Posted on 12/20/2010 10:40:54 AM PST by Zakeet
By now everyone has seen and played with the US debt clock via usdebtclock.org whereby anyone who so wishes, can find every little detail about America's current sad fiscal state. The fact that America currently has just under $14 trilllion in national debt should be no surprise to anyone who professes to having an even modest interest in the state of the US economy. Yet a new feature on the "debt clock", namely one which extrapolates future debt at current rates of advancement (instead of one based on the always completely inaccurate CBO estimates), and looks at US debt in the year 2015 will probably make many stop dead in the their tracks. If anyone thought that $14 trillion in 2010 debt is bad, just wait until we hit $24.5 trillion in total US national debt in 2015. And it gets even more surreal: total US Unfunded Liabilities are estimated at $144 trillion, roughly $1.2 million per taxpayer... Was that a pin dropping?
As Zero Hedge has long been predicting, we anticipate roughly $2 trillion in incremental debt per year. Surprisingly we are not far too off from where the "debt clock" sees US leverage in 5 years. At an estimated $24.5 trillion in federal debt, our $2 trillion per year run rate is spot on. Another thing that is spot on: our prediction that the US will need not one but two debt ceiling increases in 2011. And probably 6-8 over the next 5 years.
Some other observations for the US economy in 2015 simply assuming current conditions persist:
And the most critical data:
Should one of the bolded predictions hit, the travails of Greek and Irish bondholders will be nothing compared to what those unlucky enough to be in possession of US debt in 2015 will have to go through.
Oh. I think I'm going to go out tonight and buy more gold coins. And vodka...
Oh I get it. You work for Congress. That's you can promise to pay the entire world something on the order of 12 or 13 Trillion dollars over the next decade or so and no one takes you into custody for your own protection.
No, I just understand that you have to look at both sides of the equation.
Our promise to pay (the politician's promise) is equal to what the recipients will receive.
But no one wants to face the fact that we are looking at reduced living standards for America even if we do all the right things.
We have tried to make ourselves rich by borrowing for the last forty years, and now the piper's at the door, waiting to be paid.
It's time for a President who promises nothing but what Churchill promised in 1940.
Is Palin the only Pollyanna out there among the candidates? No, but most Freepers seem to think she is different from the rest. To me, she is just another voice telling Americans the soothing things they want to hear.
Unless of course there's no actual money to pay them with.
Yes, the promises will be reduced.
I was thinking tomorrow, maybe some more storable food. LOL.
Water filters, you can never have enough water filters.
Are you f’ing kidding me?!?!
What the hell are these pigs doing with there time?!
uh we have 75+ Million Retirees, and 22 million or so unemployed the rest are under 18, unless were going to child labor the workforce will always be about 1/3 the population in a stage 4 society, as 1/3 of the pop is under 18, 1/3 is of productive age and the rest is over 60 and retired or underemployed in there advanced age. America is in a particular bad spot as we progress to a stage 5 society where our elderly are living longer and start to out number the productive aged. Like japan our population pyramid is getting top heavy as the natural birth is not replacing productive workers faster than people are reaching retirement age and leaving the work force. This is one of the prime drives for immigration to replace the workers not being born here to native citizens our gross birth rate is only 1.2 this is sub replacement levels. The the greatest generation breed in the baby boomers, but gen X is not having enough children to replace their parents leaving the work force the choices are grim, raise retirement age to index it to increased life span, lower SS benefits, and limit medicare payouts, Bring in more workers that actually pay into the system, or run massive debt to keep the ponzi running as long as possible. The other choice is socialize medicine and make life expectancy fall by limiting access to life prolonging procedures and drugs the EU already does this to great success; thus eliminating the top heavy portion of the population, it appears we have chosen to run up debt and socialize medical care, you can bet that indexing the age of retirement comes next and then higher taxes and more documented immigrants. We need H1B's not illegals as the H1B's are typically professionals that make middle to upper middle calls income and pay taxes unlike the illegal aliens who only consume resources last i heard they consumed 70% of the social services funding in Commiefornia and they wonder why they are insolvent.
