Three Horrifying Facts About the US Debt “Situation”

[Watchman]

Three Horrifying Facts About the US Debt “Situation”

Phoenix Capital Research
Zeero Hedge
October 7, 2010

Since too often financial articles consist of some stooge blathering on and on with opinions instead of facts, I thought today we’d simply focus on some FACTS about our current financial system which few if any want to acknowledge.

#1: The US Fed is now the second largest owner of US Treasuries.

That’s right, this week we overtook Japan, leaving China as the only country with greater ownership of US Debt. And we’re printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June… as in four months ago. Want an explanation for why stocks, commodities, and Gold are exploding higher? Here it is.

#2: “There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.”


This horrifying fact comes courtesy of Morgan Stanley analyst David Greenlaw.
And it confirms what I’ve been saying since the end of 2009, that the US has
entered a debt spiral: a time in which fewer and fewer investors are willing to
lend to us for any long period of time… at the exact same time that we must
roll over trillions in old debt and issue an additional $100-150 billion in
NEW debt per month in order to finance our massive deficit.

And only $550 billion of the debt we’ve got to roll over has a maturity greater than 10 years!?!?

So we’re talking about TRILLIONS of old debt coming due in the next decade. The below chart depicting the debt coming due between 2009 and 2039 comes courtesy of the US Treasury itself. In plain terms, we’ve got some much debt that needs to be rolled over that you can’t even fit it on one page and still read it.

#3: The US will Default on its Debt

… either that or experience hyperinflation. There is simply no other option.
We can NEVER pay off our debts. To do so would require every
US family to pay $31,000 a year for 75 years.



Bear in mind, I’m completely ignoring the debt we took on with the nationalization
of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted
onto the Fed’s balance sheet. And yet we’re STILL talking about every US family
making $31,000 in debt payments per year for 75 years to pay off our national debt.

Obviously that ain’t going to happen.

So default is in the cards. Either that or hyperinflation
(which occurs when investors flee a currency).
Either of these will be massively US Dollar negative and
horrible for the quality of life in the US. But they’re our only options, so get ready.

 

[Cestbon]

I have see it coming. Nearer and nearer . US will bankrupt facing situation like Greece or worst USSR seperated into few independance country. Those rich state will want to move away from state that cannot manage the deficit.
US spending on defend(Army/navy/airforce) slowly killing it own. Spending for 2010 will be over US$650b. That about total 45% of the total world defend budget spending on one country with only about 300million population. Meaning 5% of the poplulation on earth spending 50% world defend budget. Sure that will kill the US.

 

[123456787654321]

Nothing to be horrified about. The US will simply ignore its debt as always. And if their quality of life is threathened, they can simply recolonise the East together with the Europeans, along with Africa and South America.

 

[Royalblood]

Nothing to be horrified about. The US will simply ignore its debt as always. And if their quality of life is threathened, they can simply recolonise the East together with the Europeans, along with Africa and South America.

Recolonise the east!? :oIo:

Last i check, the imperialistic NATO can hardly contain the rag-tag militants armed with out-dated and homemade weapons in the middle-east.

Last i check, western nations have been losing war against Asian nationals since post WW2.

Asian civilization is much more sophisticated and stretch furtherback relative to western civilization. Back in the dawn of civilization, we had seen great Asian imperialist annexing western land; from Genghis Khan expansion in to europe to the middle-eastern invasion of meditteranian europe.

Alas, the table turns in favour of the western imperialists as they shallow up the whole world.

Now, we see the rapid and painful demise of the west and how they are unsustainable without resources pouring in from Asia.
If trend is anything to go by, we shall see Asians emerging as the next master imperialists of the world. An eye for an eye, we shall do upon the west what they had done to us. Highly achieveable given the major shift in power from the west to Asia.