Bankruptcy of the U.S. now certain

[redneckmedic]

 

[dross]

I've always thought that, no matter how much our national debt is, it is only relevant when indexed against our GDP....much like Dross explained. If that's the case, we are nowhere near "bankruptcy." GDP could potentially fall some in the future, with harmful economic policies and government overspending. But the fact remains that the US is the most powerful country in the world, by far. In fact, the GDP of some STATES is greater than many other NATIONS. In addition, we are, by far, the most powerful country militarily. No one is going to come to "collect" anything from us, regardless of what the economy does.

Here is a chart of our national debt, indexed against GDP, since 1940.

I'm not sure exactly what the national debt means to the average working American. I do think it's silly to think that some nation is going to invade us to collect debt.

The problem with this graph is that you only see the percentage, you don't see the size of the debt compared with the size of the GDP. It would be more useful if there were two lines - then, for instance, you could tell that the percentage declined because the GDP rose, or because the debt was reduced.

In WWII, it's easy to surmise that the debt went way up, and then the decline in the 50s and 60s most likely reflects economic growth. Some of the other changes are a little harder to figure, although since debt continued to grow I guess most likely this graph probably reveals the state of the GDP more than the amount of debt.

 

[CarmelHP]

This!

Gold and Silver will retain some long term value because they are precious metals.

But in a short term crash of a economy, they won't be all that valuable as short term currency. There won't be vendors and retailers that are gonna suddenly convert over to gold. And how do they make change? Bartering for needed goods, like food, clothing, ammunition, medicine, etc. will be what would dominate the short term.


Now, longer term, after any sort of melt down, the gold and silver would be valuable, as they can be converted into any new form of currency that would come about.

Throughout all recorded history gold and silver have retained value and have been fallback currencies during times of breakdown, the Civil War South, Germany during the last days of World War I and II, etc.

 

[rich8483]

the immediate personal problem i see, is that i have a chunk of money in a savings acount. if i leave it in there, inflation will cause it to be worthless. and the money i have worked hard to save up will become nothing. so i need to invest it in gold/silver or realestate. problem is, i find it hard to bring myself to do that. idk why, buy i like to see the cash there and in the long run taht will hurt me.

 

[redneckmedic]

The problem with removing your moneys is that if you are doing it so is everyone else this will equal a total collapse and complete chaos in the streets for the little cast that is there.

 

[jedi]

the immediate personal problem i see, is that i have a chunk of money in a savings acount. if i leave it in there, inflation will cause it to be worthless. and the money i have worked hard to save up will become nothing. so i need to invest it in gold/silver or realestate. problem is, i find it hard to bring myself to do that. idk why, buy i like to see the cash there and in the long run taht will hurt me.

GOLD/SILVER/Other Precious metals are only good for retaining your overall wealth since they are not tied to any political system imposed by governments and they are a finite source. (ie. There is only so much gold in the world). Now that being said gold/silver/etc you should only consider once getting once you have your other basic needs stockpiled. Food, Water, Guns, Ammo, Clothing, Medicine, etc.. In essence unless you are super rich and have stockpiled all these other things don't bother with getting gold/silver.

In a collapse (ie russia, argentina) people had a hard time getting bread and milk and thus were starving. The paper money was worthless so you needed to trade or steal or resort to violence.

As for those thinking of trading with ammo. DO NOT! Why would you want to give someone else ammo? Think about it. Today you give Joe ammo in exchange for eggs. A week from now Joe has depleted all his food, his chicken was stolen, and his family is hungry. Yet he has ammo and a gun. Guess where he will be going? At first person the local area to steal and/or kill for food. Later on you are his next target. I don't care if Joe was you friend or not. In a live or die, my children are hungry situation EVERYONE eventual resorts back to primal instincts and will kill for food!

YOU TOO ARE NOT IMMUNE TO THIS. Mankind at it's core is a savage beast and give the tools and desperation will kill for food even the hand that once feed it. So no AMMO can not be used as food.

In fact long term SHTF you need to find others like you (preppers) and be prepared to defend and kill what you have and grown your community. Because on the other side of good/evil there is another group that is also "preparing" to take your stuff away. This is how mankind has always acted even before civilizations came to be.

1 set of cavemen and more food and skin blankets than another set. So the other set gathered more cavemen and attacked the first set to take what they had. That is what will happen in a SHTF. It is in our nature to do just that and the sooner you realize that the sooner you can begin to wrap your mind around the fact that it's going to be ugly and barbaric.

 

[bigiron]

anyone else investing in brass? i have alot. and when the SHTF believe me, i will go from good guy to bad guy in a hurry. sorry, but its the truth. GOD BLESS AMERICA!!!!!

 

[DoubleTap Tactical]

The new gold will be beans and bullets! It's only a matter of time.

 

[jblomenberg16]

A couple of thoughts for open discussion.


1) Trade Deficit is a real issue, but has nothing at all to do with our actual national debt. It is part of our GDP calculation, which are two completely different items.

2) A devalued dollar is not good for a lot of reasons, but actually helps narrow the trade deficite. One of the reasons the trade defecit has grown is that the purchasing power of the dollar on the world market as been very strong. As it loses relative value, it can't purchase as much in foreign goods, making domestic good more "affordable."

3) A devalued dollar is again of concern, but we need to look at it also in terms of domestic inflation. In the last decade inflation has been in the 2-3% range. Hardly of concern, and actually in the healthy range. And, in 2009 average inflation will likely be very close to zero, or maybe even negative, which means deflation. So in essence, despite the poor economy world wide, the dollar still buys roughly the same basket of goods as it did in 2008, if not slightly more.

I realize that means nothing to those who are unemployed and don't have those dollars to spend, but it also means that despite the weakening of the dollar relative to other currencies, it hasn't siginificatly affected US consumer prices (yet).

When people here devalued dollar they often confuse that with inflation. This can happen, but has not happened to this point. A devalued dollar just means it is worth less relative to other currencies.


4) The federal debt is certainly a very big deal, but needs to be looked at in context. While not an apples to apples comparison, think about these scenarios:

Many very healthy compainies are much more highly leveraged than our country, having a much larger debt to equity ratio, short term debt to cash ratio, etc.

How many of us on this message board have enough cash reserves to cover all of our short term loans? I.e. if you had to, could you pay off everything but your mortgage within a year and keep the lights on? Many of us do, and those that do probably don't feel as exposed as those that don't.

Niether of those examples make the current federal budget deficit an national debt right or wrong, but do put it into context.

 

[mettle]

"All of this is going to lead to a severe devaluation of the U.S. dollar, which I expect to happen within 18 months.If you haven't taken steps to protect yourself from the coming devaluation – like owning gold and silver bullion, foreign real estate, and farmland – make sure you do it soon. The dollar rout is coming."

What about that foreign real estate & farmland.....

Try pandering 'japanese ocean front' property to a family of 5 who haven't ate in 2 days...

 

[infidel]

and when the SHTF believe me, i will go from good guy to bad guy in a hurry. sorry, but its the truth.

WTF?!

 

[Agent 007]

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