How to Inflation-Proof Your Retirement – The United States Debt Crisis – Protect Yourself
Article by Sophie Reade
The total official U.S. national debt stands at approximately $ 11 trillion. The “unofficial debt”, which includes the funding shortfalls of both the Social Security and Medicare programs, raises the total debt closer to $ 60 trillion. Of this, the last trillion dollars were added in less than six months. The United States’ government estimates that the national debt will reach $ 16.2 trillion by September 2012. The annual value of the American gross domestic product (GDP) is $ 14 trillion. To put this in perspective, if the $ 60 trillion in total federal debt was converted into single dollar bills, they would stretch out and loop around the sun and back around the earth over five times. In order to fund this much debt, the United States has to sell a lot of debt. One faithful buyer of this debt is the Federal Reserve System. In the parlance of government bureaucrats, this is called quantitative easing. When a government buys its own debt, it is said to be monetizing the debt. This is a polite academic term that means that the government prints the money it then uses to buy its own debt. It seems to be a counter-intuitive act; yet, the United States is not alone in monetizing its debt. The United Kingdom recently announced that it too would be pulling money out of thin air to purchase GBP 150 billion of its newly created debt. The International Monetary Fund estimates that, for the time period of 2010 through 2012, the U.S. will need to finance debt equal to 26 percent of its GDP. The only advanced economy with a higher financing need (52.9 percent) is Japan. This puts the U.S. squarely ahead of the three Euro zone countries that have recently needed bailouts: Greece (23.2 percent), Portugal (18.9 percent) and Ireland (19 percent). In fact, in the developed world, only Japan and America are increasing their underlying budget deficits. Japan does have one advantage over America, in that approximately seven percent of its debt is foreign-owned. For the United States, however, 50 percent of its debt is now foreign-owned. The question many economists ask today is this: Once the Federal Reserve stops purchasing U.S. debt, will there be enough for others to buy it? The U.S. has no alternative but to continue issuing debt. Interest payments on the national debt consume $ 4,000 billion per year. One way for the U.S. government to deal with its extensive debt is, of course, inflation. Many politicians create fiscal policy in a way that it, at least temporarily, alleviates the debt crisis. For us average citizens, this poses an immediate threat and creates a need to protect our hard-earned retirement assets from inflation. There are many safe ways to do it, the most intelligent being by investing in overseas bank accounts and trusts, denominated in foreign currencies. Another way to do it, which many people are unaware of, is by investing in Swiss annuities with companies like Gonthier Group. Swiss annuities are very flexible financial structures that allow one to take advantage of the safety, stability, and security behind the Swiss Franc.
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Categories: Crisis Five.com Tags: Crisis, debt, InflationProof, Protect, Retirement, States, United, Yourself
Debt Crisis
In the modern era credit card has turn out to an absolute necessity. On the other hand you should be smart enough to use it so that you are not on the wrong side of the road. Credit card is a sort of debt of debt instrument which can be used to ask for credit as when required. The company issuing a credit card charges an interest on the sum borrowed and you would be liable to pay the entire amount. The reluctance to pay off the debt leads to failure of payment on a particular deadline and the amount required being paid increases considerably and you land up in debt crisis. The failure of payment also leads to bad credit scores and leads to a default history so next time you ask for a credit card, the companies would be reluctant to issue a card to you.
Debt management is an important aspect you need to know while you are actively using a credit card. It is an instrument used in various countries to clear off unsecured debts. Theses debts usually arise when the payments are not made in time or the amount is so large that it would take out a huge chunk of your income. Debt management involves a third party who looks to various aspects of your sum borrowed and negotiates with the lender regarding the interest rate. The third party would charge an administrative fee initially and later on once the debt settlement is being done charges an ongoing management fee.
Debt settlement is also a key aspect when you are suffering from a credit card debt. In the current economic scenario in the world more and more people are suffering from job insecurity and they find it really hard to clear of their debt. There are various debt settlement companies that provide you with the programs related to debt settlement. They provide comprehensive plans of debt settlement and could help you get rid of your debt through a legal procedure. You could approach a debt settlement company in order to reduce your credit card debt and they would work effectively to settle the amount with your lender. There are various debt management companies who would take care of your financial debt and at the same time would offer debt settlement programs. Thus you can make use of all the services related to your debt crisis against a small amount of fees that the company is going to charge. In recent time the rate of bankruptcy has increased considerably and thereby the lenders are making a conscious effort to co-operate with the debt settlement companies in order to avoid such scenarios. A debt settlement company takes near about 10 to 30 months to bring a situation of debt relief. At the same time seeking help from debt management companies would help you to keep your credit scores high and a good credit history.
So make use of your credit card rationally and do not forget to seek advice from the experts present in various debt management companies.
