Looming US Debt Crisis

Fortune + Morgan Stanley + etc have started talking about the stage being set for a US debt crisis.

FYG – that debt crisis won’t start at the Federal level. It will be the biggest and last domino in a series of state defaults. All that needs to happen is a failed bond auction for a troubled state like Illinois or California. The Feds/Treasury come to the rescue and buy up the no-demand state bonds.

But guess what, the rest of the world will see this, and start unloading US treasuries. And that stokes the flame of the national debt crisis. Here is what that municipal bond crisis looks like on an economic level:

http://www.hiddenlevers.com/hl/u?af3ywu

Economics Jai Ho!

Published by

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s