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While, with the growth of US deficits, the need for foreign investors for financing it grows, US creditworthiness is rapidly deteriorating. The ratio of total US debt to GDP from 163 % in 1980 became 240% in 1990 and jumped to 346% in 2007.It is enormously aggravated with the dramatic developments of 2007-2008, including the addition to the public debt of $6 trillion liabilities of Fannie and Freddie and the $700 billion of the Paulson Plan. America has been transformed into a super-Argentina in a non-declared default. The problem of US over-indebtedness is transferred to the next Administration.
This one is an unstoppable world crisis.
Any State intervention is totally inadequate to face the enormity of the problem produced by the over-accumulation of fictitious capital.
The derivatives market expanded from a $100 trillion in 2002 to $516 trillion in BISâ ™s estimation in 2007 or $585 trillion in other estimations! Comparatively all the real goods and services produced by all economies in the world annually, the global annual gross domestic product is less than $50 trillion, and the US annual GDP of approximately $13 trillion. It becomes crystal clear that no intervention by the State, by a central bank or by all of them in the world put together could ever control the tempest of this ocean of derivatives.
BIS is Bank for International settlements
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