EU Precedes Another U.S. Economic Crises

It’s looking dicey in Europe, again. Former IMF Economic Chief, Simon Johnson gives an astute analysis of what is developing in Europe and the similarities of circumstances here in the states. As always, Johnson has his finger on the pulse of global economic matters. This time I am wincing at the prospects. Is this why investors are flocking to precious metals running up silver of all things? Platinum is at an all time high…. Gold ever increasing. Is this why Ron Paul keeps touting a return to the gold standard? Are we witnessing a major move to hedge anticipated losses? What huge losses are we talking about? Defaults on debt across the board.

Here is an excerpt from Simon’s article:

Fresh Crises Loom in Europe and the United States

Most experienced watchers of the euro zone are expecting another serious crisis in early 2011, tied to the rollover funding needs of its weaker governments. With debts coming due from March through May, the crisis seems much more predictable than what happened to Greece or Ireland in 2010.

There are plenty of places in Europe where you can find an easy political consensus to cut taxes and increase budget deficits. Sadly, this no longer pacifies markets. The American political elite – right and left – believes that we are different from the Europeans because we issue the dollar and therefore have some special privileges forever.

But this is not the 1950s. Asia has risen. Europe will sort itself out and become more fiscally Germanic. The Age of American Predominance is over.

Our leading bankers looted the state, plunged the world into deep recession and cost the United States eight million jobs. Now many of them stand by with sharpened knives and enhanced bonuses – willing to suggest how the salaries and jobs of others can be further cut. Consider the morality of that.

Will no one think hard about what this means for our budget and our political system until it is too late?