It’s official: the United States will default. In a year’s time, our debt will be $3.5 trillion. Porter Stansberry says, according to a formula created by Alan Greenspan and some other guy:
“If you can’t pay off all of your foreign debts in the next 12 months, you’re a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured. So how does America rank on the Greenspan-Guidotti scale? It’s a guaranteed default.”
Even if we pooled the entire savings of every American we would only come up with $600 billion. Add to that the US gold, oil and foreign currency reserves totaling about $500 billion, and we’re still not even halfway there.
So what will the government do? Fire up the presses to the tune of $2 trillion. This will steadily devalue the dollar until foreign investors decide the dollar isn’t coming back. Then it will be a mad dash to unload the dollar before everybody else, while it still has some value.
On an episode of The Sopranos, one guy knew another guy was going to get whacked so he borrowed money from him. Maybe I should borrow some money…