Dr. Marc Faber: Debt Interest Will Lead to Default, Then War

By: Julie Crawshaw

At a conference in Moscow, Marc Faber laid out the crisis that he sees coming in the next 10 years: Interest on U.S. debt will crush other spending, then inflation and depression will take hold and eventually lead to war.

“Maximum, within 10 years time more than 35 percent of tax revenues will have to be used to pay the interest on the government’s debt, and then you’re in trouble, because then there is not enough money out of the budget to pay for other stuff,” Faber said.

“I am convinced that the U.S. government will go bankrupt, but not tomorrow, and before they go bankrupt they’ll print money, and then you get very high inflation rate, then you get depression with high inflation and eventually they’ll go to war.”

Social obligations will cause Western countries to default, in Faber’s view. “Portugal, Ireland, Italy, Greece, Spain — I think eventually they’ll all default,” he says.

“The obligations of Western governments are far too high. They won’t be able to pay.”

http://moneynews.com/StreetTalk/marc-faber-debt-war/2010/02/...