#3: The US will Default on its Debt
… either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years.
Bear in mind, I’m completely ignoring the debt we took on with the nationalization of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every US family making $31,000 in debt payments per year for 75 years to pay off our national debt.
Obviously that ain’t going to happen.
(CNBC) — The US supremacy as the top world economy will end sooner than many people believe, so gold is a better investment than the dollar despite it hitting a new record, Tom Winnifrith, CEO at financial services firm Rivington Street Holdings, told CNBC.com Monday.
The US trade deficit and debt continue to grow and the authorities are reluctant to address the problem, preferring to print money, Winnifrith said.
“America is practically owned by China,” he said.
He reminded of the fact that in 1900, sterling was the world’s reserve currency but by 1948, that was no longer the case as the British Empire collapsed.
“America is doing what Britain did,” Winnifrith said. “America spends much more than it can afford and it’s not addressing the issue.”
In 1832, China and India were the world’s two largest economies and by 2032, they will regain that status, he predicted.
“The 200 years when Britain and the US were the top two economies were an aberration and that will change,” Winnifrith said.
“The decline of empires has happened much faster than folks think. I believe that gold will be a far better bet in 20 years than the dollar,” he added.
Published: Monday, 27 Sep 2010 | 6:08 AM ET
By: Antonia Oprita