'Phoney'..............from Rico

Before WWII started in earnest (in EUrope), the Fwench sat through the 'phoney war' snug behind their impregnable Maginot Line, blissfully unaware of the coming blitzkrieg.

Today, before our financial crisis starts in earnest, we sit through our 'phoney recovery' smug behind our own impregnable 'Maginot Line' of Quantitative Easing, blissfully unaware of the coming economic blitzkrieg.

National 'Debt' and 'Default' (like a shooting war) are NOT phoney. But, to the unaware ignorance is truly bliss....until you come face-to-face with the bayonet of objective reality.
- Trust me on this, it's always a very nasty surprise if you're not prepared.

Nations with a high debt-to-GDP ratio have a tendency to default. Greece and Italy, for example, have national debts greater than their GDP which indicates a real possibility of economic collapse. The US*, Germany, UK and others have their toes hanging over the edge of the pit right now. If one (or two) nations default, what do you think will happen to the rest of the dominos?

* The US is not shown on the attached chart, but has a 75% of GDP debt climbing rapidly to 100% of GDP under Obama/Soetero right now. The boy is trying hard.
- Foreign investment in US debt has dropped. At the recent auction of $150bn of US T-bills, net foreign acquisition was only $8.3bn.
- Foreign holdings of dollar-denominated short-term securities decreased $43.9bn, with T-bill holdings decreasing $38.3bn.
[translation= Not only are foreign onvestors NOT buying American debt, they
are also unloading the debt they already own!]
- The biggest purchaser of US Treasury debt is now the (private) Federal Reserve....printing money and buying T-bills in order to prop up the value of its own currency. This cannot go on indefinitely. It won't.

When (not IF) the dollar crashes, you won't ever run out of toilet paper....there will be planty of 'Bernanke Toilet Paper' around!