Today’s Scenario and Future in Debt Crisis
The scenario and future of debt crisis reflects that the budget deficits will continue to grow up in the next decade. According to Richard Duncan, author of “The Dollar Crisis”,
the deficits will eventually reach an unsustainable level which may result in an economic collapse. Read on to know more on scenario and future of American debt crisis.
Today, the United States debt stands at more than $12 trillion. As per the financial expert Marc Faber, the consequences of these will be visible within the next five to ten years.
Through defaulting on their debt, most likely, large quantities of money will be printed.
Today’s scenario of debt crisis foresees not much hope for the US economy, which will face a major debt crisis in the coming years. Explaining the financial crisis, Faber comments that there’s a sovereign debt problem as the countries borrowed huge amounts of money during the good times from other nations. But they have a difficult time to back their lenders when there is a slump.
The debt crisis future will be bleak in these countries, which will blow up first - Portugal, Ireland, Italy, Greece and Spain. At least one of them will default in the next few years. And the day it happens it is supposed to bring the death of the Euro.
According to the Business Insider, commenting on the debt crisis scenario, there are two main problems when it comes to raze out the US Dollar. The ballooning debt and the future interest costs add to 12 per cent of the government’s tax revenue, which will touch to 35 per cent. The only answer the government has is to cut down spending, which is unlikely to happen, according to Faber. The governments will either print money at enormous levels.
The Chinese economy, as Faber believes, will crumple because of its excessive credit. But this will not happen for quite some time. It would be difficult to precisely foretell when China will implode, but not in the coming few years, according to financial experts.
The scenario and future of debt crisis doesn’t seem to be in good health, as U.S. has bleak chance of resolve its worsening financial position. The manufacturing industry continues to contract, which leaves the nation with very little goods to export. The persistent current account deficits by the U.S. were creating an unsustainable boom in global credit that was destined to break down and result in a worldwide recession.