look at this scenario, these bailouts only happened in the past year and it is in the trillions. How many more trillions will it take before we get a reverse spit on the dollar or a default?

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  7. 4:47 Why the hell would you leave a country that has the best of what mother nature has to offer?

    What - you think if we collapse - Canada or Mexico will miraculously be A ok ? Yeah right

    Have you ever traveled the USA ? The country has it all - every climate you could want and every
    population density from Millions to 0.

    Leave ? to what

    And I'll listen

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  8. 4:52

    That's my point I'm asking - if the basic world populationj buys into it ---------------------

    Give me a REASON why the WORLD GOV'TS cannot keep it propped up

    And PLEASE be specific

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  9. The idea of the US defaulting is completely absurd for the simple reason that if we cannot finance our debt we simply have to print money, why do people keep talking about default when you can print money and give you an unlimited supply of wealth????

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  10. 4:59 because it has to be paid back somehow some way and at some point. Thats like saying I am going to make widgets and I will make enough widgets for every person on this earth. But we only need one each. But I'll keep making them... . eventually nobody wants widgets anymore making them obsolete.

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  11. 5:04 it is difficult for people to even envision what is happening in the USA because we've never gone through anything like this before. Yes, the USA has gone through a depression before, but this time it's different because it's an intentional collapse and most of our jobs are gone or overseas or sent to NAFTA.

    I pity them in a way because they cannot even conceive that the USA could be fleeced just like Argentina, Mexico, or any other third worlds country, but that's what is happening here.

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  12. AH ! But 5:04 you aren't a very good salesboy are you ?

    You have not at your disposal an army of " go get your extra widget propaganda machine".

    Pay it back to whom ?

    Seriously - does the Fed have to re=pay itself ?

    No - I do not think so; they just promote the " all ok " machine as in the widgets above and the world populace marches on ( some of them even continue to stockpile these worthless world denominational notes under their mattress; convinced they are a valuable store of wealth)

    hell man - it could go on ---- to infinity or beyond !

    Payback ? Are you serious brother ! their ain't enough tree's !

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  13. @5:04 the problem is everybody need the widgets and can't get enough of it. How many people do you know who would say they have too much money....money is never enough and that is why we are not seeing any sign of inflation yet...

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  14. Printing more at the pace they are on continue will avoid a default at the cost of hyperinflation which have the same disasterous effect.

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  15. I feel sorry for you guys in denial. You're scared of what is to come and rightfully so, but denial will not get you anywhere.

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  16. Oh I forgot the US will never collapse, grow forever, the dollar will last forever, everyone will love America forever. Stupid trolls. I bet you anything the Roman people talked the same way before the empire collapsed. You just can't grasp reality can you?

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  17. 5:43 has a BAD case of dementia, it's not Rome you friggin moron, so don't play that card, ROME did not have printing press at thier beck and call, and the world was a VERY different place back then.

    We will in fact NOT have another Great Depression, at least not the likes of the first one, for one simple reason....we have way too much shit in the USA to keep this from happening and the fact is the US$$ has, and always will, be the reserve currency of the world, it's BY DESIGN....you sir are the TROLL in denial

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  18. 5:50 you're not that lost in space are you? You are the guy that decides if we are not going into a DEPRESSION because you "feel" we wont? Because Rome didn't have a printing press? Its like listening to a 5 yr old speaking at a G20 meeting. "We have too much shit to keep this from happening". Oh yeah like we're so SPECIAL! Dumbest TROLL on this thread! BY FAR>

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  19. Nobel laureate Joseph E. Stiglitz said the prospect of a default by the U.S. or the U.K. is an "absurd" notion constructed in financial markets.

    Both nations "deserve to keep the Aaa rating" and "the likelihood of a default is so small, particularly in the U.S. because all we do is print money to pay it back," he said in response to questions after a speech in London yesterday. "The notion of a default is so absurd, it's another reflection of the absurdities in the financial markets."

    An excellent point by Stiglitz pointing out the absurdity of Moody's, S&P and Fitch placing credit ratings on countries and a CDS market gauging the probability of default for countries that print their own currency. No country that has its own currency will default, they will just inflate to pay it back. The risk is not one of default, but devaluation of the currency the debt is denominated in. The ratings should be ones that deal with the potential for currency debasement, not credit risk. Obviously, if the country uses a collective currency such as the euro or another country's paper, it makes sense to have these rating mechanisms.

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  20. Folks,

    It's like this.

    The federal debt is not intended to be paid off. It's a means for very powerful international bankers to tax Main Street Americans, and control Capitol Hill through-and-through.

    Now the problem is, said bankers no longer need Main Street, at least not all 299 million of them. They also want to consolidate their global holdings into one massive independent central bank with its own reserves currency (SDRs). To make matters worse, world oil production is declining (or at least that's what has been manufactured if Peak Oil is not true).

