The Impending Debt Crisis

It’s no secret that most of the organized governments in the world are essentially broke. The current debt to GDP ratio in the United States is almost 100%, a fairly incredible number that continues to rise. That number alone indicates that the US is in poor financial shape, and it’s not even that accurate a number. For example, the US has a number of off budget items that are technically debt as well – all the Freddy May and Fannie Mac purchases, Social Security (the US has been taking the money every year and basically putting an IOU in its place) and Medicare. If you factor in all of those items, realistically the debt-to-GDP ratio of the US is more […]

I’m really surprised I didn’t read more about this today, but I imagine in the coming days more people will have something to say about it. China and Russia announced today that they would only be trading in their respective local currencies for trade between their own countries and abandoning trade settlement with the US dollar. This is big news. Ever since the abandonment of the gold standard, all international trades have historically been settled using the US dollar. This coveted position is known as the US Dollar’s Reserve Currency status, and it effectively gives protections for the United States that other countries don’t have. For example, even though the United States has continuously debased its currency by printing money […]