US Economy: The US Dollar Printing Presses Are Running Out of Ink - by RM

"stop the dollar printing press"

For someone to get a n immediate birdseye view as to the status of the US economy, the usdebtclock.org shows that the official US deficit of US 17 trillion dollar now breaks  down to a $753,000 debt share for each American citizen.

But is that the whole deficit picture?

When US politicians speak about the US debt they usually only refer to this 17 plus trillion US deficit.  They hardly ever mention that this is only the tip of the iceberg. For on top of that 17 trillion dollar deficit, the US also has a 17 trillion liability for social security, 22 trillion in prescription drug liability, 88 trillion in medicare liability, and 127 trillion in unfunded liabilities, including, but not limited to such items as the quantitative easing program.

The US debt is in fact now more than the debt of all the 27 EU nations combined.

This means that if you add to the US deficit all the other liabilities and financial obligations it would equates to every US citizen carrying a  $ 1,107.000 of that debt burden.

As to the US's ability to pay off this mounting debt and interest on the debt, which is mainly money borrowed from abroad,  the US Fed’s answer so far has been to print more dollars to pay the bills.

So far this scheme has worked relatively smooth, mainly because the dollar became the world’s reserve currency after the second world war and as a result most international trade is now conducted in dollars. This has also provided the US with the ability to call the shots ( manipulate) the figures when it concerns the actual value of the dollar in comparison to other currencies.
 
But printing dollars can not go on forever and will not only devalue it's value, but eventually also dilute the total money supply of the US. In essence

"Pay back time", where the US has to cough up the money it borrowed from its overseas creditors is coming closer every day. For the foreign creditors are also getting very wary about the US financial status. 

Unfortunately for the US,  just as small businesses object to getting paid with a deflated currency for goods they purchased abroad at a hard currency rate, so do the international trading partners of the US .

Sooner, rather than later, US trading partners will  require payment for all the money the US owes them or for new purchases and loans, in hard currencies, like the European Euro'  or Chinese Renminbe.

When that happens, the US will have to go onto the International Financial Marketplace to buy hard currencies with their inflated “weaker” dollars to pay of those debts abroad.  Obvious the result will  be that this creates an even bigger deficit for the US tax payer and the US Treasury.

The present hype about an improving US economy, booming stock market and other positive financial reports are all basically frantic attempt by political and economic forces to  delay the inevitable pay-back time and present a rosy picture of what in reality is a very dire situation.

EU-Digest