Record $14 trillion-plus debt weighs on Congress

[Edbear]

What will ultimately destroy America is the US dollar no longer being the currency in which oil is traded. Once this happens every single thing will rise in price some crazy percentage on the order of 200-500%. Sad days are ahead.

Being american myself, I fear whats going to happen to all my family back home.

I hope you're wrong

I finally shifted my kids from the other side of the world over similar fears for the future of the UK...

NZ and Aus are to certain extent insulated but particularly in fuel energy are we vulnerable to price increases. Keep an eye on the world news as we have only just started to see the effects of the collapse of the world's financial system. Brace yourselves for continuing price rises for the basic necessities.

[pete376403]

What will ultimately destroy America is the US dollar no longer being the currency in which oil is traded. Once this happens every single thing will rise in price some crazy percentage on the order of 200-500%. Sad days are ahead.

Being american myself, I fear whats going to happen to all my family back home.

Iraq, under Saddam, was proposing to move from US Dollars to Euros for oil trading. US of course could not allow that to happen as this would have been the real WM(US)D. So look what happened to Saddam.

http://www.independent.co.uk/news/bu...r-1798175.html
(and yes, the story is by Robert Fisk, whom right wingers hate passionately)

Quote" Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq. "

However the idea still has traction among other oil states.

[mashman]

NZ and Aus are to certain extent insulated but particularly in fuel energy are we vulnerable to price increases. Keep an eye on the world news as we have only just started to see the effects of the collapse of the world's financial system. Brace yourselves for continuing price rises for the basic necessities.

or even a little closer to home

[shrub]

NZ and Aus are to certain extent insulated but particularly in fuel energy are we vulnerable to price increases. Keep an eye on the world news as we have only just started to see the effects of the collapse of the world's financial system. Brace yourselves for continuing price rises for the basic necessities.

For several decades we have been living in a fools paradise and enjoying an artifically lavish lifestyle on the backs of Asian savers. They save money and we borrow it off them at high interest rates and spend it on the stuff they make. They have been incredibly clever, although what will happen when we can no longer afford to buy their shit and can't afford to pay back our loans is anyone's guess.

[Edbear]

For several decades we have been living in a fools paradise and enjoying an artifically lavish lifestyle on the backs of Asian savers. They save money and we borrow it off them at high interest rates and spend it on the stuff they make. They have been incredibly clever, although what will happen when we can no longer afford to buy their shit and can't afford to pay back our loans is anyone's guess.

Cue the US situation...

[shrub]

Cue the US situation...

Yeah, that's one likely scenario. But then China is facing problems too: http://www.independent.co.uk/news/bu...n-2190283.html

I think whatever happens we are watching the end of the American empire, and sadly we will go down with it, especially with the limp government we have (and are likely to have for the forseeable future, given the flaccid opposition).

[Brian d marge]

For several decades we have been living in a fools paradise and enjoying an artifically lavish lifestyle on the backs of Asian savers. They save money and we borrow it off them at high interest rates and spend it on the stuff they make. They have been incredibly clever, although what will happen when we can no longer afford to buy their shit and can't afford to pay back our loans is anyone's guess.

The Japanese debt , largely from savings bonds bought by the Japanese, will be a problem soon
As Mr and Mrs Joe Plumber san get older , they WILL cash in their investments , where that cash is going to come from is anyones guess

Also the trend towards NOT saving is gaining ground here

Stephen

[shrub]

The Japanese debt , largely from savings bonds bought by the Japanese, will be a problem soon
As Mr and Mrs Joe Plumber san get older , they WILL cash in their investments , where that cash is going to come from is anyones guess

Also the trend towards NOT saving is gaining ground here

Stephen

Actually we will have a more interesting problem closer to home. Over the next few years Mr and Mrs Babyboomer kiwi will be retiring, and looking to sell their big flash house and move down to something smaller and a little cheaper and use the money as retirement savings (and yes, I'm one of them and was planning on doing just that once kids had left home etc). Therefore we will have a lot of big 4-5 brm/2 lounge/multi-bathroom houses in the burbs for sale.


If I could only convince my daughter to leave home and adopt out my partner's daughter...

[Okey Dokey]

I think the whole situation for the average working person, either in the US or here, is tragic. So many put in a days work day after day, pay their taxes, want to buy a house and get a mortgage. Raise a family, enjoy a holiday. Not everyone spent up crazily.

Most people, I think, attend to politics at election time only, and then get on with their lives. Now they find their elected representatives have let a crazy banking system run amok and so the average guy on the street has to pay? So many out of work. The little guy ends up carrying the can, but is that really fair?

I know it its trendy to scoff at the Yanks, but I've known many and found them to be very likeable, honest and hard-working. Like a lot of kiwis, really. Nothing like the fat-cats bankers nor the idiots on reality tv shows. I gain no pleasure from the pain of regular people getting screwed by a system which is rarely (never) held to account, either here or overseas.

