The US government defaults on its debt (before the Summer 2009)

November 12 2008 by The Systemic Analyst.

The GlobalEurope Anticipation Bulletin (GEAB), produced by the influential think tank LEAP/Europe 2020, predicts that the US Government will default on its debt anytime before next summer. The analysis presented in their recent issue here suggests that the default will occur due to the following five factors:

“• The recent upward trend of the US Dollar is a direct and temporary consequence of the collapse of stock markets

• Thanks to its recent «political baptism», the Euro becomes a credible «safe haven» value and therefore provides a «crisis» alternative to the US dollar

• The US public debt is now swelling uncontrollably

• The ongoing collapse of US real economy prevents from finding an alternative solution to the country’s defaulting

• «Strong inflation or hyper-inflation in the US in 2009?», that is the only question.”

The outline presented in the GEAB generally corresponds to what we have been saying for a while with regard to the future of the US (and all the implications for those countries tied to it). The ‘global financial meltdown’ that is unfolding now is far from reaching its climax, one reason being the impending derivatives bubble that must burst and destroy the false economy based on speculation in order to start re-building the global economy. Those who expect any ‘meaningful results’ from the upcoming G20 meeting in Washington this week will be disappointed. To put it simply, if the US creditors wait a bit longer they would get a better deal. The important question that GEAB raises above regarding the US should be considered in the following manner: will the impending (hyper-) inflation be dealt with through internal implosion (with all its ramifications for the social order in that country) or a World War as has occurred many times in the past?

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