Peter Schiff’s analysis of the shenanigans in Washington is great when he says this current debt crisis is nonsense and self imposed. The debate behind the scenes going on inside the big government party is at what pace the borrowing will continue, not if the limit will be raised or not. The debt limit is certain to be increased, the bond markets know this, the banks have been reassured this, Moody’s and S&P know this and most of all, the Federal Reserve knows this. The debt ceiling will be raised, the deficit will grow and the real crisis is when our creditors no longer want to lend the US Government any more money or even if our creditors demand a higher rate of interest. That’s the crisis that is coming if the US government is to raise the debt ceiling and continue on its current path. Its because of the Federal Reserve's loose monetary policy of forcing interest rates down to 0-0.25% and keeping them down that has allowed the US Government to borrow at such a cheap rate.
The only way to end the never ending deficit spending is if we are willing to take the bad tasting medicine from the good Dr. himself, Congressman Dr. Ron Paul from Texas. It would create the necessary correction in the market to create growth again by balancing the budget, ending the wars and our military presents around the world saving trillions with a T of dollars and thousands of lives. And at the same times restoring the US Constitution and our civil liberties.
But if we continue and the lenders no longer want to lend or demand a higher rate of return to hold US debt, the Federal Reserve will monetize the debt, no doubt. And therein lays the problem. There will be a global dollar crisis brought on by the FED and the government over the last four decades and create hyperinflation for all American's not oblivious to the fact, if deficit spending is allowed to run its course. That's the crisis we will see this decade. The global dollar bubble is the fattiest of them all and certain to pop. Ron Paul 2012.
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