My 2 cents.

[mashman]

it'll be interesting if this goes through:

"Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors."

nothing like making it to retirement only to find that the state has gone tits and legally doesn't have to give you a pension (not that that would happen, but...)

[Brian d marge]

Actually we will have a more interesting problem closer to home. Over the next few years Mr and Mrs Babyboomer kiwi will be retiring, and looking to sell their big flash house and move down to something smaller and a little cheaper and use the money as retirement savings (and yes, I'm one of them and was planning on doing just that once kids had left home etc). Therefore we will have a lot of big 4-5 brm/2 lounge/multi-bathroom houses in the burbs for sale.


If I could only convince my daughter to leave home and adopt out my partner's daughter...

One thing I like here

is that , you don't sell the family home , you build on the back section a smaller house and move into that , the kids get the family house . so in effect you can have 3 families living on the one section , ( upstairs downstairs separate units in the big house , mum and dad living in a new , made for oldies house at rear

who do the kids pay the rent to ,,,,,,,,,,,,,,,,,,,,,,, DAD

hey they win as the rent is half of the going rate !

Stephen

[Winston001]

For several decades we have been living in a fools paradise and enjoying an artifically lavish lifestyle on the backs of Asian savers. They save money and we borrow it off them at high interest rates and spend it on the stuff they make. They have been incredibly clever, although what will happen when we can no longer afford to buy their shit and can't afford to pay back our loans is anyone's guess.

True but it's more complex than that. For example, if we (the decadent West) can't repay our loans, whose problem does that really become? The lender. We've got the money and they don't.

The main reason we have experienced the Global Recession is the huge ballooning of capital in the world economy since the early 1990s. Many people in many nations made a lot of money - and that included emerging economies such as the Chinese and India. On top of that oil rushed away to a high value transferring even more wealth to the few oil-rich nations.

All of that money needed a home so investors desperately sought out places to put it.....and consumers in the OECD countries were very happy to borrow from them.

When all the buying stopped, those Middle East, Chinese, Venezuelan, Japanese etc investors lost their money. Not just us. Them too. Even worse we stopped buying their stuff.

No big deal, the global economy will settle down eventually but the balance between nations won't be as it was.

[Winston001]

The other point which needs to be considered is that the USA still has an economy 3 times the size of China. And with only 330 million people as opposed to 1.2 billion. China is facing real limits in terms of food and industry while its citizens are racing to grab a Western lifestyle. The environmental cost will be too high.

Their currency is kept artificially low to keep sales going but eventually the Chinese will price themselves out of existing markets. Just as Japan did in the 1970s when Taiwan and South Korea took over as the cheapest suppliers. We should expect Brazil, Bangladesh, and some parts of Africa to replace China.

As for the USA - I agree it's day as the global economic superpower is over but its nowhere near down and out. Consider the tiny island of Britain. Astride the globe with a Commonwealth of countries to draw wealth from in 1900. Rich beyond comprehension.

Today - all alone (apart from the Frogs and Fritzes). Nevertheless Britain still has enormous wealth and controls businesses all around the world. It is very far from down and out - and it lost far more in two World Wars than the US has currently put at risk.

[ajturbo]

The other point which needs to be considered is that the USA still has an economy 3 times the size of China. And with only 330 million people as opposed to 1.2 billion. China is facing real limits in terms of food and industry while its citizens are racing to grab a Western lifestyle. The environmental cost will be too high.

Their currency is kept artificially low to keep sales going but eventually the Chinese will price themselves out of existing markets. Just as Japan did in the 1970s when Taiwan and South Korea took over as the cheapest suppliers. We should expect Brazil, Bangladesh, and some parts of Africa to replace China.

As for the USA - I agree it's day as the global economic superpower is over but its nowhere near down and out. Consider the tiny island of Britain. Astride the globe with a Commonwealth of countries to draw wealth from in 1900. Rich beyond comprehension.

Today - all alone (apart from the Frogs and Fritzes). Nevertheless Britain still has enormous wealth and controls businesses all around the world. It is very far from down and out - and it lost far more in two World Wars than the US has currently put at risk.

wow.. that is a great perspective... it seams to be positive?

[mashman]

True but it's more complex than that. For example, if we (the decadent West) can't repay our loans, whose problem does that really become? The lender. We've got the money and they don't.

It's not complex at all. The tax payer of the country that's going down the gurgler will pay... not those who made the shitty deal, not the govt, not the country, not those who have called in the loans, not the businesses (they just go under and fuck off with what cash they can)... so who pays?

The tax payer!

Today - all alone (apart from the Frogs and Fritzes). Nevertheless Britain still has enormous wealth and controls businesses all around the world. It is very far from down and out - and it lost far more in two World Wars than the US has currently put at risk.

Yet they are still over 1 trillion pounds in debt. How can that be if what you say above is correct? Who's gonna pay for that debt?

The tax payer!