Yesterday (Friday August 5th 2011) a signal was sent by S&P rating agency, confirmation that the USA is technically bankrupt... no surprise there... anyone with a fundamental grasp of grade 5 math would not be challenged with the calculation.
Annual Income $2.3 Trillion - Annual outgo $4.3 Trillion the result is preceded with a minus sign - the shortfall between making ends meet and fiscal failure. This annual shortfall has now acrued $15 Trillion of deficiency with no means to pull it back into a manageable situation - GNP is shrinking along with the tax base. The conclusion of such a leger is insolvency if not sooner... then later.
Compounding the magnitude of that unresolvable sum, there is the reality of the upcoming $110 Trillion commitment known as unfunded liability. This in fact dwarfs the almost trivial annual deficit number...
Cunningly, unfunded liabilities do not move onto government ledgers until the payment checks are issued keeping them off the radar at least temporarily. Still... reality has two undeniable aspects, it cannot be avoided and often bites.
The USA is far from unique... the same unsolvable riddle blights Europe, UK and indeed almost all industrialized nations. Globally the malaise of fiscal challenge is far beyond any conventional solution. Applying conventional solution actually compounds the issues.
Next Monday Aug 8th 2011 - Markets will more fully collapse.
Trillions more of hypothetical wealth will be added to last weeks $2.2 Tillion which evaporated from world stock markets in the current run up of "realization fear" which caused continuation of the 2008 market "correction".
There is insufficient investor greed left to counter the investor fear, appetite for risk is waning fast.
This time there will be no TARP, EQ sequals or cosy inter- government cooperation... those bullets are all used up already.
The global economy is now stripped of crutches and must stand alone on its own feet - a feat not possible.
As social support budgets and services are slashed and taxation is increased significantly (the only options for slowing the flow) - socio-economic tolerance of citizens diminishes rapidly...
Immediate hunger and shelter needs short cut personal preference in the arena of patience and compliance to regulation.
In short expect some tangible unrest across the board.
If controlled universal debt forgiveness is not applied by global elitist power-mongering governance... then natural sovereign debt defaults will complete that process naturally.
We are in uncharted waters - outcomes are predictable by reviewing circumstance and one should anticipate a self-help strategy based on observation -
Stay tuned...
Annual Income $2.3 Trillion - Annual outgo $4.3 Trillion the result is preceded with a minus sign - the shortfall between making ends meet and fiscal failure. This annual shortfall has now acrued $15 Trillion of deficiency with no means to pull it back into a manageable situation - GNP is shrinking along with the tax base. The conclusion of such a leger is insolvency if not sooner... then later.
Compounding the magnitude of that unresolvable sum, there is the reality of the upcoming $110 Trillion commitment known as unfunded liability. This in fact dwarfs the almost trivial annual deficit number...
Cunningly, unfunded liabilities do not move onto government ledgers until the payment checks are issued keeping them off the radar at least temporarily. Still... reality has two undeniable aspects, it cannot be avoided and often bites.
The USA is far from unique... the same unsolvable riddle blights Europe, UK and indeed almost all industrialized nations. Globally the malaise of fiscal challenge is far beyond any conventional solution. Applying conventional solution actually compounds the issues.
STOCK markets around the world plunged again yesterday as fears grew that the global economy would slip back into recession.
The FTSE 100 Index ended a week-long slide in which it saw 9.8 per cent - or £147.9 billion - wiped off its value.
That was the worst performance since October 2008 when investment bank Lehman Brothers collapsed and triggered turmoil in global financial markets, marking the start of the credit crunch.
Markets across the world plummeted amid fears the United States is heading back into recession and Europe's debt crisis is worsening.
Analysts believe the plunge in share prices may worsen unless Governments take firm action to convince the markets they can pay off their loans.Not to be forgotten is the epidemic of shrinking sovereign GNP the national assets used to secure loans, used to pay interest on previous loans... a process of mortgage submersion on a grand scale. GNP shrinks as unemployment rises.
Next Monday Aug 8th 2011 - Markets will more fully collapse.
Trillions more of hypothetical wealth will be added to last weeks $2.2 Tillion which evaporated from world stock markets in the current run up of "realization fear" which caused continuation of the 2008 market "correction".
There is insufficient investor greed left to counter the investor fear, appetite for risk is waning fast.
This time there will be no TARP, EQ sequals or cosy inter- government cooperation... those bullets are all used up already.
The global economy is now stripped of crutches and must stand alone on its own feet - a feat not possible.
As social support budgets and services are slashed and taxation is increased significantly (the only options for slowing the flow) - socio-economic tolerance of citizens diminishes rapidly...
Immediate hunger and shelter needs short cut personal preference in the arena of patience and compliance to regulation.
In short expect some tangible unrest across the board.
If controlled universal debt forgiveness is not applied by global elitist power-mongering governance... then natural sovereign debt defaults will complete that process naturally.
We are in uncharted waters - outcomes are predictable by reviewing circumstance and one should anticipate a self-help strategy based on observation -
YOU are the only reliable thing left - for you and your well-being and well-fare!
Stay tuned...
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