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Dallas Fed Chief Warns US Debt Near Tipping Point

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posted on Mar, 23 2011 @ 12:04 PM
Dallas Fed Chief warns US debt near ‘tipping point’
By Bruce Tyson Mar 22, 11 | Updated Mar 22, 11
Calls for an end to stimulus spending and Fed debt purchases

Americans may find out sooner rather than later that their country is insolvent, if Richard Fisher of the Dallas Federal Reserve Bank is correct in his remarks made to a German university.

In his speech he declared that the U.S. is headed to an insolvent condition, meaning that the nation could collapse under the weight of the massive debt it continues to accumulate with no apparent sign of abatement.

Although he seems to believe that American politicians will act in time to avert a fiscal disaster, he said that the nation is currently at a "tipping point" which presumably does not leave the country with much room for error.

According to CNBC, Fisher made the observation in remarks made during a question and answer session. He referred to the current American predicament as a "tipping point," although he asserted his confidence that the United States will take the necessary action to avert financial cataclysm.

No more stimulus

While appearing at the University of Frankfurt, Fisher called for an end of the controversial stimulus program, Reuters reports. Fisher seems to believe that the U.S. economy is now growing enough to sustain itself rather than relying on artificially high rates of deficit spending to stoke demand for products and services.

End quantitative easing

While dismissing the potential of additional stimulus programs, Fisher also suggested that the Federal Reserve will stop purchasing additional American debt when the current quantitative easing program expires in June. Quantitative easing has been controversial because it involved in the creation of hundreds of billions of dollars used to purchase more federal debt.

The move also seems to have had an inflationary affect in the United States and has exacerbated the financial condition of foreign countries like Egypt, contributing to the spreading unrest in the Middle East.

Continued danger

Although Fisher confirmed that the Federal Reserve is working to reign in some of its liberal financial policies, he also said that the same types of traders are emerging on commodities markets that could spark another financial meltdown if not addressed.

About Japan

When queried about Japan, Fisher said that right now it was impossible to gauge how the tsunami and earthquake in Japan would reverberate into the American economy. Additional concerns over the chaos in the Middle East could also impact the economy, but right now he said it is "too early to tell."

posted on Mar, 23 2011 @ 12:07 PM
reply to post by CosmicCitizen

Already being discussed.

posted on Mar, 23 2011 @ 12:08 PM

It would have been nice if these bastard people would have told us this BEFORE they helped cause the crisis.

It doesn't much help anyone at this point, except maybe to keep this bastard central banker's head attached to his body.

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