Prof Elizabeth Warren (Chair of Congressional Oversight TARP) recently said in the new TV program called ‘Addicted to Money’; “…the crash is big enough, it is, it is massive enough, that the threat is, bail us out or the way of life that you understood, the, the whole economy will simply be gone–it’s like a hostage situation now!”. – ‘Addicted to Money’ – Episode-2, by David McWilliams, ABC-TV Australia, first-aired on Nov 12 2009.

Effectively ‘Too-Big-to-Fail’ banks are holding the US taxpayers hostage (bail us out–indefinitely–or else), and the willingly co-opted US government is doing exactly that, while it also holds Chinese creditors hostage. But Beijing has a firm grasp on the US’s credit-economy testicles with the implicit capacity to undermine a US recovery, if the US defaults or otherwise massively devalues Chinese US-dollar investments. Obviously sustaining this situation is impossible. The TBTF banks will go away because US taxpayers will eventually rebel–it’s just that simple–and the US Govt will quiver in fear when they do. Then Chinese (and don’t forget Japanese) will loose huge on USD investments and credit will be much harder and more expensive to obtain—say goodbye to the photosynthetic brambles. US GDP will stagnate, at best, the dollar will plummet (quite deliberately to grow exports), and US business investment will hit new record lows. The deficits, interest on principle (annual US NET public debt interst-servicing cost will reach about $1.3 trillion USD by 2020 or about 50% of current US annual tax revenue! And this does not enven take into account that US triple-AAA credit will be downgraded…), inability to refinance, and the unavoidable long-term tax increases … welcome to credit ka-ka-do-do land.