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Categories: Crisis Five.com Tags: Crisis, debt
Constitutional Crisis over Debt Ceiling
Article by Whiteout Press
July 29, 2011. Washington. With the Republican Party fighting an internal civil war and unable to come together with one coherent message or position on the debt ceiling crisis, it looks as though the United States is headed for a different kind of crisis – a Constitutional crisis. With time just about out on avoiding a financial default by the US Federal government, experts and critics alike are quietly suggesting what might happen if a compromise on the nation’s borrowing authority isn’t found before Monday.
US financial markets, fearing the worst, have lost value five straight days going into Friday’s trading. Already, premarket trading is a sea of red due to a revision of the country’s GDP in the second quarter of this year. Early this morning, the government announced that the economy hadn’t grown by 1.8 percent in the second quarter as previously reported. Instead, the US economy grew a meager 0.4 percent in that time frame. With that number hardly enough to keep pace with the country’s growing population, it would appear that the nation’s economy actually shrunk last quarter. That announcement sent shock waves of horror throughout the global markets. Added to the uncertainty over the debt ceiling crisis, the world economy, especially in the US, is in for a painful ride today.
While financial experts are debating what would happen next week if the country runs out of money and is unable to borrow any more, Constitutional experts attempt to put their fears and panic to rest. Citing the Fourteenth Amendment to the US Constitution, government lawyers are already writing their legal briefs and preparing to present their argument to the nation and the world.
Since Treasury Secretary Timothy Geithner would have the authority to prioritize the nation’s bill paying, and since stiffing the American people on their paychecks, Social Security payments, Medicare reimbursements and the like isn’t considered default, the country wouldn’t actually be considered in default until the world’s investors aren’t paid their due interest payments on the money they’ve loaned us in the past. When that happens, the doomsday clock has officially expired.
With the country in a crisis never before seen in its history, nobody truly knows what might happen next week. Governmental experts, Constitutional scholars and elected officials alike have begun speculating and their visions occupy the entire spectrum of possibilities – everything from the dissolution of the Federal government on one extreme to an automatic dictatorship on the other extreme. The fact remains, nobody knows what would happen.
Anticipating a government shutdown and a Constitutional crisis, the call of “the 14th Amendment” has begun reverberating throughout the press today, specifically Section 4 of the 14th Amendment. Here’s what they’re talking about and exactly what Section 4 of the 14th Amendment to the US Constitution says:”4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”
Ratified on July 9, 1868, the Amendment basically sought to guarantee payments owed to soldiers, merchants, military suppliers and mercenaries in their service to the Union during America’s Civil War which ended only three years prior. The Amendment also insured that no Federal funding would find its way into the hands of past or current rebels, thus aiding them in their fight for secession.
Scholars are citing this Amendment as the nation’s emergency measure to solve the debt ceiling crisis and keep a financial catastrophe from becoming a national catastrophe. One curious question is why these same scholars are describing the Amendment as a tool of the White House, almost preparing the country for a unilateral, Executive Order type solution.
Section 5 of the 14th Amendment, the fifth and final Section immediately following the Section cited above, specifically reads as follows:”5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.”
According to the US Constitution, Americans are guaranteed protection from a financial default. However, the law of the land doesn’t place the authority in the hands of the President. Instead, it places full responsibility for avoiding a national default on the shoulders of Congress.
As we’ve been made painfully aware over the past two months, Congress hasn’t been able, or willing in some instances, to uphold its sworn oath to God and the citizens of the United States to make sure a default never ever happens.
In this nation jeopardizing act of betraying the American people and their sworn oaths to uphold, protect and defend the US Constitution, elected officials in Congress could feel the painful sting of Constitutional justice on two levels.
Congressional leaders, at least publicly, will be held most accountable. That includes the leadership of both parties. Speaker Boehner (R-OH) has been the most flexible, accommodating and eager to avoid a default, and that may be because as Speaker of House, he is at the top of the list of those individuals legally and morally responsible. He isn’t alone however. He would be joined by House Majority Leader Eric Cantor (R-VA), House Minority Leader Nancy Pelosi (D-CA) and their colleagues in leadership on the Senate side, including Senate President Joe Biden (Vice President), Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY).
According to the exact wording of the 14th Amendment of the US Constitution, all Congressmen share the blame and responsibility equally for not avoiding a national default. And since the Legislative branch of government is only responsible creating our nation’s laws, it will be up to the Executive branch and President Obama to enforce those laws. How he chooses to force Congress to uphold their sworn duty to God and the American people is yet to be seen. In the past, governors of numerous states have ordered the arrest and imprisonment of State Senators and State Representatives until they return to the State House and finish the people’s business. It would more then interesting if President Obama ordered a similar arrest of Congress. That would be more likely to cause a very real civil war rather than force a fix to the nation’s debt ceiling crisis.
Could it happen? The only truthful answer is, nobody knows. Read the Whiteout Press article, Victory for Tea Party in Debt Ceiling Fight to see where negotiations are at, and how we got here.
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Categories: Crisis Five.com Tags: Ceiling, Constitutional, Crisis, debt, OVER
