Tag Archives: us debt default

Is Barnaby Really An Idiot?

13 Mar

Take a look at this chart, and then think very carefully about your answer (click to enlarge) –

USA - Federal Surplus / Deficit since 1901

That chart is from the US Federal Reserve, St Louis branch.  For the last 108 years.

And it’s not bang up to date.  It only goes up to end September 2009. Hard to believe, but the US government has gone much, much deeper into the negative in the 5.5 months since then. In February alone, the US went another US$221bn into the hole. That’s a one month record.

Do you remember how the Rudd Labor and mainstream media’s assault on Barnaby Joyce’s economic credibility began?  When he publicly questioned whether the US could default on its debt.

Well… what do you reckon?  Look at that chart.  Think about it.  Use your own commonsense.

Barnaby is right.

And there are plenty of esteemed international economists … including the current chairman of the US Federal Reserve… who agree.

As does US Secretary of State, Hillary Clinton, who called the US deficit a ‘national security risk’ just 2 weeks ago.

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Clinton: US Deficit A National Security Risk

27 Feb

US Secretary of State Hillary Clinton says that “outrageous” advice from former Federal Reserve Chairman Alan Greenspan helped create record U.S. budget deficits that put national security at risk:

“We have to address this deficit and the debt of the United States as a matter of national security not only as a matter of economics,” Clinton said. “I do not like to be in a position where the United States is a debtor nation to the extent that we are.”

Having to rely on foreign creditors hit “our ability to protect our security, to manage difficult problems and to show the leadership that we deserve,” she said.

“The moment of reckoning cannot be put off forever,” she said. “I really honestly wish I could turn the clock back.”

Barnaby Joyce has been pilloried mercilessly for daring to voice concerns about the USA and its massive debts. Even though many acclaimed international economists agree with his concerns.

In light of Secretary of State Clinton’s testimony, will Rudd Labor and the Australian mainstream media now apologise for their smears, abuse, and ridicule of Senator Joyce?

More importantly, will Lindsay Tanner, Wayne Swan, Ken Henry, Glenn Stevens, and the media now pause to properly consider Barnaby’s prescient warnings about an impending Day of Reckoning for Australia?

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This Crisis Won’t Stop Moving

26 Feb

From the New York Times:

You know we’re in trouble when we’re told that the economic problems in Greece, Portugal and Spain, the most indebted countries in the euro zone, are likely to remain safely contained in those nations.

After all, we heard the same nonsense in 2007 from United States financial leaders talking about the subprime mortgage mess. Both Ben S. Bernanke, the chairman of the Federal Reserve Board, and Henry M. Paulson Jr., then the Treasury secretary, rolled out to reassure concerned investors that troubles in mortgage land wouldn’t permeate the rest of the economy.

As we all now know, mortgage woes were contained — to planet Earth. And so it may be with overleveraged nations in Europe.

Simply put, contagion is a fact of life in our interconnected global economy and financial markets. And that means investors must strap in for more gyrations in the stock and bond markets as the great and painful deleveraging that began in 2007 continues around the world.

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Hummel: The US Will Default On Its Debt

26 Feb

Barnaby warned about the possibility of US sovereign debt default. San Jose State University economist, Professor Jeffrey Rogers Hummel, makes a prediction:

It is not literally impossible that the Federal Reserve could unleash the Zimbabwe option and repudiate the national debt indirectly through hyperinflation, rather than have the Treasury repudiate it directly. But my guess is that, faced with the alternatives of seeing both the dollar and the debt become worthless or defaulting on the debt while saving the dollar, the U.S. government will choose the latter.

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