The US is bankrupt and the only way our government knows how to solve any problem is to spend more of our money, even when they do not have it. The magnitude of our national debt ($12 trillion), addition social program obligations (social security, medicare, unemployment insurance, bailouts, etc.) and greater than a ten fold increase in the US money supply is so incredible, it is absurd. There is no way the US will be able to repay this debt. As other creditor nations stop buying our treasuries, we will have to raise interest rates to attract buyers. This, along with the burgeoning national debt and lack of treasury buyers will ultimately lead to the dreaded bond and stock market crash that our leaders have been desperately trying to delay or avoid. However, some other countries like Iceland, Dubai, Greece, UK, Argentina, etc. are apparently in worse shape than the US. Therefore, our attempts at avoiding default by printing money out of thin air seems to be working, at least for now. Every time another country comes close to or actually defaults, it makes the US dollar and US Treasuries appear attractive again to investors. Now there is even talk of China being in a financial bubble and ready to crash. So the "game over" that may be coming is a default of the US government on its treasury obligations. But the timing of the default is uncertain. Many thought it would happen in 2009, but there are too many variables to accurately predict when or if it will actually occur. But rest assured that there has been plenty of time for the Fed and our Treasury to talk with other countries to plan what to do if and when default occurs. It will lead to a new world currency. The questions in my mind are, what will happen to our national debt in this scenario, how much will our dollars will be worth in the new currency and how will gold and silver, not to mention other commodities be valued?
The US is the world largest Manufacturer. Like most America haters and Obama lovers you don't have the facts.
Anyone who believes the economy is back from this credit crisis is a complete fool. Spending trillions of dollars is not the answer to recovery.
Food for thought. The power of Believe. If paper money X is created and some people buy materials using this paper money and with these materials build a house.....as workers are paid with this same paper money and they feed their families for a few weeks.. What happens weeks later if it is determined that X is worth nothing. We still have a house and a few well fed families, don't we. Paper money works as long as people believe in it. "Believe" is the currency, not the money. The more a society believes in a currency the more value this currency has. Our forefathers were brilliant when they decided to stamp 'God' in our paper money. How could people not 'believe'? I am almost sure that is one reason why this country has been so successful economically. As long as people in this country believe in God, the rest of the world will believe in this country, is my assessment. Two years ago Chavez in Venezuela, renamed their currency the 'strong Bolivar' and on Friday it was announced a devaluation of 50%. Why? Many reasons obviously, but the most important is the people do not 'believe'. The same goes for most poor nations. I will bet that if any of them decided to put God in the face of their currency, by default that society would become wealthier. I would bet that is the reason why Muslims's religion aversion to money is what keep some of their countries poor and high constant unemployment of over 25%. If Allah was placed in their currency, I will bet you a billion dollars the high level of poverty and despair in these countries would disappear. If God was placed on currencies in Africa and poor South American countries...things would look much different than today.... It's all about what we believe. Believe is the most precious of all assets, when used wisely.... just saying.....
Finally, an astute and honest observation about Muslim countries. Also, the fact that they take time to pray and meditate five times a day lends itself to a relaxed and less productive work day than in non-Muslim countries. Plus since Muslim women are oppressed they are abandoning a large portion of their potential work force.
And yet another interesting ET thread degenerates into a discussion of politics, religion and UFOs....
I apologize if my post seems to take want to influence the conversation in that direction. That is not the intent. Only giving a probable time line of how long the paper Dollar can hold on to the 'believe' bestowed on it... It could be a long time.
No problem... I'm always looking for an opportunity to use funny smilies. I do hope to get some more opinions on our economic future, though. ET posters often come up with some fascinating insights. If more countries continue to have worse financial problems than the US, you may be correct in that the dollar may hang on for a while. And, who knows, maybe there are aliens out there or a miraculous technological discovery that will save us.