Rafael Grillo

U.S. Debt Default, Dollar Collapse Altogether Likely

As scary as the scenario described in the article is, it is absolutely plausible. I am not sure everyone understands the roots of this economic disaster. Simply put, we've relinquished our industrial might, our true productive capacity and have fundamentally given it away to mainly China in our pursuit of profits. We've been living in a house of cards getting goods in exchange for IOU's for over two decades. And now that we are being asked to pay, we want to pay with more IOUs. Ah, America! No different than the rich kid that tried to live the big life with the fortune the grandfather created, without really working to preserve and grow that fortune. He just though he was entitled to that lifestyle. "Hey, I'm the richest and most powerful dude around" he'd brag. He ran out of money, but refused to change his lifestyle. He kept getting loans to sustain his lavish habits that lenders were happy to provide believing him rich. At some point though, the lenders doubted and stop the lending. The rich kid was no more. How many generations would his descendants require to rebuild the lost fortune? Because the only way to rebuild the might is not by spending (everyone talks about estimulating spending!), but by investing: building infrastructure, rebuilding productive assets and becoming self-relaint again. Because guess what: we aren't the richest and most powerful dude around anymore.