U.S. Debt Crisis: What's the End Game?
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- It is pretty much settled that the European Monetary Union, as it is now constituted, cannot survive. It is just a matter of whether the course of events will be disruptive, or will be coordinated by the European leaders. Given what we have observed over the past year-and-a-half regarding their unfolding debt crisis, I suspect the former. We may even see bank runs, frozen credit markets, plunging equity values and other ugly stuff if the political forces there don't get their acts together real soon.
But, let's not be so na´ve as to think that we, in America, are immune from a similar scenario. No, the dollar isn't going to break down into a set of regional currencies, although I do suspect that the coming QEs (3, 4, 5...) will significantly lower its value. What I am talking about is the inability of the U.S. political system to effectively deal with the economic imbalances that have developed in America, mostly in this century. By always kicking the can down the road, as only the skilled politicians in Europe and America can do, they assume the risk that the inevitable changes that must come to restore balance will be disruptive, even violent, rather than controlled and coordinated.
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