I agree. The only end result will be D E F A U L T by the US Treasury and probably the issuance of a new currency under a new regime.
A country cannot completely lose it's fiat currency and keep it's existing regime of government...at least I am not aware of any examples in history.
The US debt will be repudiated and the parasite class (govt employees and entitlement recipients) are in for the shock of their lives.
Mariner, you broke the code.
To put things in perspective, the GNP of the ENTIRE WORLD is only $ 62 trillion.
“Quantitative Easing 2” will soon become “Holy Sh#t Shoveling 1 through 10”.
“The Federal Reserve can be considered to have created unfunded assets by buying treasuries and holding the same on its balance sheet.”
Federal Reserve is the primary tool of the new financial oligarchy – The ultimate banking clearing house with zero oversight from the people still holds over $2 trillion on its balance sheet.
“The only end result will be D E F A U L T by the US Treasury and probably the issuance of a new currency under a new regime.”
Do you think it will be called the Bancor or the Amero?
“A paper entitled “Reserve Accumulation and International Monetary Stability” by the Strategy, Policy and Review Department of the IMF recommends that the world adopt a global currency called the “Bancor” and that a global central bank be established to administer that currency. The report is dated April 13, 2010 and a full copy can be read here.”
http://www.imf.org/external/np/pp/eng/2010/041310.pdf
from...
Unofficial’ Liabilities
Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.
Looks like the “Bancor” has the inside track for the name.
The “Amero” would not sound diverse enough.
KnowwhatImean?
I prefer the “Worthless”, myself.
I love your hilarious links.
Even as the Fed gloats that the economy is on a mends, we see that the Fed balance sheet hasn’t really shifted since the financial crisis hit:
Yeah, hasn't shifted, except for tripling in size. LOL!
The Fed has bailed out shopping malls in Oklahoma that have no adequate traffic to justify their existence all the way to luxury hotels.
Show me. There was no backup to this claim.
The Fed would like you to believe that they are using their own money but this is a lie.
Really? They don't use their own money?
This is the institution that has over $2 trillion in “assets” and doesn’t want to say what it is
They release their balance sheet once a week.
You should try actually reading them.
About my links though I bet this one is your absolute favorite...
No, The Big Banks Have Not “Paid Back” Government Bailouts and Subsidies
http://www.zerohedge.com/article/no-big-banks-have-not-paid-back-government-bailouts-and-subsidies
I read it, that's where I took the excerpts.
No, The Big Banks Have Not “Paid Back” Government Bailouts and Subsidies
The biggest banks have paid back all the loans. Many smaller banks haven't.
"But these days, trading isn’t risky at all. In fact, it’s safer than walking down the street.
Why?
Because the US government is lending money to the big banks at near-zero interest rates. And the banks are then turning around and lending that money back to the US government at 3%-4% interest rates, making 3%+ on the spread"
I’m so tired of this silly claim. The Fed loans to banks overnight at 0.75%. That’s not zero. If you borrow overnight and turn around and buy a 10 year bond you’d have a 2.6% spread and you’d be an idiot to boot.
Lehman and Bear Stearns bought long term bonds and financed them with overnight loans. We can see how that worked out for them.
Finally, if this “trade” was such a guaranteed money maker, why are banks only borrowing $22 million at the discount window?
Then, also from your link, I saw this.
To get a clear picture of what is going on here, ignore the intermediate steps (borrowing money from the fed, investing in Treasuries), as they are riskless,
That was Paul Abrams.
If Paul thinks 10 year Treasuries are riskless, he's a MORON! Paul should buy some 10 year Treasuries and hold them until rates rise to 6%. Then he'd see how riskless they are. Damn, Paul is a stupid assclown.
Finally, there was this.
There is another type of guaranteed spread that allows the giant banks to make money hand over fist. Specifically, the Fed pays the big banks interest to borrow money at no interest and then keep money parked at the Fed itself.
I'm not sure which joker came up with that idea, but whoever it was, they're an idiot.
Banks don't want to borrow from the Fed at 0.75% so they can park it in reserves paying 0.25%.
You could find a bigger bunch of assclowns saying more stupid stuff than that article you linked, but it would probably take years and a large government contract.
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