THIS is what...

....the next president is going to have to contend with:

There's also an interesting article in this week's Barron's. It's an interview with Peter Schiff, president and chief global strategist for Euro Pacific Capital. Following are a few paragraphs from the Barron's interview --

". . . we haven't been through anything like what we are going through now. The United States has really been living in a fool's paradise, or a phony economy, probably for more than twenty years. But our economy has been growing bigger and bigger. We have been able to convince the world to lend us money and to provide us with goods that we don't produce and that we can't afford to pay for with exports. And it has gotten to the point now where the problem is so big, especially since the real-estate bubble.

"We have borrowed so much money from abroad. Our trade deficits are now very big, and our industrial base and our infrastructure has been allowed to decay for so long, that we are now at a point that we can only survive as an economy thanks to the charity of the rest of the world. They have provided us with all the goods that we can no longer produce because we lack the industrial capacity. And they have to lend us the money because we don't have savings anymore."

Quotation from Richard Russell's Dow Theory Letters. Subscription required to read the whole posting.