US Default Inevitable: Fund Manager

[OhioChick]

Published: Wednesday, 13 Jul 2011 | 7:12 AM ET

A U.S. default isn't a matter of "if" but "when," David Murrin, chief investment officer at Emergent Asset Management, told CNBC.

It's inevitable that the U.S. will default—it's essentially an empire which is overextended and in decline—and that its financial system will go with it," he said.

The question is: Does the U.S. default when it is forced to by the outside world, probably the Chinese, or does it take the option to default on its own terms in such a way that it may have a strategic advantage, Murrin said.

Republicans and Democrats are currently locked in a debate on how to cut the U.S. budget deficit, and on whether the $14.3 trillion debt ceiling should be raised. Both parties need to come to a consensus by Aug. 2, otherwise the country will be in a state of technical default.

More: http://www.cnbc.com/id/43721270

[plcdude]

1. the sky is

falling jeesh.

[Tesha]

2. 1. Stop military operations worldwide. 2. Raise taxes on the wealthy.

Problem solved.

Next?

Tesha

[hobbit709]

3. Let me guess. He's placed his bet that we will.

[pnwmom]

5. Exactly. Look at his job. nt

[pnwmom]

4. Notice who this guy is: someone with a vested interest in a U.S. default.

He's an officer at "Emergent Asset Management."

His job is selling people on the idea that they better invest globally because the U.S. is on the decline.

[roxiejules]

6. Dean Baker on Manufacturing Fear

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jul/11/social-security-debt-ceiling-talks

How about that $14.3tn figure for the debt ceiling? That's a really big number, really scary. So is just about every number connected with the United States budget. We are a huge country with a huge economy. Competent reporters would focus on this being about 90% of US GDP.

Is that big? Well, the debt to GDP ratio was over 110% after the second world war. The United Kingdom had debt to GDP ratios of more than 100% for much of the 19th century, as it was establishing itself as the world's pre-eminent industrial power. Japan has a debt to GDP ratio of more than 220% of GDP and can still borrow in financial markets long-term at interest rates of less than 1.5%.

So, what's the problem? The politicians who want to cut social security and Medicare obviously want the public to believe that there is a huge problem and – due to the incompetence of the media – they have managed to instill fear throughout the nation about this massive non-problem.

[damntexdem]

7. Bullshit. The U.S. tax system is underextended.

Tax the fucking rich and pay down the debt.