Been watching a lot of economic interviews lately making sense of the current crisis of confidence.

This one from David Tice struck a chord in that he correctly identifies our credit driven culture as the primary source of the inflated market values, which sooner or later inevitably come crashing to earth.

http://www.youtube.com/watch?v=yY6u-sXKGSo&feature=related

What could be worse than the Fed's 'corrective' measures, supplying even more cheap credit with lower interest rates???

The USA declaring bankrupt (no payment of loans to foreign countries) ?

The current policy is ...spend, cut rates and hope for salvation. Bail water faster.

Unfortunately rates are now so low that the U.S. government has blown its arsenal to shore up the dollar. The chamber is empty in the gun. Borrowing to spend more just weakens the dollar.....there's no incentive to invest in U.S. stocks or TBills.

Tax rebates!! A fools game. They are BORROWED dollars....more red ink chalked up on the national debt.


The estimated population of the United States is 304,162,873
so each citizen's share of this debt is $30,222.59. (and will grow $5 tomorrow and every day....$35/week...over $150 a month....if you are family of 4 that's $600/month. $7,200/year. This time next year the taxpayers in that family of 4 will be paying $380 more in taxes just to service the INCREASED debt for the year while paying none of it off.....on the total accumuated debt each year the government (taxpayers) cost to service it (and pay nothing off the principal) is the equivalent of giving each family of 4 a brand new SUV with some bells and whistles.

Bail water faster.
Thats a good way of putting it. Forget about the leaks...just keep bailing damnit!

The estimated population of the United States is 304,162,873 so each citizen's share of this debt is $30,222.59. (and will grow $5 tomorrow and every day....$35/week...over $150 a month....if you are family of 4 that's $600/month. $7,200/year. This time next year the taxpayers in that family of 4 will be paying $380 more in taxes just to service the INCREASED debt for the year while paying none of it off.....on the total accumuated debt each year the government (taxpayers) cost to service it (and pay nothing off the principal) is the equivalent of giving each family of 4 a brand new SUV with some bells and whistles.

I've been aware of this statistic for quite some time but it still makes me stop and gape every time I see it.

Check this out...the best documentary on the credit based monetary system Ive yet seen!

http://moviealien.com/video-44-1527613

And the solution should be?

And the solution should be?If you watch it to the bitter end the documentary does make some suggestions for radical changes in monetary policy.

I know...its long!

Your reply to the OP's question
"What could be worse than the Fed's 'corrective' measures, supplying even more cheap credit with lower interest rates???"
was:The USA declaring bankrupt (no payment of loans to foreign countries) ?I am not so sure that would be worse.

While I think there is essentially zero chance of US renouncing it foreign debts that might be better than running the printing presses to pay the maturing bonds (after China, Japan, and oil exporters cease "rolling" their holdings and want payments* instead).

True US would lose it AAA+ rating and not be able to borrow from foreigners** for a long time, but at least domestic saving would not be completely destroyed by hyper inflation. The US appears to be heading in that direction to me as Ben's FED cuts interest rates for short term economy gains. More at:

http://www.sciforums.com/showpost.php?p=1502039&postcount=1

Argentina declared default a couple of years ago and is now growing at several times the US's rate averaged for the last few quaters. If Argentia can "go it alone" surely the US can. True, It would mean a lot of belt-tightening hardship, higher cost of living if US were to return to making what it needs instead of importing most of it, but IMHO, the current path leads to total collapse of the US economy (and a prolonged depression for most of the world's nation not supplying food stocks, raw material, and energy to Asia. ***- those who might be called the "CEC"s - China's Economic Colinies)
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*Obviously they will not want to hold the dollars they receive either. That is why they are rapidly creating "sovern funds" More at:

http://www.sciforums.com/showpost.php?p=1725460&postcount=80

That is the last post now there (by Carcano) in thread I started. It has good link to an Economist article, (I joking have said I plan to sue them for copying my POV and earier posts.)
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**It can always tax Joe American (especially the wealthy ones, Like Sandy who failed to see this coming and thus did not get their wealth out of the US) if they will not buy the new ESBs - "Emergency Survival Bonds."
***India included, of course.