Forgiving American Debt? (March 3, 2008)
America will never repay its foreign Debt.
When you borrow ten thousand dollars ($10,000.00), you lose sleep worrying about repaying it. When you borrow ten million dollars ($10,000,000.00), your banker loses sleep worrying about you repaying it. When you borrow almost ten Trillion dollars ($10,000,000,000,000.00), your banker should never get a restful night’s sleep.
The day will come when one foreign country quietly reduces its purchases of Treasury instruments. [See the e-ssay dated March 21, 2005 entitled “America The Bankrupt (Jan. 17) Revisited”]. “Sovereign Wealth Funds” created by countries to invest substantial sums of money in an enterprise are moving into the U.S. equities market. Taking by investment is much easier and more productive that taking by invasion. Foreign investment can lead to an intertwined and interdependent economy. [See the e-ssay dated March 13, 2006 entitled “Dubai Port Worlds: The Ship Storm”]. Are the funds being invested to exploit an economic opportunity or to gain a political advantage? This issue will make the front pages in the next few years.
America is the Bear Stearns of the world. America’s failure to repay its debts will also attract some passing attention in the next few years.
Bumper stickers of the week:
Forgive us our debts as we have forgiven those who have been indebted to us.
Too intertwined to fail?