Jupiter, FL (PRWEB) January 26, 2008
Larry Edelson takes a closer look at the U.S. economy and the debt that has been collected over time. Mr. Edelson examines the amount of debt the U.S. has and all the different places that debt has come from.
The U.S. economy is in bad shape. More than $750 billion has been printed and dumped onto the U.S. economy by central banks around the world. President Bush, Treasury Secretary Henry Paulson, and virtually all of the 2008 Presidential candidates are calling for as much as $150 billion in immediate tax cuts.
Four major financial institutions have begged to secure capital infusions from the likes of Abu Dhabi, Singapore, China, Kuwait, and more to stave off insolvency. The U.S. economy is suffering from debt addiction and America's debt is crumbling like there's no tomorrow. Underneath the real estate debacle are several more layers of debt that are like dominos ready to topple at any minute.
The federal government itself is in hock to the tune of $9 trillion, and that's just the national debt. That doesn't take into account social security, Medicare, government pensions coming due, or any other domestic obligations the government is responsible for. Add them all up and it's a whopping $55 trillion in debts Washington is on the hook for.
U.S. citizens are also broke, for all intents and purposes. Debt is at its highest levels ever, equal to 23% of the average American's household net worth.
Unlike many other countries, the U.S. economy is very transparent, liquid, and innovative. That makes the U.S. more resilient than just about any other country on the planet. The U.S. markets are the most efficient in the world at dispersing risk and at creating solutions to crises. Between the legal system, the regulatory authorities, and the talent this country has in the financial sector, the subprime and debt problems will eventually be at least partially alleviated.
In 2007, foreign investors poured a record $414 billion into American companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm. That's an increase of 90% over 2006 and double the average for the last decade. During just the first two weeks of 2008, foreign businesses and giant Sovereign Wealth Funds invested another $22.6 billion in American companies. If they keep that pace up all year, they will invest another $588 billion in the U.S.
"As a result, this flood of money could wash Wall Street clean and large chunks of debt losses could then be converted into equity, helping to capitalize and recapitalize many American institutions. All this, in the end, is positive for the U.S. economy. But it will also change it forever as inflation goes through the roof," Mr. Edelson states.
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About Larry Edelson and Money and Markets
With nearly three decades of experience in precious metals and natural resources markets, Larry Edelson has played a pivotal role in training Weiss Research staff and in guiding Weiss Research's customers to prudent investments in the sector. His Real Wealth Report, Gold Trader Hotline and Energy Options Alert provide a continuing education on natural resource investments, with recommendations aiming for both profit and risk management. His team of technical analysts helps enhance the timing of investment recommendations with the aim of continually improving the performance results for investors.
Mr. Edelson is also a regular contributor to the daily e-letter, Money and Markets. Recognized as an expert in precious metals and natural resources, he is often called upon by the media for his investing views. Mr. Edelson has been featured on Bloomberg, Reuters, and CNBC as well as The New York Times, New York Sun, and Marketwatch.com
Mr. Edelson holds a B.A. degree from Columbia University.
Money and Markets (http://www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit http://www.moneyandmarkets.com.