John Williams of ShadowStats hits it on the head in his latest.
With a real (according to generally accepted accounting principles)
US annual deficit of $5 Trillion (rather than the official $1.5 T), the congressional budget cut drama over raising the US debt limit is a joke.
Cuts of $4-$5 Trillion over 10 nears are almost meaningless when you are running $5 Trillion ANNUAL DEFICITS!
While Williams has backed off of his hyperinflation in 6 months prediction (made nearly 10 months ago now), he continues to believe the end result will eventually be a dollar that loses nearly all of its purchasing power- be that by triggering a US debt default (not increasing the debt limit) or with additional quantitative easing.
“The actual deficit, including the increase in the unfunded liabilities for social security and medicare that we go through each year, have us looking at an annual deficit of four to five trillion dollars. So the small cut being proposed of four to five trillion dollars over ten years is not going to do much to bring the system into balance.
As activity begins to turn down again, you are going to see things get even worse, and the continued economic trouble is going to be very long and very deep. That puts the Fed in a circumstance where you virtually are assured of a quantitive easing three. That in turn will weaken the US dollar further."Click here for more of Williams' interview with KWN:
