We’re The New Argentina

In The Oregonian today is a column written by Desmond Lachman, a fellow at the American Enterprise Institute, titled We’re the new Argentina. Lachman writes, after the performances of Bernanke, Geithner and Paulson, he’s worried that the U.S. is “coming to resemble Argentina, Russia… both in what led us to the (financial) crisis and how we’re trying to fix it.”

A singular characteristic of an emerging market heading for deep trouble is a seemingly suicidal tendency to become overly indebted to foreign creditors.

Even though the U.S. is not an emerging market, we are doing the bad things that get emerging markets in trouble and “we never seem to question whether it’s reasonable to expect foreigners to keep financing our extravagance…”

The budget outlook for the next four years and beyond, if nothing changes, is for annual trillion dollar deficits, that will add to the already imposing debt of $11 trillion! Lachman writes “… should we not heed the markets that now see a 10 percent probability the the U.S. government will default on its sovereign debt in the next five years?”

If the politicians on both sides of the aisle don’t know what to do, many in Utah do. The Salt Lake Tribune reports that

Worries over the future of the nation’s economy and the looming possibility the federal government’s trillion-dollar deficits may ignite inflation has many Utahns fleeing to the perceived safety of gold and silver.

What we now have is a shortage of gold and silver coins.

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