Congress goes on vacation for a month and upon return the fight will be the budget and debt ceiling. Obama is already trying to blame the Republicans for undermining his proposals for the Middle Class. But this is really a joke. If you just look at Detroit, about 50% of all tax revenue is going to pensions. If a town has 10 police and 5 retire, they hire 5 more and then they are paying for 15.
Only a sublime idiot cannot see that this entire system is getting ready for a massive implosion between 2016 and 2020. Moody’s has now downgraded Philadelphia’s School System. There is no system that is fundamentally safe. These structures have never been designed with long-term solutions. They have all been predicated upon the assumption that tax revenue will always be available without any regard for the practical consequences. It now takes two incomes to support what use to require just one in the 1960s. This entire structure is collapsing. Forget about the hyperinflation. The state and local level has no power to create money – only more taxes.
We will see a wild September and an important turning point. Both the US budget battle and the German elections are lining up for a very interest month on the horizon.