Is US going to be bankrupt? Many pundits say yes.
What are the factors that may lead to this?
1. US $38 trillion debt. Its debt service is over $1 trillion much more than US spending on military and health. Its ratio of debt service to GDP is 121% and many say the threshold is of 120% has been crossed.
2. End of US as reserve currency. The pegging of US dollar to gold was ended in 1971 when fmr Richard Nixon ended convertibility of US dollar to gold. France collected US gold and so with many other countries and Pres. Nixon saw it fit to end the Bretton Woods agreement in 1944 that pegged US dollar to the gold. This meant less US countries are using US dollar as reserve and that means more US dollar coming home to roost
Another cause for dumping of US dollar from its reserve currency status were: weaponizing the dollar vs Russia. Every country is vulnerable to such sanction and thus avoided the dollar.
BRICS countries are dumping the dollar as reserve currency and having their own electronic transfer system bypassing SWIF
3. End of the 50 year Petro dollar. There was so called Petro dollar agreement between Henry Kissinger where the deal was for making KSA ask for payment in dollar, and in return US would support KSA by arms and security. KSA also would invest petro dollars in US treasury. It was seen, like the Japan Yen, KSA recycling the payment by USA back to US (even when the oil was purchased) thus supporting the US cheap lifestyle (as with the Plaza accord for Japan)
Thus US printed more US dollar to support this oil purchase in dollars. US exported inflation to KSA and supported US debt
4 What this means:
The cheap US Petro dollar coming home to to roost and US mainland will be flooded with dollars and hyperinflation will be the tune of the day. Currency debasement is prelude to collapse: it has happened to Roman denarius, Spanish pesetas, UK pound sterling. It can and will happen to US dollar
5. Japan is now selling off its $1.3 trillion holding of US treasuries (to finance it QE to support the moribund Japan economy. They are raising the local bonds to near 2% (from negative) pausing Japans appetite to US treasury. That means less buyer for US treasuries, and less liquidity for USA. Japan is probably reeling to US Trumps 50% export tariff to Japanese goods (despite the Plaza accord)
6. What are your alternatives? (Survivalists were right)
Philippines is a safe haven after all. Rich natural resources: seas for food, plenty of farmlands. Many may see Americans escaping difficulties at US homeland due to this forthcoming collapse: US bankruptcy. It is expected that life will be hard in USA.
