How Big is Big?

Again the vegetation opens up and we get a chance to look out to the horizon.  The views are becoming more spectacular the higher we climb.  Our ship continues to grow smaller and smaller, it looks like from here that it is sitting on the sand, it looks like the water has gone out of the harbour. 

A lot of animals live on this island and every day that goes by we are seeing more and more of them.

Fun and Scary Facts about the US Debt.

• Under President Obama: The debt started at $9.986 trillion and escalated to $13.7 trillion, a 38 percent increase over two years.

• According to the 2008 Financial Report of the United States Government, an official US government report, the total liabilities of the United States government, including future Social Security and Medicare payments that the U.S. government is already committed to pay out,

                                       now exceed $65 TRILLION.

• Total US government debt as a percentage of GDP is 94 percent in 2010.

The US uses a different method of accounting than we are use to, they don't use GAAP (Generally accepted accounting Principles).  Consequently, any money coming in, like social security payments, are treated like a revenue and not a future debt obligation.

If we were to add up all the future debt obligations and the future revenues and price them in today’s dollars (ie Net Present Value) the

                      “US Government would owe $202 Trillion!!!!”

• A trillion $10 bills, if they were taped end to end, would wrap around the globe more than 380 times.  That amount of money would still not be enough to pay off the U.S. national debt.
• In 2010, the U.S. government will issue almost as much new debt as the rest of the governments of the world combined.
• The U.S. government has to borrow 41 cents of every dollar that it currently spends

The U.S. government has such a voracious appetite for debt that the rest of the world simply doesn’t have enough money to lend to them.

So now the Federal Reserve is buying most U.S. debt, and the only reason it can do that is because it can create money to lend out of thin air— at the mint’s printing presses!

This is what a currency crisis looks like!!!!! 

·        The more the US prints dollars out of thin air, the faster each existing dollar looses value. 

·        The faster the dollar looses value, the less anyone wants to hold or lend dollars to the US. 

·        The less they want to lend, the more the US has to print to buy its own debt. (now
            cycle back to the top) 

And the cycle keep going on and on until the Dollar is worth nothing or they default on their debt (tell people that they cant pay back the money that was lent them).

In times of fear and instibility, people have run to the $US for safety, this has changed.