The United States could soon become a large-scale Spain or Greece, teetering on the edge of financial ruin.
That’s according to Donald Trump, who painted a very ugly picture of
where this country is headed. Trump made the comments during a recent
appearance on Fox News’ “On the Record with Greta Van Susteren.”
According to Trump, the United States is no longer a rich country. “When you’re not rich, you have to go out and borrow money. We’re borrowing from the Chinese and others. We’re up to $16 trillion in debt.”
He goes on to point out that the downgrade of U.S. debt is inevitable.
“We are going up to $16 trillion [in debt] very soon, and it’s going to be a lot higher than that before he gets finished. When you have [debt] in the $21-$22 trillion, you are talking about a downgrade no matter how you cut it.”
Ballooning debt and a credit downgrade aren’t Trump’s only worries for this country. He says that the official unemployment rate “isn’t a real number” and that the real figure is closer to 15 percent to 16 percent. He even mentioned that some believe the unemployment rate to be as high as 21 percent.
“Right now, frankly, the country isn’t doing well,” Trump added, “Recession may be a nice word.”
While 15 percent to 16 percent unemployment, a looming credit downgrade, and ballooning debt are a bleak outlook for the United States, they are hardly as alarming as the scenario laid out by another economist.
Without earning celebrity status or having his own television show, Robert Wiedemer did something else that grabbed headlines across the country: He accurately predicted the economic collapse that almost sank the United States.
In 2006, Wiedemer and a team of economists foresaw the coming collapse of the U.S. housing market, equity markets, private debt, and consumer spending, and published their findings in the book America’s Bubble Economy.
Where Trump sees ballooning debt and a credit downgrade, Wiedemer sees much more widespread economic destruction.
In a recent interview for his newest book Aftershock, Wiedemer says, “The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012.”
When the host questioned such wild claims, Wiedemer unapologetically displayed shocking charts backing up his allegations, and then ended his argument with, “You see, the medicine will become the poison.”
The interview has become a wake-up call for those unprepared (or unwilling) to acknowledge an ugly truth: The country’s financial “rescue” devised in Washington has failed miserably.
The blame lies squarely on those whose job it was to avoid the exact situation we find ourselves in, including former Federal Reserve Chairman Ben Bernanke and Chairman Alan Greenspan, tasked with preventing financial meltdowns and keeping the nation’s economy strong through monetary and credit policies.
At one point, Wiedemer even calls out a Bernanke saying that his “money from heaven will be the path to hell.”
The Bank for International Settlements (BIS), sometimes known as the central bankers’ bank, warned in its quarterly review that the present lack of volatility in global financial markets was not a sign of strength, but rather a herald of new dangers.
As BIS chief economist Claudio Borio told reporters in a briefing on the review: “It all looks rather familiar.
"The dance continues until the music eventually stops. And the longer the music plays and the louder it gets, the more deafening is the silence that follows,” when markets become illiquid precisely at the moment “when liquidity is needed most.”
Fortune Magazine writes: "In early 2014, investment buzz over the great promise of social media, e-commerce, and biotechnology stocks had investors pouring money into both domestic and foreign social media and e-commerce stocks (e.g., Alibaba) and small biotechnology stocks (e.g., Intercept Technologies).
Like individuals, collective overconfidence is usually aggravated by mental accounting, as investors end up
chasing one class of assets (rather than diversifying) and end up buying when valuations are high.
That was the case in the high-tech bubble of the late 1990s. Investors who invested in the technology-heavy NASDAQ during the high-tech bubble of the late 1990s- early 2000s made big gains as the bubble expanded, but lost a great deal of money as the bubble burst in the early 2000s.
The fear of losing is another emotional button that is turned on by a string of losing bets. Overconfidence is succeeded by over-pessimism — negative WOM succeeds positive WOM, and the bubble busts.
The market correction that began in 1929, for instance, took the price of US stocks down by 86 percent. T
he October 1987 correction drove US equities down 20 percent over three days.Investors panicked over a collapse of the dollar and rising interest rates, which made stocks less appealing than alternative investments.
In 2007-08, major indices lost more than 50 percent of their value, as investors fled equity markets, fearing a collapse of the financial system. This means that emotional investors are rushing to buy at a time when valuations are high, blowing the bubble bigger faster; and rushing to sell at time when valuations are low, busting the bubble faster.
That may prove to be the case in 2014. Wall Street may finally be exposed what it really is: a "financial Casino" which has seen its best days.
