Fiscal comparison: USA vs. Greece:
As media attention is focused on Greece the US dollar is often, implicitly, portrayed as a safe haven. Nonwistanding such representations it pays to remember that the official fiscal situation of the two countries, when viewed as total debt metrics, are not all that different.
We dug through sources including the white house, the CIA site and US Treasury site to put these numbers into a percentage of GDP perspective.
Fiscal Situation: USA vs. Greece
- The 2009 percentage to GDP deficits of 9.8% (USA - set to rise to 11.2% in 2010) and the Greek 10.7% /13% * are not that dissimilar.
- Debt to GDP for 2009 stand at 91% (USA) and 113% (Greece)
* The 10.7% Greek numbers are coming from the CIA by dividing their 2009 deficit by the 2009 GDP. However these numbers tend to be revised up as more debt is "revealed" making some statistic out of date, more recent sources suggest that Greece is really in the 13% deficit range. The US deficit for 2010 is also set to increase to 1.6 trillion USD which will likely bring the USA to a 11%+ deficit in 2010. (Sources at bottom of article.).
A similar analysis can be found at briefing.com - U.S. vs. Greece Debt.
For a more detailed breakdown of US debt levels take a look at http://www.usdebtclock.org/ . As the above numbers are US federal deficits only and , the 50 US States are also in dire fiscal conditions, see 46 US states face Greece-like deficits . For commentary on US unsustainable debt levels by Warren Buffet, Alan Greenspan and Timothy Geitner's predecessor take a look at http://www.iousathemovie.com .
The US Dollar was safe heaven in the past, but those days are gone. Astute Investor who made large fortunes such as Robert Kiyosaki, Jim Rogers or Marc Faber have been vocally pointing at the dollar's fragility yet It remains a mystery when the mainstream media and general investment public will start to take a good look at the US fiscal situation.
As a store of value of last resort and a universal alternative to the US dollar and the Euro physical
by G. Gregersen
Sources:
2009 Deficits (expenditures over income) :
- After a 1.4 trillion deficit in 2009 the white house predicts a 1.6 trillion deficit for 2010 (see article White House to paint grim fiscal picture).
- The US 2009/2010 deficit represents 9.8% / 11.2% of GDP. (14.26 trillion GDP source CIA https://www.cia.gov/library/publications/the-world-factbook/geos/us.html).
- Compare this to the Greek deficit of 10.7% of GDP (341 billion GDP and 36.5 billion 2009 Deficit.) (source CIA https://www.cia.gov/library/publications/the-world-factbook/geos/gr.html) - (Note - The Greek deficit might actually be in the 13% range as it is being revised higher)
- Greece Official debt 368.7 billion or 113.4% of GDP (source CIA https://www.cia.gov/library/publications/the-world-factbook/geos/gr.html). The current numbers are likely higher as more debt is "found" and GDP shrinks.
- US Official Debt as of June 26 13.038 Trillion. Assuming the same GDP as 2009 (as there is not much or even negative growth) the official debt rate is 91.4%,(source US treasury)
Disclaimer: The author owns physical silver and gold and will be accumulating more silver as a long term investment. It is the author’s belief that a systematic decline of confidence in the USD and US bonds will cause large amounts of funds to flow into traditional forms of money which cannot be arbitrarily printed (physical gold and silver bullion as opposed to paper derivatives). The author is not a registered investment advisor and nothing herein constitutes investment, legal, accounting or tax advice. Any communications are for informational and entertainment purposes only.