Category: US Debt
The analysis published under this category are as follows.
Thursday, August 15, 2013
America is Detroit / Politics / US Debt
By: Videos
O“Rich Dad/Poor Dad” author Robert Kiyosaki says, “I am terrified for my fellow human beings. Detroit just declared bankruptcy, and most Americans have no idea what that means. The idea that Detroit went bankrupt is the canary in the mine. . . . It means the end of the industrial age.” Kiyosaki, who wrote the best-selling financial self-help book of all-time, goes on to say, “America is Detroit. . . .
Wednesday, August 14, 2013
U.S. Debt Nears a Tipping Point, Dire Economic Consequences / Interest-Rates / US Debt
By: Money_Morning
Garrett Baldwin writes: As U.S. debt as a percentage of GDP hovers at levels not seen since World War II, concerns are growing that the American economy is susceptible to a debt crisis in the near future.
Here's why people are worried: If interest rates return to normal levels of around 5% as the U.S debt approaches $20 trillion, then servicing that debt each year will cost taxpayers $1 trillion.
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Thursday, July 25, 2013
Detroit Bankruptcy, the Law, and Leonard Garment / Politics / US Debt
By: Fred_Sheehan
The City of Detroit, Michigan's petition for "bankruptcy protection and the adjustment of debts under chapter 9 of the United States Bankruptcy Code" (case number 13-53846 United States Bankruptcy Court for the Eastern District of Michigan, Southern Division), offers plenty of opportunity. Among the potential windfalls are to those who buy contracts at a discount, the clarity of bondholder claims, and the clarity of retiree benefit claims.
Wednesday, July 24, 2013
Eight More U.S. Cities on the Verge of Bankruptcy / Interest-Rates / US Debt
By: Money_Morning
Detroit is the largest municipal default in the history of the US. The city owes $9.2 billion in pensions, $1.9 billion to creditors and is $18.5 billion in debt.
The city's infrastructure is collapsing. Almost half of its streetlights are not working and aren't being repaired.
The average time for Detroit police to respond to an emergency is just under an hour. Crime has spiked. Many in the city have resorted to carrying firearms for their personal protection.
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Monday, July 22, 2013
Why Detroit’s Bankruptcy Should Concern You / Stock-Markets / US Debt
By: InvestmentContrarian
Sasha Cekerevac writes: Well, it’s official—as of last Thursday, the city of Detroit is bankrupt.
Detroit is a sad example of a city that was continually running a large budget deficit. But it grew into such a huge amount of government debt that the only way out was to file for bankruptcy and give investors pennies on the dollar.
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Monday, July 22, 2013
Detroit Bankruptcy Milestone in the Decay of American Capitalism / Politics / US Debt
By: Barry_Grey
The bankruptcy of Detroit, the former auto capital of the world, is a milestone in the historical decay of American capitalism. It is as well a new point of departure in the social counterrevolution being carried out by the ruling class to make working people pay for the failure of its system.
Kevyn Orr, the unelected financial tsar, Republican Governor Rick Snyder, Democratic Mayor David Bing and the establishment media all point to the horrific conditions in Detroit—78,000 abandoned buildings, non-functioning streetlights, antiquated and understaffed fire protection—not to indict the politicians and corporate powers who are responsible, but to justify the destruction of the living standards and essential public services of workers who bear no responsibility for the disastrous situation.
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Thursday, June 20, 2013
Detroit the Epicentre of the U.S. Death Spiral of Debt? / Interest-Rates / US Debt
By: InvestmentContrarian
George Leong writes: Debt is deadly, and it’s made even worse with rising interest rates that prevent you from eliminating the debt load. What happens with rising interest rates is that payments mostly go toward the interest and less to the principal. In fact, it’s what I call a death spiral of debt that worsens as rates move higher.
When individuals face excessive debt, often the solution is to pare down on spending and adhere to a strict debt repayment program.
