All the essays about the terrible US deficit are written by guys standing too close
When the next republican gets elected we are going to SHOVE our fiscal rules down the throats of the rest of the world.
Think about it - 17 of the 19 members of the 9/11 attacks were Saudi's.
Do you think for a second that the US government doesn't remind this to the Kingdom EVERYDAY. So they do exactly as we say. Islamic Fundamentalism was born and is paid for in Saudi Arabia.
The so called "deficit" does not mean a thing as long as the US can turn its non conforming partners into a sheet of glass in 100 minutes.
It going to get ugly for the rest of the world but the coddled people of the United States are going to do great because we have built a military that can easily beat the rest of the world.
As the military balance between the US and China gets closer war becomes more likely. But right now we are supreme especially since we have an alliance with Russia that gets closer everyday. Putin is a genius to figure out that by making close friends with the US that he can save on weapons and make life for his people better. So the US are the masters for at least 10 more years. A lot of things can happen in 10 years. New rules regarding silly things like "stores of value" can easily be changed to suit the United States.
The KEY however is that people believe that these silly pieces of paper remain a store of value - that they are worth receiving in return for working hard 40 hours a week, 48 weeks a year for 50 years.
Buffet thinks there will be natural and man made disasters like the tsunami in Japan but much worse where at least 500,000 people are killed in 30 minutes. Could be a dam bursting in China, an earthquake, a nuclear bomb, a virus. When events like this occur, rules can be changed to suit the powerful.
Are we going to war with China as their Army gets more powerful? Maybe but....
Bill Middendorf - former interim head of CIA - says that the next weapon will be a bomb that fries our communications systems. He says it will go off somewhere in the middle of the US and kill all internet, phones, systems.
Also Chinese Generals are sending their grandchildren to school and buying condos in US. The US is their safe haven for their families and their cash. My guess is that they will figure something out to avoid war since they are much smarter than us and really do have amazing central planning. It is huge beehive country.
My feeling is that we should create huge separate communities for their old and become the nursing home for China. It would jump start our housing industry, give lawyers a HUGE amount of work and reduce our deficit with China.
Dont worry - you wont have to see these old people doing their Tai Chi and making funny sounds as they slurp their noodles - they will be living somewhere in western Nebraska.