More than 2 years back, I had written about The Collapse of Dollar Economy?
The reasons for such a blasphemous statement were as follows:
Finally, I have found a taker of this argument in none other than David Walker, the Comptroller of the US. In an accompanying note to the Financial Report of the United States Government, realeased on December 15th, 2006, he cautions:
- Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000.
As this long-term fiscal imbalance continues to grow, the retirement of the “baby boom” generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008.
Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.
Meanwhile, a month old news-item in Financial Times reports that Oil Producers are gradually moving away from U$D... replacing it with Euros