Last week it was announced the deficit for the next several fiscal years grew to 9 trillion dollars. We are contemplating trillions more in environmental and healthcare legislation. We have unfunded liabilities between social security and medicare of a hundred trillion.
The problem is we will have to borrow much of that unfunded liability from people who may be having doubts about lending it to us. See China, India, Brazil. You and I know we can only borrow so much money before would be creditors slam the credit window on our fingers. When that happens we go bankrupt but the country goes on. Historically it has been different for the USA, but that window may be closing.
What if no one will lend to us? Or they will only lend at high rates reserved for dubious borrowers? We no longer owe it to ourselves. We owe it to the rest of the world. The dollar long a reserve currency is in danger of losing that position due to our profligacy. What happens then? We become the worlds most prominent banana republic. No credit for you!
If this is obvious to mere citizens, what is going on with the best and the brightest in NY and DC? Are they paying attention?
On the off chance that they really don’t know what they are doing, it is time to sell dollars.