EU-Digest
That’s according to Donald Trump, who painted a very ugly picture of
where this country is headed. Trump made the comments during a recent
appearance on Fox News’ “On the Record with Greta Van Susteren.”According to Trump, the United States is no longer a rich country. “When you’re not rich, you have to go out and borrow money. We’re borrowing from the Chinese and others. We’re up to $16 trillion in debt.”
He goes on to point out that the downgrade of U.S. debt is inevitable.
“We are going up to $16 trillion [in debt] very soon, and it’s going to be a lot higher than that before he gets finished. When you have [debt] in the $21-$22 trillion, you are talking about a downgrade no matter how you cut it.”
Ballooning debt and a credit downgrade aren’t Trump’s only worries for this country. He says that the official unemployment rate “isn’t a real number” and that the real figure is closer to 15 percent to 16 percent. He even mentioned that some believe the unemployment rate to be as high as 21 percent.
“Right now, frankly, the country isn’t doing well,” Trump added, “Recession may be a nice word.”
While 15 percent to 16 percent unemployment, a looming credit downgrade, and ballooning debt are a bleak outlook for the United States, they are hardly as alarming as the scenario laid out by another economist.
Without earning celebrity status or having his own television show, Robert Wiedemer did something else that grabbed headlines across the country: He accurately predicted the economic collapse that almost sank the United States.
In 2006, Wiedemer and a team of economists foresaw the coming collapse of the U.S. housing market, equity markets, private debt, and consumer spending, and published their findings in the book America’s Bubble Economy.
Where Trump sees ballooning debt and a credit downgrade, Wiedemer sees much more widespread economic destruction.
In a recent interview for his newest book Aftershock, Wiedemer says, “The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012.”
When the host questioned such wild claims, Wiedemer unapologetically displayed shocking charts backing up his allegations, and then ended his argument with, “You see, the medicine will become the poison.”
The interview has become a wake-up call for those unprepared (or unwilling) to acknowledge an ugly truth: The country’s financial “rescue” devised in Washington has failed miserably.
The blame lies squarely on those whose job it was to avoid the exact situation we find ourselves in, including former Federal Reserve Chairman Ben Bernanke and Chairman Alan Greenspan, tasked with preventing financial meltdowns and keeping the nation’s economy strong through monetary and credit policies.
At one point, Wiedemer even calls out a Bernanke saying that his “money from heaven will be the path to hell.”
The Bank for International Settlements (BIS), sometimes known as the central bankers’ bank, warned in its quarterly review that the present lack of volatility in global financial markets was not a sign of strength, but rather a herald of new dangers.
As BIS chief economist Claudio Borio told reporters in a briefing on the review: “It all looks rather familiar.
"The dance continues until the music eventually stops. And the longer the music plays and the louder it gets, the more deafening is the silence that follows,” when markets become illiquid precisely at the moment “when liquidity is needed most.”
Fortune Magazine writes: "In early 2014, investment buzz over the great promise of social media, e-commerce, and biotechnology stocks had investors pouring money into both domestic and foreign social media and e-commerce stocks (e.g., Alibaba) and small biotechnology stocks (e.g., Intercept Technologies).
Like individuals, collective overconfidence is usually aggravated by mental accounting, as investors end up
chasing one class of assets (rather than diversifying) and end up buying when valuations are high.
That was the case in the high-tech bubble of the late 1990s. Investors who invested in the technology-heavy NASDAQ during the high-tech bubble of the late 1990s- early 2000s made big gains as the bubble expanded, but lost a great deal of money as the bubble burst in the early 2000s.
The fear of losing is another emotional button that is turned on by a string of losing bets. Overconfidence is succeeded by over-pessimism — negative WOM succeeds positive WOM, and the bubble busts.
The market correction that began in 1929, for instance, took the price of US stocks down by 86 percent. T
he October 1987 correction drove US equities down 20 percent over three days.Investors panicked over a collapse of the dollar and rising interest rates, which made stocks less appealing than alternative investments.
In 2007-08, major indices lost more than 50 percent of their value, as investors fled equity markets, fearing a collapse of the financial system. This means that emotional investors are rushing to buy at a time when valuations are high, blowing the bubble bigger faster; and rushing to sell at time when valuations are low, busting the bubble faster.
That may prove to be the case in 2014. Wall Street may finally be exposed what it really is: a "financial Casino" which has seen its best days.
EU-Digest
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