Sunday, September 12, 2010

Doomsday Warnings of US Apocalypse Gain Ground

Economists peddling dire warnings that the world's number one economy is on the brink of collapse, amid high rates of unemployment and a spiraling public deficit, are flourishing here. The guru of this doomsday line of thinking may be economist Nouriel Roubini, thrust into the forefront after predicting the chaos wrought by the subprime mortgage crisis and the collapse of the housing bubble.
US has run out of bullets," Roubini told an economic forum in Italy earlier this month. "Any shock at this point can tip you back into recession."
But other economists, who have so far stayed out of the media limelight, are also proselytizing nightmarish visions of the future.
Boston University professor
Laurence Kotlikoff, who warned as far back as the 1980s of the dangers of a public deficit, lent credence to such dark predictions in an International Monetary Fund publication last week.
He unveiled a doomsday scenario -- which many dismiss as pure fantasy -- of an economic clash between superpowers the
United States and China, which holds more than 843 billion dollars of US Treasury bonds.
"A minor trade dispute between the
United States and China could make some people think that other people are going to sell US treasury bonds," he wrote in the IMF's Finance & Development review.
"That belief, coupled with major concern about inflation, could lead to a sell-off of
government bonds that causes the public to withdraw their bank deposits and buy durable goods."
Kotlikoff warned such a move would spark a run on banks and
money market funds as well as insurance companies as policy holders cash in their surrender values.
"In a short period of time, the
Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees. All that new money could produce strong inflation, perhaps hyperinflation," he said.
More Here..

1 comment:

  1. The number one productive ,growing ,real wealth producing manufacturing capitalist economy ,is China.

    Pre Crises the US was only the worlds biggest consumer Ponzi economy,parasiticaly running on credit from the rest of the world ,before the Grat Ponzi and the dollar hegemony imploded .

    Trillions of dollars were flowing into the US economy in recent years for bonds that urned out to be dud bonds only rated AAA because of a criminal collusion of government/SEC ,rating agencies and banksters.americas good name is now trashed.
    America had exported the cost of its economic crises in dud bonds to the rest of the world. So the foreign credit supply and support for The dollar is drying up.

    Now ,the weight of paying off decades of trade deficits and deficit spending on losing wars for empire against the third world ,must be paid for by America and americans themselves .

    But both its financial sector and its government financed military sector are already insolvent .The old Ponzi economy appearence of profitability is only temprarily held together by a printing press.

    The US is now a run down failed capitalist economy ,run by a kleptocracy financial Elite centered on the Fed money counterfeiting mafia cabal , whose only remaining source of profit left ,is looting the future government tax revenues for Treasury and other bondholders whose bonds have been pawned to government and the Fed.
    As well as looting the assets of the middle class via Usury.

    Thereby creating a nation of Debt Peons to capital ,who have now run out of an easy credit supply and so unable to even continue to pay the interest on its past credit card ,housing mortgages,car loans. By Using their now falling in value houses and shares as an ATM.
    Its youth,have a bleak future , facing low waged underemployment or unemployment in the unproductive services sector for which they have been educated .Many will be Debt peons for life, unable to pay off its now lifetime burden of student loans and credit card debts .Tied down by these debts They will be unable to afford even more loans to buy high priced housing and be able to join the middle class and allow the housing price bubble to continue forever.
    It will take decades for a run down unproductive of physical wealth de-industrialised America with a population of Debt Peons to pay of its past debts to capital.
    While China is employing hundreds of millions of productive for capitalist profits factory workers ,while educating a future supply of millions of practical engineers and other high tech workers.
    High waged America has problems even making an 19th century technology light bulb .
    Turn the lights out and pay your debts american debt Peons.


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