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15 Jun, 2010 08:12

US has no debt if you think about it - American economist

The US is experiencing a fundamental shift in the economy and is literally handing over the mantle of economic leadership to China, believes Chief Market Economist Michael Norman, of John Thomas Financial.

Still, the collapse of the dollar is not likely, because many commodities are priced in dollars, so countries need to acquire dollars to be able to purchase those commodities and it is going to maintain the value of the dollar.

But the second wave of crisis is quite possible because not enough has been done, warned the economist.

Asked about America’s national debt, Michael Norman acknowledged that “this is not really even a debt if you think about it.”

“Why do you have to borrow what you can create without limit? When you get in trouble, in debt is when you borrow in somebody else’s money. A nation that issues its own currency floats freely and is not convertible to any sort of default or anything of that nature. It is just inapplicable,” he said.

Norman said that this is going to be for the first generation in the history of the United States that will hand off probably a lower standard of living to future generations. Already today, one in five children in America lives in poverty, and it is a shame because there is everything to produce wealth and prosperity, Michael Norman pointed out.

Speaking about the economic situation in Europe, the economist shared an opinion that if countries with huge debts, like Greece, return to their national currencies, it will be a smart move to solve all their problems.

He also said that the oil spill in the Gulf of Mexico will definitely speed up the process towards cleaner fuels, alternative energy and renewable sources of energy.