Sunday, April 07, 2013

US Insolvent

According to Rob Gordan of Sovereign Investor (2013, April 7):
  • America has not passed a budget since April of 2009 -- almost three and a half years.
  • US annual income is $2 trillion, while US total debt obligations are $121 trillion (that’s a debt ratio of 60/1 -- typically anything over 1/1 is a significant red flag for investors, indicating that the entity of interest may not be able to pay its debts in 12 months’ time).
  • Since 1900, US expenses have increased by an average of 24% a year, while revenues have risen only 15% year.
  • The US has lost money 42 out of the last 47 years.
  • The US expenses are 56% higher than its revenues.
  • The US expects to double its debt within the next 10 years (the interest on that debt alone will equal $1 trillion a year).
  • The US now owes 885% of its GDP, more than any other industrialized country.
  • The US debt per capita is higher than Greece, Portugal, Italy and Spain.
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Let's face it, the US is insolvent.

Source: Gordan, R (2013, April 7), "We're in Uncharted Economic Territory...", Sovereign Investor.

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