You desire and do not have, so you murder. You covet and cannot obtain, so you fight and quarrel. You do not have, because you do not ask. You ask and do not receive, because you ask wrongly, to spend it on your passions – James 4:2-3
“I just hate him. I hate everything about him. I hate him so much I’m willing to hurt myself financially if it means it’ll hurt him. I’m just full of… rage”.
I quietly sat across from the woman, and stared blankly at her lip, which was quivering with anger. I didn’t know what her husband had done. I didn’t bother asking – because it didn’t matter. This was a totally dysfunctional situation. They were broke, and broken.
What’s going on in the US right now reminds me of that couple.
“America flirts with self-destruction,” read the front-page of the Financial Times this week, in response to the partial shutdown of the government.
The US has been so financially irresponsible for so long that it’s going to take both sides of politics working together to dig themselves out of the giant, urgent, hole they’re in. But that’s unlikely to happen. After all, the US hasn’t passed a budget on time since 1997.
A bigger catastrophe could be on the cards in less than two weeks. If congress doesn’t lift the debt ceiling by October the 17th, the US will effectively default on its debts. That would arguably cause a bigger panic than occurred in 2008, because the entire financial world is built on the back of US debt.
Surely it won’t get to that, right?
Don’t bet on it. Like the feuding couple, there’s generally one party that’s bitter enough to push things to the limit.
Right now the only hope is Wall Street.
Because they own most of the US debt, they’ve got the most to lose. Hopefully, they’ll be able to pull their political puppets into line – though they haven’t been able to yet. (That explains President Obama’s warning to Wall Street that “we’re in trouble”).
So what’s the alternative?
More of the same: more debt being printed, more government shut downs, and more flirting with pushing the US economy over the edge.
And if you’re looking to retire, that should really concern you.
This week the world’s biggest bond investor, Bill Gross, who manages the $250 billion PIMCO bond fund, said he believes the US could keep interest rates abnormally low for a long, long time.
The bond king thinks we could have low interest rates “for decades to come”.
Source: http://barefootinvestor.com/ newsletter