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Thursday, May 23, 2013
Is the United States the Next Argentina? / Politics / US Debt
By: Money_Morning
Garrett Baldwin writes: Drive the streets of Buenos Aires, and you will see regal architecture that rivals wealthy European enclaves in Monaco or London.
And along tree-lined walkways, you will witness monuments that speak of the legacy of Argentina's finest moments.
But all of it is just a façade-a reminder of what used to be.
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Monday, May 13, 2013
U.S. Fed Warns of New Financial Bubble Crisis About to Burst / Stock-Markets / US Debt
By: Money_Morning
Ben Gersten writes: Before the housing market crash, economists warned that record low-interest and mortgage rates were fueling a housing bubble.
Unfortunately, those fears were both overlooked and underestimated.
Now, an advisory council to the U.S. Federal Reserve is warning the Fed that its record $85 billon-a-month stimulus and ultra-low interest rates are fueling new bubbles in student loans and farmland.
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Wednesday, May 01, 2013
The Real Reason U.S. Government Is Paying Down the National Debt / Interest-Rates / US Debt
By: Money_Morning
David Zeiler writes: After six years of non-stop deficit spending that has added $8.2 trillion to the national debt, the U.S. Treasury has announced that it expects to reduce the country's debt by $35 billion this quarter.
Given that national debt growth has rocketed past $16.7 trillion and is on track to exceed $17 trillion at some point in the fall, a $35 billion reduction is laughably tiny. It's just 0.02% of what we as a nation owe.
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Monday, April 29, 2013
Welcome to the Next Subprime Bubble / Interest-Rates / US Debt
By: Money_Morning
Greg Madison writes: Who could forget the subprime mortgage crisis of just a few years ago?
If there's one good thing that came out of that nightmare, it's that we - borrowers, lenders, financial institutions all - learned that securitizing bad loans and letting them spread like poison throughout the financial system was a bad thing.
We can look back at the subprime crisis with the wisdom of afterthought, and see all the mistakes laid bare.
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Saturday, April 13, 2013
All of a Sudden, 2013 Becomes Another Trillion-Dollar Deficit Year / Interest-Rates / US Debt
By: Profit_Confidential
In its monthly statement of receipts and outlays for the month, the Treasury Department reported that the U.S. government incurred a budget deficit of $107 billion for the month of March 2013. (Source: Department of the Treasury, April 10, 2013.) This monthly budget deficit was a result of the government spending $293 billion while only taking in $186 billion in March.
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Thursday, April 04, 2013
Is the Fed Creating an Auto Subprime Loan Bubble? / Interest-Rates / US Debt
By: Submissions
Terry Allen writes: Loans to subprime automobile borrowers are presently surging as a direct result of the current aggressive stimulus policies imposed by the US Federal Reserve. For example, deals instigated by car dealers soared by over 18% during 2012 involving over 6.5 million high risk borrowers. Reviews of court files by prominent market analysts have disclosed that auto subprime lenders are now one of the main reasons why so many Americans are forced to file for bankruptcy.
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Thursday, March 28, 2013
Why We Can't Avoid Ben Bernanke's "Monetary Cliff" / Interest-Rates / US Debt
By: Money_Morning
Martin Hutchinson writes: When it comes to the Federal Reserve, an accurate "reading of the tea leaves" means paying attention to all of the fine print.
And while the markets cheered last week's FOMC meeting with yet another rally, a deeper look at Ben Bernanke's press conference left me with a slightly different take.
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Saturday, March 16, 2013
U.S. Debt-to-GDP Ratio This Year to Surpass Greece’s 2009 “Danger” Level / Economics / US Debt
By: Profit_Confidential
The U.S. Department of the Treasury reported that the U.S. government incurred a deficit of $204 billion for the month of February 2013. So far, we are into the first five months of the government’s fiscal year (started October 1, 2012), and the U.S. government fiscal deficit has already grown by $494 billion. (Source: U.S. Department of the Treasury, March 13, 2013.)
