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U.S. Debt approaches insolvency.

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Crunch Hardtack

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Link: http://rense.com/general84/dofk2nd.htm

Excerpt: "In 2007, public debt in the United States was 10.6 trillion dollars, compared to a GDP (gross domestic product) of 13.811 trillion dollars. In just one year, direct and indirect public debt have grown to more than 100% of GDP, reaching 176.9% to 184.2%. These percentages exclude the debt guaranteed by policies underwritten by AIG, also nationalized, and liabilities for health spending (Medicaid and Medicare) and pensions (Social Security)[2]. By way of comparison, the Maastricht accords require member states of the European Union (EU) to reduce their public debt to no more than 60% of GDP. Again by way of comparison, in one of the EU countries with the largest public debt, Italy, public debt in 2007 was equal to 104% of GDP.

In 2007, 61.82% [3] of America's public debt was held by foreign investors, most of them Asian. So the U.S. public debt held by nonresident foreigners is equal to about 109.39% (113.86%) of GDP. According to a study by the International Monetary Fund, countries with more than 60% of their public debt held by nonresident foreigners run a high risk of currency crisis and insolvency, or debt default. On the historical level, there are no recent examples of countries with currencies valued at reserve status that have lapsed into public debt insolvency. There are also few or no precedents of such a vast and rapid expansion of public debt."

Need more beans and more ammo.
 

Randolph Kinney

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The federal reserve is actively buying US Treasury debt, GSE debt, and MBS of privately held institutions.

Just as soon as banks start lending again and fractional reserve banking kicks in, there will be an explosion of money that is being spent besides what the government spending will be.

So it matters not what the GDP and national debt are right now since the FED is buying a good portion of the debt. It matters later when consumer spending returns.
 

Workbox

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It matters later when consumer spending returns.
When is that going to happen? I think many Consumers are getting off their spending hangovers and getting burnt real bad and the bailouts/bonus roll outs are not helping when a consumer is down. I really think that this will be the last best Christmas for awhile for many folks. After the holidays, things are really going to slow down and retaliation from the consumer/home owner.

There is too much fluff from the government and media.
 

Randolph Kinney

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Consumers will spend when their disposable incomes grow. Disposable income grows by eliminating debt or raising the wage or reducing taxes. Consumer debt is eliminated through the bankruptcy process and direct forbearance through charge offs.

Obama has promised a tax cut. We'll see.

Obama has promised a stimulus spending package. Federal wages are typically higher than private sector wages when the benefits are thrown in. We'll see.

Once the bulk of the consumers who don't have jobs get debt relief through bankruptcy and then become recipients of new government spending programs along with their tax cuts, spending by these consumers should take off. :clapping:
 

Crunch Hardtack

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The federal reserve is actively buying US Treasury debt, GSE debt, and MBS of privately held institutions.

Just as soon as banks start lending again and fractional reserve banking kicks in, there will be an explosion of money that is being spent besides what the government spending will be.

So it matters not what the GDP and national debt are right now since the FED is buying a good portion of the debt...with completely worthless paper. It matters later when consumer spending returns.(I think the better question is IF consumer spending returns....and IF it does return, at what level of spending will it return to?)


According to census bureau estimates, there are about 304 million people in the U.S.. Currently 30 million are on food stamps, so 10% of the nation is either unemployed or under employed. Although 25-30 percent of the country was unemployed during the great depression, most of the unemployed were at the bottom rung of the economic ladder. There were some anecdotal examples of investors jumping out of windows, but these were relatively few. Major job loss sectors today include Financial, Real Estate, Construction and high paying assembly line jobs. These are the folks who pay the bulk of the taxes, so a 10% loss of jobs in these sectors could mean as much as a 40% loss of tax revenue. This revenue cannot be made up by the poor or those who are not able to otherwise pay tax. To replace the disproportionate loss of tax revenue, you have to slam those who still have a disproportionate share of the money........and the monied elite will only take that for so long.

We are rapidly approaching the point where government simply will not be able to maintain subsistence services to those in need. (i.e. before this mess clears up, we WILL be seeing some people starving to death in the streets. A truly objective look at the facts cannot lead one to an alternate conclusion.)
 

Randolph Kinney

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We are rapidly approaching the point where government simply will not be able to maintain subsistence services to those in need. (i.e. before this mess clears up, we WILL be seeing some people starving to death in the streets. A truly objective look at the facts cannot lead one to an alternate conclusion.)

Let us look to history for the most probable answer as to what will happen in the future.

My guess is that the US will become something like Germany was after WWI with the Weimar Republic hyperinflation. The solution is to suddenly stop printing currency. But to counter those effects, you need something like state control of everything, something like Hitler's 1937 Germany.
 

Big ole Boy

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Energy and human flesh.

Infrastructure jobs encouraged by government spending like (CCC corps cannot help the econonmy unless we can build that infrastructure around a cheaper source of energy for the massess to enjoy a higher standard of living ....

... a Buck Rogers skyline can only happen with a cheaper source of energy .......

..... I don't see cheaper energy anywhere on the horizon .....


.... the mountain of human flesh in this world will have to contract .......

...... all of the government arithmatic ....... will never give you the anything other than ear candy ......

.... we get to witness what so many have witnessed throughout history ..... I think this time it will be a much larger scale and very quick ........

....
 

PropertyEconomics

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New Mexico
Let us look to history for the most probable answer as to what will happen in the future.

My guess is that the US will become something like Germany was after WWI with the Weimar Republic hyperinflation. The solution is to suddenly stop printing currency. But to counter those effects, you need something like state control of everything, something like Hitler's 1937 Germany.


I fear you not only speak the truth but are also prophetic. The really frightening thing is the question ... "Is this by design?"
 

Mr Rex

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It begs for a war with the folks holding the bag. Japan shares the bag with us. China holds a big bag, and a decided number of their folks asking for their money back could be troublesome based on simple arithmetic. Some of the more militant of those folks could be adamant about it.:unsure:
 

Tim The Enchanter

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If the US$ gets into hyperinflation, the $trillions in debt would be a lot easier to pay off. But those holding the debt won't be happy. And if you've got US$ in the bank and it's purchasing power melts away... Then you'll not be happy. :shrug:

The Govt is pumping in $100's of billions into the economy.
More $ chasing the same amount of goods. Our currency is a huge Ponzi scheme. If Peter Schiff is right we're gonna be F bombed.

http://www.youtube.com/watch?v=nZwJ0xld5eU&feature=related
 
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