Will the Current Debt Crisis Change the American Way of Life for Ever?

The radical change that we are witnessing through oil price increases, rising food inflation, skyrocketing prices of commodities such as aluminum, steel, gold and silver did not come as a surprise. Now, many fear another crisis is on the verge of hitting the US economy and this time it will spread its wings across the globe. The impact could be of much higher magnitude than the recent recession.

And the government is the key culprit behind this situation. If you take a closer look at what the government has been doing for so long, you will get a clear vision of the situation that we are headed into next. It all started when government started transferring the Wall street debt to US treasuries by means of huge rounds of quantitative easing, which are never a good way to deal with such situations as it has a long term drag on the system.

If you have not realized, the crisis is already visible in various parts of the world and now people are realizing that their pension money, healthcare, and all such contracts are actually at risk as the government goes broke.

Some of you may not completely agree with me here, and some might not even believe that any of this could happen. But ask yourself, did you ever foresee the collapse of mortgage banking giants Fannie Mae and Freddie Mac.

The ongoing debt crisis in America will shake the balance of power around the world, and that will eventually change our way of life. I fear that this crisis will shake the very foundation of America. It will affect your savings, investments, how you plan to retire, your kids educations and so much more.

Anyone with sound knowledge of finance would agree with me that debts don’t just disappear, and that bailouts have long term consequences that are hard to tackle. I am sure that most of the people won’t know what to do when prices of necessary commodities skyrocket, big and small banks start failing again, and the government lays strict barriers for moving investments abroad.

We all know what the importance of dollar as a currency is globally. Now that economists from around the globe are expressing concerns for a possible dollar collapse, which may soon start as talks about removing dollar from its current role as the global reserve currency are already heating up. Such changes do happen, and this could degrade American way of life to such an extent that lifestyle in third world countries will be considered much better. This is not something that will take decades to happen. The monetary system in US is facing the biggest crisis ever, and they have already borrowed so much that the day is not far when it will not be possible to repay the interest. Forget the actual money!

So you need some facts?

Income tax collection is around 900 billion annually. Corporate tax stands around another 200 billion. Current annual deficit is around 1.3 trillion. If this continues for few more years, Social Security will post heavy deficits. I wonder if there will be any thing such as social security a decade later.

If all Americans were taxed 100%, even then the deficit cannot be balanced. That’s how serious it is at present. Why do you think gold is rising like crazy? Isn’t that an indication that a major collapse is coming?

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