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Submitted by Deepcaster on Thu, 3 Feb 2011 “Is the US’s financial position hopeless? I’ve studied the US finances backwards and forwards, and as I see it the US’s financial position most definitely is hopeless.
The actual posted national debt of the US is $14.1 trillion. However, the US reports its finances on a cash basis while omitting its unfunded obligations in such items as Social Security, Medicare and Medicaid and various other entitlements. If the entitlements are included, the total national debt including unfunded obligations would be over $100 trillion…
So what in God’s name is the answer to all this? How will the US’s finances be handled? There are only two ways that I can come up with:
The first is — to default, just declare that the nation is dead broke and it can’t meet its obligations. That would be tantamount to admitting that the US is less than a third-rate power, a dying banana republic. Unthinkable.
The second way would be to devalue the currency to the point where obligatory dollar debts would be financed or paid off with dollars equal to pennies or nickels.
It’s now really a question of timing. With the national debt compounding at rising rates, the problem of financing the debt becomes ever-more pressing. For this reason, I believe the process of devaluing the dollar will have to be speeded up.
From the government’s standpoint, the deliberate devaluation strategy must be kept secret from the public. They must not be allowed to know that the currency they’ve worked so hard for, that the currency their savings are in, is to be crushed into a shadow of its former self. Ultimately, the awful truth must come out.
At some point the government may be forced to be honest. The phrase will be three words that I coined many years ago: “Inflate or die.” And, the government’s answer will be, “You wouldn’t want this nation to die, would you? We have no choice, but to pay off, or carry, the debts, with a currency that must be devalued down to ten cents on the dollar.”