RE: RE: CNN talking debtThe debt ceiling has been raised 75 times in the past 50 years. Do you think this time is any different? Raising the debt ceiling is a foregone conclusion. It is all a question of who is going to blink first, the Dummycrats or the Republinuts.
What you need to look out for is a correction in China because 99% of the stocks listed on their exchange has fraudulent earnings. Their earnings are due to their investment in other Chinese stocks. China is experiencing inflation and is due for a severe correction later this year.
Plus you have the Greek default later this year. Their bailout is only temporary. Then Spain, Italy, Portugal are not far behind. Unfortunately for Wall St, they are rumored to have issued CDS's to France and German banks who they sold the Greek bonds to and Wall St is on the hook if Greece defaults. But a side deal is in the works to give France and German banks some of the spoils of Greek gov't held properties and infrastructure when they default. Of course if the Greek population has their way, they will throw out the gov't and declare the Greek bonds issued by Goldman Sachs to be fraudulent and unenforceable. They were fraudulent because GS tinkered with the Greek books to hide vast amounts of debt from the French and German banks who bought the debt. The bank CEO's will then be thrown into prison like what happened in Iceland. I don't think the Greek population will take this debt burden sitting down.
And let's not forget about QE3 from Uncle Ben. He promised not to print any more money but I suspect he had his fingers crossed at the time. No one is buying the American debt besides the Fed. If there is no QE3, then the gov't will go bankrupt. They more money to pay the interest on their loans.
And let's not forget about inflation. If interest rates rise sometime in the next 6-12 months the gov't will have to get the Fed to print a lot more money to pay for the cost of living increases. Approx 15% of the GDP is used to pay the interest on the debt. If the interest rates go up to 6%, then at least 50% of the GDP will go towards paying the interest on the debt.
Then there are the American states and cities that are teetering on bankruptcy. They will have to default. The Federal gov't has no money to lend them.
Ah yes, the next 6 months looks very interesting.
Wiz