PREDATORY WEALTH DESTRUCTION
The U.S. and most other governments of the world are issuing debt at such a rapid rate and at such high levels, with no real plans to reverse such behavior, that it is almost a certainty they will not pay back what they owe.
An insightful European banker suggested to me over breakfast a couple of weeks ago that the European political class would use selective expropriation, rather than inflation, to avoid paying back all of the debt.
The way this would be done would be that the political leaders would announce they would only pay back those bonds with full interest that were held by labor unions and other "politically correct" interest groups but not the bonds held by "greedy bankers" and rich people. Maturities would be extended and promised interest rates lowered - effectively reducing the value of the bonds.
My initial reaction was that, yes, such a selective expropriation might work in Europe, but not in the United States. As I thought more about it, however, looked at what was happening, and heard President Obama's rhetoric attacking "greedy" bankers and insurance companies, I began to think that not only was my European friend right about Europe, but his scenario was equally valid here.
Look at the evidence.