10 Signs That America Is On The Verge Of A Horrible Municipal Debt Crisis

Is America on the verge of a horrible municipal debt crisis?  Unfortunately, the answer is yes.  From coast to coast there are an increasing number of cities, towns and counties that are rapidly going broke.  Financial analyst Meredith Whitney took a lot of heat when her prediction of a municipal bond crash in 2011 did not happen, but she was not fundamentally wrong in her analysis.  A horrifying municipal debt crisis is starting to unfold right in front of our eyes.  It just did not happen as soon as she thought that it would.  When most Americans think of our “debt problem”, they think of the federal government.  But the truth is that we have hundreds and hundreds of smaller “debt problems” all across the country.  In 2012, cities such as Stockton, California and Harrisburg, Pennsylvania have already defaulted and a whole bunch of other cities and towns are headed down the exact same path.  Once we see the first major wave of municipal defaults, creditors will become much tighter with their money and that will cause even more municipalities to get into financial trouble.  This crisis could start spinning out of control at any time. (Read More...)

The United States Of Europe: A Proposed “Economic Government” Would Integrate Europe To A Degree Not Seen Since The Roman Empire

Are you ready for “The United States Of Europe”?  The integration of Europe is about to go to another level.  As the European debt crisis deepens, there are cries all over the EU for full economic integration in Europe.  On Wednesday, French President Nicolas Sarkozy and German Chancellor Angela Merkel sent a letter to European Council President Herman Van Rompuy which stated that they want a new “economic government” for Europe to be formed.  According to the letter, Sarkozy and Merkel want the leaders of the eurozone countries to “elect” a president for the new “economic government”.  The idea would be that the president would hold twice-yearly summits to address the debt problems that Europe is facing right now.  But many pro-EU critics are already howling that Sarkozy and Merkel have not gone nearly far enough.  A whole lot of “experts” in Europe are proclaiming that without full economic integration and the creation of “eurobonds”, Europe is doomed.  Jennifer McKeown, an economist for Capital Economics, put it this way when asked what would happen if eurobonds are not created fairly soon: “The likely outcome is the eurozone ceases to exist”. (Read More...)

Now That U.S. Government Debt Has Been Downgraded, The Rest Of The World Is Calling Even Louder For A New Global Currency

For decades, the U.S. economy was so dominant compared to the rest of the world that nobody really even challenged the status of the U.S. dollar as the reserve currency of the world.  But now that U.S. government debt has been downgraded, the U.S. dollar is showing significant weakness and the U.S. economy continues to crumble, the rest of the world is questioning whether the U.S. dollar should be allowed to continue to have such a privileged position in the global marketplace.  Politicians all over the world are now openly calling for a new global currency to replace the U.S. dollar in international trade.  In fact, we are already seeing a shift away from the dollar in many areas of the globe.  A decade ago, the U.S. dollar made up approximately 70% of all foreign exchange reserves around the world.  Today, that figure is down to about 60%, and it continues to fall.  As the debt problems of the U.S. government get even deeper, and as the U.S. dollar loses even more strength, the calls for a truly global currency are going to grow even louder. (Read More...)

Our Politicians Are Selling Off Pieces Of America To Foreign Investors – And Goldman Sachs Is Helping Them Do It

All over the United States, politicians are selling off key pieces of infrastructure to foreign investors and big Wall Street banks like Goldman Sachs are helping them do it.  State and local governments across the country that are drowning in debt and that are desperate for cash are increasingly turning to the “privatization” of public assets as the solution to their problems.  Pieces of infrastructure that taxpayers have already paid for such as highways, water treatment plants, libraries, parking meters, airports and power plants are being auctioned off to the highest bidder.  Most of the time what happens is that the state or local government receives a huge lump sum of cash up front for a long-term lease (usually 75 years or longer) and the foreign investors come in and soak as much revenue out of the piece of infrastructure that they possibly can.  The losers in these deals are almost always the taxpayers.  Pieces of America are literally being auctioned off just to help state and local governments minimize their debt problems for a year or two, but the consequences of these deals will be felt for decades. (Read More...)

Debt Management: Is There Any Hope For America’s Debt Problem?

Wouldn’t it be nice if our politicians in Washington D.C. simply decided that we are not going to spend more money then we bring in?  That would just seem to be common sense.  After all, what do most of those big time debt management seminars teach?  Most of the time they tell families with debt problems that the very first thing that they need to do is to stop spending so much darn money.  Well, with the U.S. government things are just not that simple.  In fact, even the most “crazy” budget proposals floating around Congress right now would not balance the federal budget until 20 years from now.  The truth is that there does not seem to be much hope for America’s debt problem.  In fact, it appears to be inevitable that it will continue to get worse long into the future. (Read More...)