Monday, August 01, 2011

So the US has raised its debt ceiling, as I predicted; what's next?

Readers will recollect that I predicted, in contrast to many doomsayers, that the US would indeed have a deal on raising its debt ceiling.

Expect therefore a burst of confidence for a short while.

Then reality will set in and the real debate will start, regarding how to reduce the level of unemployment in the US, and how to boost the economy.

Expect, therefore, yet more money to be printed (Quantitative Easing III).

The stimulus effect of that will shore up confidence for a while.

When that wears out, the US will have to finally face the fact that it can no longer duck the real issues that have been facing it for some time now: is it going to lead the world through responsible financial, monetary, economic and ecological policies, or is it going to initially lose global leadership and, soon after, become irrelevant globally. Sphere: Related Content

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