The party should continue on as long as the music does not stop. I think that Chuck Prince from Citigroup said something like that.
Paradigm shift, not just sex change, is needed ....................
Appearance is everything. because it will help the hide those working behind the scenes who really run the show.
The $17 trillion debt currently on the book does not include the tens of trillion of off balance sheet items, and the present value of the all future obligations, such as Federal Employee Pension and Medicare, etc.
If the PONZI did not collapse in the past, I guess it should not pop in the near future. So why worry ?
We should all calm down and party on. Do not worry about the eventual collapse of the PONZI game which might be many decades away. ;-))
Apple probably would have sold 5 billion units of popular iPhone, iPad before the final collapse of the debt bubble many years from now. So do not worry and party on!
So should we worry? No. The sooner this PONZI game collapses, the sooner we can start afresh.
There is no worry, because the problem will get too big for the "mortals" to solve. ;-))
So party on!
The $17 trillion sovereign debt on the book is only a tip of the iceberg. The total liabilities, including the explicit debt load, off balance sheet items, and the present value of the future obligations, could reach between $50-100 Trillion, based on various estimates.
You can say that the solution is now in the hands of "God".
Apparently the austerity programs are out of the windows, since they tend to cause recession and unrest.
The question is how long Fed can keep pumping the "imaginary credit" into the system while pretending those money are real? Who will be the first to say " The Emperor does not have anything on him."?
"The Emperor does not have anything on him." I wonder for how long people will be fooled.
It is due to global economic structure: US is the consumer and China is the lower value-added manufacturing base for the world.
Can Japan refuse payment of USD for its exports?
Again, the debt load, currently stands at $17 Trillion, is only the tip of the iceberg of total future obligation of US. The truth is t hat it cannot be solved by austerity programs at these levels.
So the rational decision would be to continue to employ creative short-term solutions, such as QEs, demographic engineering, etc., until one day it become "too big to fail".
It is likely that the US debt problem will someday in the future become too big to fix by men. So why worry?
In hindsight, the recent clown show of government "shut down" and "debt ceiling" was obvious staged. As I have argued earlier, neither side of the political spectrum wants austerity programs to solve the long-term insolvency of US finance. It increasingly looks like that both of the sides have committed to short-term fixes such as expanding the GDP at the same pace as the Sovereign debt in order to maintain relative stable debt to GDP ratio. The demographic engineering through Healthcare Reform and Immigration Reform are some of the temporary measures implemented or considered.
If this indeed is the plan of those who proclaim to have done the "God's work", then we know that by 2017, the US real GDP would likely reach $19 trillion (CBO and OMG estimates) with an impressive 4+% annual growth. While the total US sovereign debt could reach $20 trillion, the expected GDP to Debt ratio would held relatively stable.
When, or if, this scenario becomes materialized, the federal reserve might start to remove the backstop, i.e. the trillions of dollars handed over by the Creator (;-)). That is when the global equity market might get volatile, again. But, before that actually happens, the Federal Reserve will likely continue to pump the "Almighty Credit" into the global economic system, prompting the participants in the economy to become more "willing" to engage in the transactions so as to create the money needed to boost the economy.
Some prudent people might ask: what happen when the positive effects of these temporary fixes wear out and the negative effects become dominant many years from now? Since I am no genius nor wizard, I would say: do not need to worry about it because you are dealing with benign "Invisible Hand" here. In the worst scenario, a global debt RESET could be executed, and every country will have a clean balance sheet to start with
China still plays the role of "manufacturing base for the world" role. It rely on the people from US and Europe to buy its products.
Given the intention of the policy makers demonstrated in the recent "shut down" drama, the debt problem will get bigger and bigger. Someday, it might get too big to be fixed by men.
So why worry?