    If said bankers wanted to keep America powerful, they would have ordered their paid lackeys in Washington to issue 2 or 3 trillion dollars to rebuild America's infrastructure, including coast-to-coast, electric-powered railways. Also, we would see a program whereby each household would receive a grant to place solar panel and windmills, as the case may be, to wean the nation off oil imports. The Big Three would have a gun pointed to their heads to produce nothing but plug-in hybrid vehicles with battery double-packs. Steep tariffs would be put back in place to protect wages, etc. You get the picture.

    However, we don't see the foregoing, do we? Why do think???

    Answer: said bankers are pulling the barn (Main Street America) down, for it is easier to rule, say 100 million people as opposed to 308 million. (Attrition will come through starvation, plagues and wars.)

    Of course, if America was 100% Jewish, said bankers (Jews themselves) would have moved Heaven and Earth to protect the nation.

    And, yep, it's like that.

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  21. 6:53, what an idiot. G20 lackies have the mentality of a 5 yr old.

    You win the ignorant troll award

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  22. 6:53 Is Stuck on Stupid

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  23. This story has played out numerous times in history prior to our arrival. A look back in history will reveal to everyone, exactly what will occur. Excessive debt has destroyed many nations and forever changed the social structure theur societies. The day will soon arrive, that it will make no difference how much currency is printed. Read your history books my friends. I wish all of you well.

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  24. Look people - let me try to explain it this way.

    The fed has UNLIMITED money creation powers & very LITTLE of it is actually printed; instead
    the vast majority is merely an accounting transaction done by computer.

    When China buys our treasury securities; what- you think we send them cargo ships full of dollars? Not hardly - it's merely credited to their account in the "plus column"

    Musch the same goes on w/ the banking community although that gets a litlle tougher to explain in short here.

    Bottom line up front - it is different this time & yes they can " print" to like the person said above " to infinity and beyond" because it's not really debt rather just an accounting practice.

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  25. As I stated before, this scenario has already played out in societies previous to this incident. History does not lie. The laws of currency inflation will always apply. A nations choice of currency may be livestock, metal coins, paper notes, or in this case electronic entries. Wait and watch. Your friends and family will son become your most precious asset. If you have none, luck be with you. History is never denied indefinitely.

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  26. You know what I find most humorous?
    While people like 3:45pm are going around tellling everyone not to worry, everything will be Okie-Dokie, Goldman Sachs is placing bets that get paid only if the US Defaults.

    :)

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  27. I agree wholeheartedly with your comment about family as we often forget exactly what is most important.

    Sometimes however new history is made for the future. never before has a country/civilization/governments been able to create "currency" out of thin air - it has always been backed by something or was in of itself value.

    As I have stated many times in this blog however - this "money" is not really anything more than an accounting transaction.

    If China is willing to buy let's say 100 trillion of our treasuries and we're let's say willing to buy 100 trillion of their "stuff" ( it doesn't matter really what "it" is) then the 2 gov'ts are merely cost accounting and the numbers are not important - they are merely numbers on a computer screen.

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  28. 6:42 you are right but they wont give everybody those free electronic digits like they do to the banks

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  29. 6:42 Yes, but what happens when the 100 trillion of their stuff stops as in our case - and China is holding 100 trillion of paper. Once it gets out of balance between the two parties, one gets screwed and wants settlement from the other. Also, US consumers are no longer buying, so China doesn't buy our debt - we need that money to operate, inflation starts, dollar devalues, China's 100 trillion goes down the toilet in value, they are pissed and who knows what happens next.Won't last forever.

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  30. 9:50 I sure wish I knew how long this dog and pony show will last; but I do not. That has been the main emphasis of my response for these types of blogs for over a year / how long can they prop it up?

    I disagree with your conclusions on the American consumer - they are TOTALLY addicted to materialism and the debt it incurs does not bother them in the least - kinda like a crack head stealin' from grandma.

    Now over 70% of our GDP is consumption based and
    China must buy our debt or we won't buy their lead based toys.

    Owners of businesses understand this scenario completely -
    unfortunatly a mere 8% of our current administrations cabinet has ANY business experience at ALL.

    A very short story here and I will let you go.
    1984 found me a very successful businees owner - we made specialty hydraulic cylinders for heavy equipment ( and we were good at it ) one of the first ( of a million ) hard lessons I learned was
    that if I wanted 500,000 Dicon Carbide O rings ( very desirable and very costly and very hard to make) to put into my cylinders; I had to " also purchase 250,000 of " these" .

    You had 2 choices - it was really that simple.

    I hope that makes some sense - I'm done ramblin; on now

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  31. 5:51 Understand your point on consumers not caring about debt etc. My point was that the majority of consumers are tapped out now with no more credit and can no longer but the "stuff". Our gov now needs to borrow from China but China has nothing to gain in return, ie our consumer purchasing power is shot due to lost jobs and stark fear.

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