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What Life in America Will Look Like in the Aftermath of the American Bankruptcy
The man still in control?
The sunset of America
On June 10th, 2008 Chairman of the Federal Reserve System Ben Bernanke stated the following:
"The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."
The comment was made to reporters in response to worries that the economy was in serious trouble given the Fannie Mae and Freddie Mac situations in the housing market and that many believed the housing bubble was about to burst. Bernanke insisted that the economy was strong and there were no worries at the time.
Only three months later America experienced the worst meltdown in the economy since the Great Depression in the late 20's. The housing market crashed to the ground. Many lost their homes across the country in the wake of the sub-prime lending fiasco when the banks made borrowing to buy a house incredibly easy and approved loans to people who only put 3% down in the transaction.
Now, in late 2013 and after the recent government shutdown, debt ceiling and fiscal cliff crises that we have experienced we have still not recovered from that day in October 2008 when the housing market crashed. Did Bernanke truly believe that the economy was in good shape and really did not anticipate what was to come only a few months later, or did he know the true state of the housing market and that it could only crash in the not too distant future? Either he truly misinterpreted the economic data he was privy to and did not see that crash coming, or, he was less than honest with the American people and purposely misled them as to what he knew was coming? Either he was incompetent or he was lying. Either he should be fired or he should be cited on contempt charges for misleading the American people.
And now five years later, are we to believe what he is saying about the current state of affairs of the American economy in general?
The American economy is in serious trouble. The government cannot pay its bills and the worst is yet to come. And Bernanke knows that even though he puts up a brave front to the public.
Many experts are now predicting that the US government will default on its loans to creditors. China is looking for a way and a time to dump more than $ 1.2 trillion in Treasury Bonds that it currently holds. It has put the US on notice that it will no longer accept dollars in settlement of debts owed to it, and has made a public statement that it wants the international community to move away from US dollars and into gold as the currency of choice on international markets.
If the experts are correct it is only a matter of time before the US defaults on its loans and then turns a chapter in its history. What will America post-default look like and what will life be like for the citizens of this new country?
Here are some scenarios that may arise:
- credit will become impossible to obtain at anything less than usurious rates of lending,
- corporations in the airline, automotive, and manufacturing sectors will become insolvent themselves as economic activity decreases significantly and demand for their products decreases
- massive layoffs in the major industries will occur as the economy contracts
- foreclosures in the housing market will hit all time highs
- demand for consumer durables like cars and major appliances will evaporate
- savings accounts of individuals will be cleaned out as they try to survive on reduced or non-existent incomes
- bank profits will fall and banks will fail as the malaise spreads
- the Federal Reserve will try to solve the problem as they have in past episodes like this by printing more and more money to throw at the problem, which will make things even worse
- money as we know it will become near worthless as it loses any semblance of value
- minerals such as gold, silver and platinum will be hoarded as people realize they are the only true store of value
- the rise of the barter and underground economy will increase dramatically as people try to survive in a world that values fiat currency less and less
- the dollar will lose all purchasing power
- inflation will take hold and expand to hyperinflation wherein the world as we know it will cease to exist
- the price of gold will rise to what many believe will be $ 7,000 to $ 8,000 per ounce
- crime will run rampant across the cities as people lose their homes, find they cannot feed their families and cannot fill their gas tanks will fuel
- more and longer government shutdowns will be the norm as the government tries to cope with everything going on around it
- government default in all payments they currently make to salaried staff, pensioners and even the army
- the growth of soup kitchens not seen since the Great Depression
- a have nation will be turned into a have not nation
- civil disobedience and unrest will become the norm as society begins to unravel
- a widening gap between the rich and the poor in society leading to further alienation of the classes
- a disappearance of the Middle Class
- civil and urban blight will result as maintenance of properties is ignored
- deaths in the streets and further civil disobedience
- the imposition of martial law by the government who is paying only the salaries of the National Guard, the Militia and the remaining law enforcement officials still receiving a paycheck
- the imposition of the Patriots Act and its implications against the citizens themselves.
And as for the government officials who were complicit in the creation of the environment leading to this sorry state of affairs? They hunker down and protect their families from the unemployed looters and vagrants who wonder the streets looking for something to eat.
And finally, the end of America as we know it.
And finally, the Phoenix will rise from the ashes of this once great nation.
America the bankrupt?
Do you agree with the writer as to to fate of America?
Hey Mister, can you spare $17 Trillion?