GLOBAL RESOURCES ANALYSIS
HEADWINDS | BUDGET DEFICITS
Governments that have already huge debts and face more spending and less income by declining economies due to PeakOil will have severe problems by financing their transition and will hereby stay buried under rising energy costs. Even by high interest rates (15-20%) there is no capital supply for US Municipal Bonds (semi-governmental capital investments), which will leads to yet higher interest rates. Municipals have overgrown treasuries enormously in interest rates. This is a very strange development, because Municipals represents actual value and Treasuries are more and more just fuel for paying interest on earlier loans. If the federal government survives their debts is a question: States could choose to let the federal ship debt burdened sink. Municipals their actual forecasts are better then those of Treasuries. Yet Treasuries are still covered by some (economic fake, yet official) roof. Most of these less capital supply is due to the fact that there are no Triple A bond insurers left that is RWA (read, willing and able) to guarantee repayment. Due to the absence (of also been proven fake roof of the Bond Insurers of the past) interest rates skyrocking, even as these huge interests are tax free income for US citizens and (investment) companies: making the cost of the loans even more expensive for the government.
Author: Gijs Graafland
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