@spasticgramps
I read the whole transcript and I'm pretty sure he didn't make a forecast as to when the US would reach the tipping point of proportion of revenue devoted to debt service. That's how I found out a Rothschild was in the audience. One of the questions at the end from the audience was from the Rothschild family member.
Whether you agree or not with Dr Fergusson's points or not I think when you have the movers and shakers like that listening to you, your words have the potential to become self fulfilling prophecies.
Such a forecast would be pretty shaky though. The 20% number he proposed was tentative. As the world's reserve currency, largest military superpower, and largest economy we probably deserve the benefit of a slightly higher proportion than would say Portugal. Plus any such forecast would depend on interest rates and political developments. Although it's not that hard to forecast politics I suppose. Just bet on the most spineless thing that will get an incumbent re-elected and that's what will happen (cough...Medicare prescription drug benefit...cough). And it's a pretty good bet that interest rates are going nowhere but up.
He made several points worth pondering. One was that contrary to popular notions empires don't gradually decline, they fall off a cliff. For example the British empire went from being a world superpower to a second tier country in the space of about 10 or 20 years.
Another leading indicator he pointed to was military spending. Obviously it takes the threat of extreme violence to maintain an empire and in that regards the United States is second to none. But if budgetary restraints curtail the means to maintain that threat the empire is no longer credible and other countries will be emboldened.
I think that when you looked at what happened in the US treasury market after the Bush tax cuts were extended in congress you get a taste of what's to come vis a vis your comments about bond vigilantes. But on the other hand the Federal reserve has unlimited firepower on the buy side. It promises to be an epic battle.
I think increasingly financial markets will demand higher interest rates for US treasuries. That will accelerate us down the path towards the 20% of revenue devoted to debt service (or whatever the magic number may be). I am not a doom and gloomer however. I think it will require lower standards of living, cuts to social security, medicare, and defense spending but I think we can get back on course if we can avoid anymore crises. On the other hand I think one more war in the middle east would finish us.
My personal forecast is that when the GDP of China exceeds that of the US in 10 or 20 years, we are going to start to see cracks. It will take a while but they will have the tax base for a military buildup. They are building an aircraft carrier actually. This should worry people at least as much outsourcing because this is how you project power in the world. Hitler might have actually been a real threat if he had had a Navy. Might not be such a bad thing though to have someone else police the middle east for a change. Since their economy is as dependent on oil as ours they ought to have a nuclear powered aircraft carrier battle group patrolling the persian gulf once in a while. Share the burden.
I read the whole transcript and I'm pretty sure he didn't make a forecast as to when the US would reach the tipping point of proportion of revenue devoted to debt service. That's how I found out a Rothschild was in the audience. One of the questions at the end from the audience was from the Rothschild family member.
Whether you agree or not with Dr Fergusson's points or not I think when you have the movers and shakers like that listening to you, your words have the potential to become self fulfilling prophecies.
Such a forecast would be pretty shaky though. The 20% number he proposed was tentative. As the world's reserve currency, largest military superpower, and largest economy we probably deserve the benefit of a slightly higher proportion than would say Portugal. Plus any such forecast would depend on interest rates and political developments. Although it's not that hard to forecast politics I suppose. Just bet on the most spineless thing that will get an incumbent re-elected and that's what will happen (cough...Medicare prescription drug benefit...cough). And it's a pretty good bet that interest rates are going nowhere but up.
He made several points worth pondering. One was that contrary to popular notions empires don't gradually decline, they fall off a cliff. For example the British empire went from being a world superpower to a second tier country in the space of about 10 or 20 years.
Another leading indicator he pointed to was military spending. Obviously it takes the threat of extreme violence to maintain an empire and in that regards the United States is second to none. But if budgetary restraints curtail the means to maintain that threat the empire is no longer credible and other countries will be emboldened.
I think that when you looked at what happened in the US treasury market after the Bush tax cuts were extended in congress you get a taste of what's to come vis a vis your comments about bond vigilantes. But on the other hand the Federal reserve has unlimited firepower on the buy side. It promises to be an epic battle.
I think increasingly financial markets will demand higher interest rates for US treasuries. That will accelerate us down the path towards the 20% of revenue devoted to debt service (or whatever the magic number may be). I am not a doom and gloomer however. I think it will require lower standards of living, cuts to social security, medicare, and defense spending but I think we can get back on course if we can avoid anymore crises. On the other hand I think one more war in the middle east would finish us.
My personal forecast is that when the GDP of China exceeds that of the US in 10 or 20 years, we are going to start to see cracks. It will take a while but they will have the tax base for a military buildup. They are building an aircraft carrier actually. This should worry people at least as much outsourcing because this is how you project power in the world. Hitler might have actually been a real threat if he had had a Navy. Might not be such a bad thing though to have someone else police the middle east for a change. Since their economy is as dependent on oil as ours they ought to have a nuclear powered aircraft carrier battle group patrolling the persian gulf once in a while. Share the burden.
