American Debt Crisis Black Hole Will Lead to Greater Crisis
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Crisis has not really gone, I am afraid that the world economy in 2011 will also be extremely volatile year. Wall Street analysts, "hundreds of terror will bankrupt the city," the forecast is like a blockbuster in mind over the Christmas season in the United States exploding. To systemic risk in the European sovereign debt gradually unfolding, the United States a number of "hidden risks" are also the "dominant risk" Transformation: The U.S. state and local government debt problems began to gradually emerge. Federal Reserve released data, as of Q1 2010, the U.S. state and local government debt amounted to 2.8 trillion, and its short-term debt is likely to cause significant liquidity risk, the state government is facing a liquidity crisis, the U.S. sovereign debt the risk of new sequence is formed.
Wall Street analysts said "the United States one hundred city facing bankruptcy, New York, California, stuck almost paralyzed the economy" is the United States, a true portrayal of the plight of the current debt. Local debt is only the tip of the iceberg of U.S. debt, from debt repayment capability, the ability of the U.S. debt and net assets of the sharp decline in the amount of debt is rising rapidly, the U.S. debt is a creditor of the "nuclear option," the U.S. financial dam the huge gap and a huge debt is swallowing the United States.
Last 40 years, 35 years with the U.S. government budget deficit, only 5 years of surplus. U.S. debt since the financial crisis has not changed the economic model, but intensified in 2009, about 1.47 trillion U.S. budget deficit, size of the deficit will account for 9.9% of GDP respectively in 2008 and 2007, 2.16 times and 7.84 times for 1945 Since the peak of the U.S. deficit. Financial liabilities of the United States in 2009 totaled 1.2 trillion U.S. dollars, accounting for U.S. GDP in 2009 to 82.5%.
However, this is explicit debt. According to the U.S. government's former Comptroller General, the U.S. President and CEO David 彼特皮特森 Walker Foundation estimates that if the U.S. government of national social security implicit debt of all outstanding loans and all together, then the 2007 The actual total debt of the United States has up to 53 trillion. Global GDP in 2007 was 54.3 trillion, that is just a U.S. national debt, the debt has made the world close to 100%.
The United States is entering an irreversible "debt black hole" in the. Obama recently published under the Budget 2010 fiscal year will rise to 94% of U.S. debt in 2011 will reach 99%, will rise up to 101% by 2012, the annual interest cost of debt will exceed the U.S. defense budget and can be discretionary expenses. With the aging U.S. population and the surge in the cost of health insurance spending is still expanding social programs, fiscal year 2010-2019 estimated budget deficit will total up to 7.1 trillion U.S. dollars, 2035, the U.S. government's debt will account for 180 GDP % "debt on debt," "solve the deficit with the deficit" will eventually come to an end the debt dependency.
The question now is, debt is not only a threat to the United States, but also on the global threat. The United States will not sit still for these debts, "How to pass the U.S. debt risk, how to shift domestic economic crisis" is the United States is most concerned about. The United States is the debt-dependent economy, the government deficit financing, the National ahead of consumption, banking and financial support is the entire contents of such a system. The financial crisis to financial institutions and the family left a lot of debt, balance sheets continued to deteriorate, so the financial system in the private and the deleveraging process to be leveraged by the state so that the nationalization of private debt, national debt, international, Now I am afraid that have accumulated huge debts to pay for the by the world.
When the United States in serious debt problems, we must rely on monetary hegemony, the United States is the quantitative easing of debt monetization. This makes the emerging economies monetary sovereignty compromised. Passive Super-emerging economies, currencies, currency put too much external liquidity while continuing large inflows of direct supply to change the internal mechanism of monetary policy, thus weakening the autonomy of monetary policy, resulting in purchasing power and domestic purchasing power away from, facing "Foreign appreciation, internal devaluation"'s dilemma, control of space smaller and smaller.
Fed QE ineffective on its own economic stimulus, but to stimulate the global asset bubbles and inflation effect is immediate, inflation as a tsunami, roaring, a new round of global inflation pressure has been formed. Slightly higher than the world inflation rate of 3%, which means that global real interest rates negative, about -0.6%, the inflation rate has exceeded the increase in nominal interest rates increase. Soaring global food prices, the S & P Goldman Sachs index of 8 agricultural commodity prices (GSCI) 2010 rose 30% so far this year, as supplies of these staple food industry agricultural prices are a direct result of the price of the downstream industry chain of food are basic necessities of ordinary people Expand feast reduced capital investments. If in the event of hyperinflation in the economy will once again consumption and physical decline, economic stagnation, it may cause so-called "stagflation", slow down the pace of economic recovery in the world, so that the efforts of countries to address the financial crisis destroyed, and even into "two the recession. "
In addition to the torment by inflation, the United States "irresponsible" monetary policy is a predatory creditors of national wealth and "financial squeeze." As a currency issuing countries, which can be through the issuance of foreign currency in order to fulfill payment obligations or dilution of foreign debt burden, so the development of sovereign credit risk may also occur in implicit default mode, that is by default reserve currency devaluation in disguise to pay its external debt obligations. Only from 2002 to 2006, the cumulative amount of U.S. foreign debt disappeared 3.58 trillion.
Dilution of the dollar, the economic loss should not be overlooked. Data show that foreign holdings of dollar-denominated assets of up to 5 trillion dollars, the dollar will suffer a huge loss of assets States. As to the future depreciation of the dollar more physical form presented, while the depreciation of the exchange rate has become the norm form, so the future of national foreign exchange reserves has shrunk considerably over the extent and frequency of the past, to complete a unknowingly "great shift of wealth." |
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By :
Jessie Stone
Submitted
2010-12-31 09:30:48 |
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