Two days ago the US went to loan money for it’s debts. This is a normal ever increasing event. This time our buyers….hesitated, some buyers even got out of our treasuries. They did buy our debt but this is NOT good. If they had chosen not to buy our debt we would be facing a reduced credit rating and much higher interest rates on the loans we could get. Worst case think Greece or beyond. Best case….well there isn’t one if we get our credit rating lowered the interest alone will overwhelm the Gross National Product (our income).
Projected 14 Trillion debt though I bristle at the idea raising the debt ceiling is the answer. Can you call up your credit card holders and say “they family voted and we raised our credit limit by multiple BILLIONS of dollars.” The poor operator that took your call would need to go home because of a laughing injury.
When your income does not match your outgoing bills. You go bankrupt. I am not talking it’s time to cut back on Starbucks. I am talking it’s time to have your home foreclosed on and no money to buy food because everything has gone to direct withdraw bills.
The following is from Zero Hedge:
Since June 2010, the US dollar has significantly depreciated compared with the currencies in emerging market countries and some developed countries
Currency system is the carrier of credit system, and therefore, the value of the currency determines the quality of credit system.
What does this mean to you and me sitting at home. Lets start simple. Your hard earned cash is worth less. You will see this in the form of ….. inflation. Yes, I know that Bernacke is convinced there is no inflation and the people are being silly, but I ask you when is the last time he had to go to the store? Also if he is so sure there is no inflation why is the Fed working the numbers so hard to show us on paper there is no inflation. One last thought here national inflation numbers do not count energy costs or housing and is based off the cheapest basics of food.
What else this means is we are most likely heading for Qe3. Another surge of made up money from the Fed into the market to prop it up. Like throwing gasoline on a fire there is a surge but there is no wood for the fire to keep going strong and long. Economists are saying see how good this stimulus money is working. I would ask them to go to Texas and ask the teachers that were hired with the stimulus money and now are all getting fired because the money has run out. All these money dumps are doing is pushing a problem farther and farther down the road. Scary part is instead of getting over some of the problems as we going eventually we are going to have to plow through it ALL when the government cannot keep pushing things off. OR if we are lucky this Congress will have some brains and start that hard but needed process right NOW to get through this while we still can.
Here is a video that is eerie. This is possible and frankly the more this economy plays out and the poor leadership digs a deeper hole for us all it becomes even more possible.
That was fiction here is another interesting clip I found. Real life… before this recent hesitance. (minute 2:55 is where it get interesting)
What do you think? Can our Congress put on the brakes and pull us out of this? What are you doing personally to protect your family from these economic possibilities?