I see you just registered for this board. Just keep reading everyday. Worst case scenarios on ET come up constantly, and are often given an irrationally high probability of coming to fruition by many members.
The IMF urged the US recently to add the trillions of Fannie and Freddie debt to the official debt count. Would they still rank as AA if they did?
As I sit in my home office, Bloomberg on my Screen.....the propaganda machine in the works. Even Pimco said that inflation is 2% and that the '' Trillions of Money printed" has not reached the credit market, IE being lended, therefore, they do not expect high inflation right now. But at least PIMCO said they would stay away from Treasuries. Everyone Else is saying S&P is full of shit and that it's not going to lower Ratings. man, I feel for you guys who make your living from trading the US markets. I guess you strictly trade via Technicals because the FINANCIAL NEWS is a fucking joke.
One thing seems as certain as ever, rates will rise, bonds will fall. But when? Seems now, it might be before 2011 is done in spite of high unemployment. Is smart money, apparently that's the money that trades on inside information, either sitting on the players bench or shorting bonds here? Surely when bonds fall, money will come out of equities and flow into bonds, won't it? Is what we see now in anticipation of what is certain to come?
That's worst case scenario, and I agree. I think the FED will opt to monetize as opposed to default. A hyper-inflationary collapse should erode purchasing power by at least 30-40% for the average American. That means real GDP (consumption) contracts by a similar amount. It will be on par with the Great Depression. However, it should be temporary, so long as the FED does not pump-prime with each reiterative downleg, which they very well may do. There will be blood in the streets and the political climate will swing decidedly Authoritarian. Indeed, something wicked. What people don't get is this is planned. Geither, Paulson, Bernacke and Bolton have called for the end of USD reserve status and promoted the SDR and SDR treasury bond to compete with the USD. US Policy makers are literally hacking away at the foundations of the dollar, as we speak. Catastrophe is unavoidable at this point. Congress is loathe to cut the graft that keeps them elected and this joke of an economy is kept alive on borrowed money. Hence the deafening shrills from Washington to raise the debt ceiling. 5 years and we're Greece. If Treasuries sell-off, Bernacke will introduce QE3. They haven't come this far to let the system collapse now, imo. That's 5 Trillion down the toilet. No, they will beach this tanker right on the rocks and let the whole thing ignite. They want to destroy America. They want this fucker to explode. When they bailed out Wallstreet, our fates were sealed. It's not nepotism or ignorance. They knew what they were doing. The numbers were straight and obvious. All the congressional battles, token cuts and mythical growth rates are just political theater for the idiot sheep who couldn't tell which way the wind is blowing. They're kept happily placated so the Managers can rip and loot the bowels of the ship uninterrupted before they crash us.
Yup. That's why the Feds are pushing the Veteran disarmament bills, militarizing the police, and fear-mongering home grown terrorists as those crazy McVeigh types that "refer to the Constitution", blast the Federal Reserve and use gold and silver as currency. We're the enemies. Regular Americans. Now why the fuck would the Government be setting up a control a grid society, if they didn't know a collapse was coming? <iframe title="YouTube video player" width="480" height="390" src="http://www.youtube.com/embed/nY0ClsW1QX4" frameborder="0" allowfullscreen></iframe>
I deleted the comment, feeling it may not be appropriate for an economics forum. However, conditions could deteriorate rapidly, especially resulting from a currency crisis, and do not believe it is fear-mongering in the least.
^Don't worry. Bernice litters the economics forum will all sorts of offtopic HS. I think your observation on the nexus between a dollar and political collapse is spot on and entirely relevant. Hard to separate the two when the economic fabric and livelihood of the nation unravels before our very eyes.