In my particular case, I chose the net return on national investments. In 1998, this flipped - the US was paying more out to foreigners who owned US assets than it gained from owning overseas assets. It had moved from a bank balance in the black to an overdraft.
I thought this would grow slowly over the next couple of decades before people would start to notice. I didn't expect the Bush administration to come along and fuck things up quite as thoroughly as it did. Hell of a job, Georgie.
And now this news:
Check out the chart showing the recent spikes in the US 10-year credit default swap. In other words, the market is now pricing-in the genuine possibility that the US will struggle to pay-back some of its long-term T-bills.
That possibility is still deemed to be quite low. But the ultimate financial question – until recently, unthinkable – is now being asked. Yes siree, the mighty US government could default. That’s how much the world has changed.
Welcome to the world run on the Euro.
2 comments:
As a citizen of the US all I can say is, its about damn time. We've been needing to come down a few notches for a very long time; the last few years have been especially disheartening, as we've watched the gap between the rich, and what used to be the middle class, grow enormously. So, now we'll come down more than a few notches, and perhaps now we'll be able to build a new economy, one that isn't based on war, oil and colonialism.
Hope you all are ready to step in and do your part...cause you don't want to leave all the heavy lifting to China - that will cost yous.
Few empires decline gracefully, none gladly...h
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