The Dry-Rot Economy
The financial consequences of infection sub-prime mortgage failure to continue to work its way through the economic foundations of the nation, like rust.
But to blame on the mortgage banks, banks and similar defects is swelling of the fracture. The American economy is a very fundamental nature on the map - and the result is that we see municipal bonds (Bonds, cities and schools), the collapse of the market in the insurer at the lending and windows. All rates auction of the securities market, a variant of the strange government loans, some of which, by the Denver International Airport and the City of Aurora, has opted to bury a lack of buyers . Interest rates for cities and by the expansion, taxpayers have skyrocketed. The whole market ARS, as big as 342 billion dollars, has literally evaporated. If you have a loan ARS, the letter you can today, are not sold. But the media and the public-at-large, have little of it.
This capital is always caught up in a bad sign that the American economy is at the moment. The higher prices mean billions of credit card payments for student loans, mortgages and car loans. What is traditionally a very low risk, municipal bonds, is now a bad joke. And job creation projects - roads, schools, bridges, hospitals - are now at risk. One of the main causes of the disaster credit traces itself back to the Confederation of the budget deficit, and the two trademarks of the Bush era - tax cuts, track spending and deficit $ 3 trillion war in Iraq. This enormous debt, financed in large part by China to serve a massive trade surplus with the United States - has hit the flexibility of the American economy the basic equation: buy cheap products , Wal-Mart, China. The Chinese, with their fixed rate monetary system (as part of their commodities are cheap), then return and invest in American dollars in debt. Given that China can not reinject the full value of their profits into the economy, hyperinflation, mainly because their currencies can not be flat, adapt compared with the US dollar, the two peoples are trapped in this spiral of degradation.
This weakens the dollar international causes of the energy (and food) prices up, the share of costs. American wages have stagnated. In January, American wages suffered a decline in real dollar. On savings and investment, creating a loop negative feedback, credits strengthened.
The answer, which is uncertain, the best is that we have debt, both personal and of the Confederation, under control; reduce our expenditure of energy, and to reinvigorate the heart of United States