At present there appears to be four problems-- aside from the fiscal cliff-- that could throw the U.S. economy into recession in 2013.
These are international problems that include:
- Brewing trouble in Japan: Japan faces an election next month. More importantly, its government debt is currently 230% of GDP, with that ratio rising by about 10% a year. The current government has increased sales tax in 2014, which may cause a recession and will likely push its debt to GDP ratio even higher.
The problem is no country has ever survived a debt/GDP ratio above about 250% without defaulting. Britain did succeed with this in 1815 and 1945, but on the second occasion it relied on exchange controls, inflation, and dozy domestic investors, while on the first occasion it had a government under Lord Liverpool far more capable than anything we have seen in the last 185 years.
The point is, if Japan gets a weak coalition after its election, the market may panic and cause a Japanese government default.
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Hold on to your hats, folks. Sounds like bad economic times ahead, no matter which course we take, according to Mr. Hutchinson. Thanks to Barry, confiscator-in-chief.
Remember that the japanese debt is paid back into the hands of japanese to invest as 100% is owned by japanese that is how they have survived for over ten years of low inflation. WHEREAS USA PAYS OUT 43% TO NON RESIDENTS WHO MAY OR MAY NOT REINVEST INTO USA . JAPAN INVESTS HEAVILY AS AT OVER 1% THEY GAIN EXCELLENT RETURN COMPARED TO RATES IN JAPAN EVAN THOUGH THE USA CONTINUES TO BE DEVALUED WITH ALL THE MONEY SUPPLY EXPLOSIVE GROWTH IN RECENT YEARS. SOON MANY FOREIGN INVESTORS WILL REFOCUS THEIR DEMANDS AND SHIFT TO HIGHER PAID ISSUES AND PRECIOUS METALS AND AWAY FROM THE USA$ AND EURO.
Many thanks for your clear and concise analysis. I agree with everything you write. When will politicians stop playing games, forget their egos, and look at long term planning (rather than quick fix policies). I'm glad there are people like you out there to focus attention on , where we are: what we have to do: and "sorry guys" this is the way it is.
Keep writing your articles, it gives hope to many of us who would like to see a more stable world
I guess you have not read the constitution, A person can only be elected to 2 terms.
The Constitution limits the president to 2 terms unless he changes the Constitution or ignores it.
….and the constitution requires the Congress to declare war; and the constitution (section 8, paragraph 4) give power of "uniform Rule of Naturalization just to name 2 constitutional transgressions.
Hey Robert A. have you ever come across someone who's not on the same page as everyone else? Try rereading the first sentence of the First article of this webpage then stick that in your consttution twice.
Strong economy with huge Gold and Oil reserves, Government Debt gone in five years,strongest Banking system in the world,Universal Health Care.??
Where could that be??
Did i mention 2% of world;s population, 20% of world;s fresh water.
Totally self sufficient for food, energy, and water, only country in the world that is in this situation.
Tighten up those borders, not keeping us out, keeping you guys in.
HMH; Let me guess…. Mexico?
Heh.. Gov. debt gone in five years?? You will not be able to pay your debt until the end of the world! its going to be 23 T in 2016
You have dark years in front of you , sit and see..
Dont speak like librats..
I need to send my $5.00 a month to you digitally. I'm living in Asia now. I want to continue to receive the Private Briefing.
How do I pay this bill? I'll be happy to pay six months at a time. OK?
David Thomas