America’s collapsing economy – a massively debt-based economy which can lead to bankruptcy

On 25/3/2009, In Finance, By Yash
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On PBS today, is a new installment of FrontLine, “Ten trillion and Counting” about the surging amount of debt incurred by the USA. This amounts of to 70% of the GDP.

“Who does the Government borrow its money from?”

Part of the debt is owed by the Government which borrows the Fiat currency USD from the Federal Reserve. In turn, the Government must repay the Federal Reserve with interest. The interest, of course is repayable in Federal Reserve issued Fiat money. Therefore, it is inevitable that the currency be devalued as more and more is rushed in to the economy. Devaluation of Fiat Currency is equivalent to inflation.

The number of billions raised for countering the current crises put America in deeper holes than ever. The Interest on all this debt also runs high.

Another interesting documentary to watch first on the same subject is I.O.U.S.A. In this documentary, the trade deficit as mentioned by Warren Buffett in “Thriftville vs Squanderville” is added to the debt, bringing it to staggering figures, signaling a possibility of a Bankrupt America – if that’s not already the case, with the mass media offering a veil of double-speak and politically correct terminology.

In I.O.U.S.A., watch how people have no idea from who the Government borrows money. The Fed is Federal in name only. It is a semi-private body which through the mechanism of Fiat currency and interest, brings the total destruction of the value of the currency and also ultimately, the transfer of ownership of a nation.

Watch, and learn, as it could happen to you, anywhere. The only thing Americans could have done to try and solve the issue was to vote for Ron Paul. Instead – you now the story – an unknown a few years ago, all hyped-up by the mass media, financed by the same people who participated in the crisis in the first place, is brought to a leading position. Once in office, the same issues go on, undeterred. More billions borrowed, tightening the noose of debt on Americans and the next generations.

Here is I.O.U.S.A:

And here is the PBS Frontline documentary, published today:

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  • @Shah: I meant (subtly) that China was buying US assets :^)
  • LoL - China my country???> I am still better off in the US with the recession. In fact, my practice is growing. We have now reached almost 23 employees... the only thing is that I am stressed and overworked... I don't know about you but I think something very dramatical will happen....either good or bad!!!
  • Merci Anne, qu'en penses-tu ? Les fondamentaux sur la monnaie pourraient rester pareil s'il n'y a pas d'indexation sur un métal précieux et le mécanisme de dette et d'intérêts peut aussi demeurer un facteur inflationnel. Est-ce que ce serait temporaire ? Cependant, les actions sont traditionnellement un indicateur qui devancent l'essor économique.Le marché des produits dérivés est énorme alors j'ai l'impression que ça pourrait influer beaucoup sur les risques systémiques.
  • True, true, Vik.@Shah: isn't China your country now?
  • @Shah, Vik: if you look at FT's G20 interactive graphic here, all the economies are recessive, including Canada's. The only one forecasted to still be positive are:1. Argentina 2. Brazil3. India4. Indonesiahttp://www.ft.com/cms/s/0/e39aacb6-0e49-11de-b099-0000779fd2ac.htmlVik, about 75% or more of Canadian exports are to the USA, so if the US cannot consume or import, Canada suffers too.
  • One question for all of you. Which country in the world is it better to be right now? Of course if you have some savings!Remember you guys are discussing about my country here the US (LOL). Should I go back to Mauritius?????
  • Thanks for the info, Vik.
  • @Vik: From the Financial Times:"Governments that issue debt in their own currencies and control their monetary printing presses do not tend to go bust. Rather, the sovereign default takes place covertly through a depreciation of the currency." http://www.ft.com/cms/s/0/8499eb84-1c34-11de-97...
  • @Hans : I would add Knowledge with Ethics.
  • @Hansley: isn't it because we elect the wrong people for the wrong reasons at the helm of these institutions?Shouldn't we promote people with the intellect and understanding. In other words, in a Knowledge Economy or Era, the leaders should have the Knowledge of their domains. Sounds self-evident, but the fact that I have to write it means the world is upside-down.I have never seen so many topsy-turvy things than in the West, like for instance, calling a 'Spade' a ' Diamond' and expecting you to read between the lines. I am tempted to go so far as to affirm that Political Correctness of expression brought down the Occidental Civilization.It has collapsed totally and we are witnessing it daily. It feels like I am seeing Rome burning.
  • Very frightening indeed and simultaneously very liberating. It's the falling of the veil of Maya. But I wouldn't go so far as equating what I say to the full extent of those sources' ramblings (ah well, that's precisely what you wrote in parentheses). Isn't it the work of the Devil to mask what is true by spreading lies? The lie here is that "all Conspiracy theories must be wrong" :P
  • Vik, I agree, the global currency should ideally be indexed on gold if those in power have the right motivation and know what to do instead of another Fiat currency imposed as a de facto standard.That assumption does not necessarily stand though. Therefore, I predict the following will happen:1. A global currency not indexed on precious metals will be pushed2. A global oversight entity, either new or an existing one with increased powers will appear, with Governments suckling at it3. The new Fiat currency will finalize the total destruction of Sovereign nations and peace through the same Interest, Debt and Devaluation mechanism until countries will be run by a handful of elites in the Global oversight entity4. A cardless, cashless agenda will be pushed, probably with implanted RFID chips for payments, enslaving the world population as buying power with this system will equate to the total loss of personal freedom.When the last point happens, just say no.
  • seems the chinese are looking for a global currency for pegging purposes. Might this work, right now, i dont think so. Things have not gone bad enough, but is this a good things, i am not sure. The level of corruption that we have seen in the UN makes me wonder if big monolithic organization are not bond to fail with internal crass..but is another post and story..
  • I wouldn't be surprised that either a Global oversight entity or a Global currency be proposed at the G20 next week. We'll see.
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