Wednesday, February 13, 2013
The Great Lie That Will Bankrupt America / Interest-Rates / US Debt
By: DailyWealth
Porter Stansberry writes: The world's markets are beginning to go haywire.
The world's money system – the scales upon which the world's market functions – is being deliberately destroyed. And so, the monetary signals that guide the markets – which are supposed to represent the supply and demand decisions of billions of people – have become distorted.
Thursday, February 07, 2013
Student Loans Ticking Bomb; Why It’s Such a Big Problem / Interest-Rates / US Debt
By: Profit_Confidential
George Leong writes: he threat of another credit rating downgrade for the U.S. national debt is increasing. But it’s not just due to the government’s inability to control its deficit; it’s about items not considered in budget talks. Student debt, for example, which has become increasingly guaranteed by the government, currently stands near $1.0 trillion.
And consumer debt is increasing, too. In third quarter 2012, non-real estate household debt in the U.S. economy increased 2.3% to $2.7 trillion, of which $42.0 billion was student loan debt. (Source: Federal Reserve Bank of New York, November 27, 2012.)
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Wednesday, February 06, 2013
The United States of Debt Addiction / Interest-Rates / US Debt
By: GoldSilver
mybudget360.com writes: 16 point 7 trillion dollars. That is our current national debt. 12 point 8 trillion dollars. That is the amount households carry in mortgage and consumer debt. We are now addicted to debt to lubricate the wheels of our financial system. There is nothing wrong with debt per se, but it is safe to say that too much debt relative to how much revenue is being produced is a sign of economic problems. At the core of our current financial mess is how we use debt as a parachute for any problem. We’ve been masking the shrinking of the middle class by allowing households to take on too much debt for a couple of decades. The results were not positive. Too this degree, we have now created a massive moral hazard economy where savings are punished into oblivion. There is very little incentive to put your money in a bank account yielding zero percent interest when real inflation is eating away at your money like a hungry wolf. So what do people do? Well many simply cannot save and therefore choose to go into debt to finance cars, housing, and education with very little down. Where does this debt addiction lead us?
Saturday, February 02, 2013
US Private-Sector Debt Deleveraging: Where Are We? / Interest-Rates / US Debt
By: John_Mauldin
I was just in Greece with Christian Menegatti, and we had a good conversation about the piece he has sent along as today’s OTB. The case Christian and his coauthor David Nowakowski lay out regarding an incipient turnaround in US deleveraging (and therefore in economic growth prospects) is in some ways truly outside the box – I certainly wouldn’t call it the consensus view at this point. But they make the argument about as strongly as it can be made; so, if nothing else, they give us a solid piece of work off of which we can bounce counterarguments.
For new readers: I often feature pieces in Outside the Box that make us think and that don’t reflect my personal bias or opinion. The point is that, if you only read what you agree with, you will miss the important changes and associated opportunities when they happen. And note that this piece is from Christian, who is head of research at Roubini Global Economics – not exactly a hotbed of bullishness. (By the way, Nouriel will be at my conference this year, more on which in a few weeks.)
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Thursday, January 31, 2013
The Trillion Dollar Coin, Anything Is Better Than Taxes / Politics / US Debt
By: Joseph_T_Salerno
As outlandish as the idea of the $1 trillion platinum coin at first appears, it gives us a glimpse of a monetary arrangement that, although far from ideal, is superior to the current system. Now that the Obama Treasury has definitely ruled out the scheme to mint the coin to circumvent the gimmicky debt ceiling, it is instructive to take a closer look at the reason why it did so and to articulate the lessons that can be learned from the episode.
To begin with, the scheme has ramifications far beyond a one-off political trick to avoid the debt ceiling. Indeed, it presented an implicit challenge to the much vaunted and sacrosanct "independence" of the Fed. That is why, from the very beginning, Fed worshippers in the establishment media – left, right and center – mercilessly mocked the idea and denigrated its supporters as grossly ignorant or irresponsible, although they dared not spell out its full policy implications.
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