The “Ugly, Ugly Math” of Our Debt

“Despite Republican opposition, the Senate on Thursday voted to allow President Barack Obama to increase the debt ceiling by $1.2 trillion, an amount large enough to ensure the federal government can pay its bills through the November elections.”

And if  America defaults?

“A default occurs when the government does not have enough funds to meet any of its legally mandated fiscal obligations, including paying interest on its existing debts, federal employee salaries, tax refunds, and Social Security and Medicare payments. A default could potentially wreck the government’s credit rating, lower demand for U.S. assets, deprive federal workers of their salaries, and deny Social Security benefits to retirees, potentially triggering a wide-reaching economic crisis.”

“The Federal Reserve can keep borrowing rates ‘exceptionally low,’ as it’s promised to do for an ‘extended period.’ And it can start paying banks less interest on the cash they keep at the Fed. This could make some banks take that money out and put it into the market.

Either way, this flood of dollars — through cheap borrowing rates and banks injecting cash into the market — will mean inflation.”

“Protect yourself against food prices inflation…buying now can help you avoid price increases in the future. Some staples last longer than others (canned foods can last years), but as long as you properly store them, you can protect yourself to some degree from rising prices. Here are 7 food staples to consider buying now, so that you can reduce your inflation risk later: corn, canned vegetables, kidney beans, wheat, all purpose flour, dehydrated fruit,  and canned fruit.”