HOW MUCH TIME LEFT UNTIL OBAMA TRIES TO STEAL YOUR RETIREMENT ACCOUNT?
Neither the United Kingdom, France nor the United States have a credible plan to bring their deficits down to a level below realistic expected growth rates, which is what is needed to avoid a financial meltdown. All three governments have what they politely call a "moving target" for spending, deficits and economic growth. The moving target is one that never gets any closer.
The Bank of Japan, the European Central Bank (ECB), the Bank of England, the U.S. Federal Reserve and others have been engaged in a currency war in which they try to reduce the value of their currency relative to the others. This past weekend at the G20 Finance Ministers and Central Bank Governors meeting, the above-mentioned nations and others denied they were in a currency war and then pledged not to do more of what they said they were not doing. Don't bet your life on that.
Many of the central banks are trying to do the impossible: To increase inflation while keeping interest rates very low. They want to raise inflation to erode the real value of the debts their governments have been creating, but they are fearful that raising interest rates will make the costs of servicing both private and public debt unmanageable.
Where will all of this lead? Argentina provides an interesting case study.
