This page has been archived and commenting is disabled.
"Bernanke Warned Congress On Wednesday That The United States Could Soon Face A Debt Crisis Like The One In Greece"
Bernanke is now joining Rosenberg, Ferguson and Faber, Edwards, Grice and many others in warning that the debt crisis rearing its head in Greece may spread to America, causing U.S. interest rates to climb.
As the Washington Times wrote yesterday:
With
uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke
warned Congress on Wednesday that the United States could soon face a
debt crisis like the one in Greece, and declared that the central bank
will not help legislators by printing money to pay for the ballooning
federal debt.
Recent events in Europe, where Greece and other
nations with large, unsustainable deficits like the United States are
having increasing trouble selling their debt to investors, show that
the U.S. is vulnerable to a sudden reversal of fortunes that would
force taxpayers to pay higher interest rates on the debt, Mr. Bernanke
said.
"It's not something that is 10 years away. It affects the
markets currently," he told the House Financial Services Committee. "It
is possible that bond markets will become worried about the
sustainability [of yearly deficits over $1 trillion], and we may find
ourselves facing higher interest rates even today."
Yes, massive debt overhangs do matter.
Contrary view: A very smart financial expert disagrees, telling me:
Higher interest rates do not equal a debt crisis.
Greece's
situation is not comparable to the US. Greece's situation is comparable
to that of California. It makes a big difference whether you control
your currency or not.
- advertisements -
Apart from the banker bailouts having an extortion element to them, it was a clear sign of troubling times ahead. For all we know, that money has either left the country or already converted. Reminds me of the gold deposits under the WTC mysteriously disappearing weeks before 911.
http://911review.com/motive/gold.html
Expect real estate values to tumble another notch. No great activity in the market at the low %, and Americans have gone from consumption to savings. Once the bank accounts become substantial, inflation will pare the real values down. Anyone trading DRV or SRS etfs with an eye six months forward?
"Anyone trading DRV or SRS etfs with an eye six months forward?"
Yep!
SRS for me:
2008: Made a lot of dough
2009 - 2010: Lost a lot of dough
Seems like SRS should have been a no-brainer, but those daily re-sets I believe is what kills the leveraged ETFs.
Still the question remains....
What are the other options for the buyers...?
It is becoming quite clear that the US is entering
a Japan style interest rate trap....
.........................................
And to be sure....the current set of politicos have a lame duck Pres....who is not interested in cutting the size of government....and there has been no mention of totally restructuring taxes to a simple consumption tax....which will be required to re-establish the US manufacturing base....
Obama is bullshit.
i agree, but i have to go back to ike before i have to think for longer than a second, well was he bullshit too? and the sad thing is, as impotent as he was generally, carter did appoint paul volcker, and looks less bad in comparison to most of the rest. history is funny that way.