Its also very interesting to note that the current US debt to GNP ratio is much higher than at the time of the great Wall St crash.
The US is not bankrupt, it has far too many resources for that to happen, but, its going to see some pain in the next 5 years.
Most of this pain will be due to the fact that the US economies strength is based on spending. The counter outcome of this is thet US citizens have the smallest per capita savings of any western economy.
The Japanese survived the "missing years" of the nineties due to the fact that
15% of their reserves was persomnal savings, they were able to ride it out.Mr Greenspan and GW have brought the greatest economy in the world to its knees during their tenure, quite a record!!
The other thing to note is that these large banks being thrown a lifeline by the US government are getting "funny money", its still wet from the printers machine.
China ownes $500 billion in US treasury bonds as well as huge cash resources followed very closely by the oil producing countries. This money is being spent back in the US
as its value overseas is very diminished. You are now seeing large swathes of US assets being bought by overseas companies.
Even Canadian banks are getting in on the action by buying up US banks at rock bottom prices.
Its not all "Doom and Gloom" but I guess some severe home economics amputations will be be performed sooner rather than later.
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