The United States may be on course to lose its ‘AAA’ rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.
“The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system” and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.
“In the United States there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off,” Hennecke told CNBC.
This is why I was none too enthused with either major Presidential candidate. This exact issue is a ticking time bomb that neither one wanted to talk about. It was the huge elephant in the room that none of the debates remotely touched on.
How about a nice gold and silver based currency? It used to work.
Gee, even during the Great Depression, there never seemed to be a question that the U.S. Government would become bankrupt.
We had a chance to listen to Ron Paul, but we did the same ‘ol same thing again.
[i] How about a nice gold and silver based currency? [/i]
Currency accounts for a minuscule proportion of the federal government’s liabilities.
The real problem involves (1) the explosion of government borrowing to finance the record deficits incurred since 2001, and (2) concern that the current bailout-frenzy will prove even costlier than expected.
“Currency accounts for a minuscule proportion of the federal government’s liabilities.”
Then it should not matter a bit if we go back to a gold and silver standard for our currency…as our nation’s founders decidedly wanted us to have.
Sick & Tired [#4]: The featured article discusses the increased risk that the federal government, increasingly laden with debt, would default on its liabilities. You proposed the gold standard as a means of preventing default [#2]. I responded that the gold standard would not serve that purpose [#3]. That hardly shows that “it should not matter a bit” if we returned to a gold standard.
I like the idea of money immune to governmental manipulation and debasement. But most economists believe that the gold standard would cause more problems that it would solve. Alan Greenspan, once a goldbug, ultimately reached the same conclusion.