The US is bankrupt and the only way our government knows how to solve any problem is to spend more of our money, even when they do not have it. The magnitude of our national debt ($12 trillion), addition social program obligations (social security, medicare, unemployment insurance, bailouts, etc.) and greater than a ten fold increase in the US money supply is so incredible, it is absurd.
There is no way the US will be able to repay this debt. As other creditor nations stop buying our treasuries, we will have to raise interest rates to attract buyers. This, along with the burgeoning national debt and lack of treasury buyers will ultimately lead to the dreaded bond and stock market crash that our leaders have been desperately trying to delay or avoid.
However, some other countries like Iceland, Dubai, Greece, UK, Argentina, etc. are apparently in worse shape than the US. Therefore, our attempts at avoiding default by printing money out of thin air seems to be working, at least for now. Every time another country comes close to or actually defaults, it makes the US dollar and US Treasuries appear attractive again to investors. Now there is even talk of China being in a financial bubble and ready to crash.
So the "game over" that may be coming is a default of the US government on its treasury obligations. But the timing of the default is uncertain. Many thought it would happen in 2009, but there are too many variables to accurately predict when or if it will actually occur.
But rest assured that there has been plenty of time for the Fed and our Treasury to talk with other countries to plan what to do if and when default occurs. It will lead to a new world currency. The questions in my mind are, what will happen to our national debt in this scenario, how much will our dollars will be worth in the new currency and how will gold and silver, not to mention other commodities be valued?
