Captain ObviousLee

The most highly paid Prime Minister has a warning to the world. Make sure you alert all your friends because that must be really important.

According to the Prime Minister, addressing reporters in Bali, financial markets could head into uncharted waters if the US defaults on its debts.

Good warning hor? US$16.7 trillion debt. An impending unprecedented debt default. So global financial markets will head into uncharted waters. In local terms, if Ah Kow have been borrowing from loan shark Teck Huat for the past 30 years without missing a payment until Teck Huat can even lend Ah Kow via GIRO or SMS, then if Ah Kow decide to default on his loans, Teck Huat jialat liao. Wisdom of a genius. Prime Minister Lee should get a nomination for the Economics Nobel Prize Award. Heck, screw the nominations, just give it to the man.

I wonder who didn't see it coming. The US debts hit US$16.7 trillion back in May. That's US$16,000,000,000,000. If the US is charged just 1% (which we know it's way higher) interest on their debt, that will be US$160 billion per annum for interests alone. The last US President that saw a budget surplus in a single work year was Bill Clinton in 2001, who saw the US to a US$128 billion surplus. Every single year since then, the US chalked up amounts in billions of deficits each year.

To put it in simpler terms, the answer could be found in a your primary school problem sums. A man earns $1000, spends $1200 each year and has a current debt of $10,000 on an interest rate of 3%, how many years will he take to repay his debts?

Answer: He never will.

Sadly, reverse compounding is a bitch. With that against you, no one can bite off more than they can chew, not even a big mouth like the US of A. With a US$8 trillion debt in 2003, they managed to double it within 10 years. 

It also took them 10 years to double their debt from US$4 trillion in 1993 to US$8 trillion in 2003.

So with a debt of US$16.7 trillion in 2013, how much will they owe the world in 2023?

It's not going to be pretty but the USA is bankrupt, as far as I'm concern and they are going to be owned by their creditors once everyone loses their patience in their ponzi scheme. How ironic, considering how often the USA conquer peace keep the other countries. that happen to have oil in their backyard. Poetic justice perhaps.

So our dear leader is still pondering if the US will default or not. Thanks for the insight man, PM Lee. It looks like Singapore is going to into uncharted waters on his wife's mahjong table in near future. Singaporeans are so lucky.


  1. According to Paul Krugman, "It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction."

  2. If a 1000 square kilometres giant tank started with 2 rats on Day 1, and everyday the number of rats doubles, how many percent of the tank is filled on the eve of the day the giant tank reaches its full capacity.

    Answer: 50%

    Sometimes things are not as obvious as it seems until the very last day.

  3. Your 1000 km sq tank analogy sounds like Singapore (actually it's 700 km sq lol). Singapore, that little tiny shithole the size of the asshole of the USA and other big countries overrun by foreigners of all kinds at a doubly compounding rate. World's highest density after Monaco, a Mickey Mouse "country yet importing low skilled immigrants at a rate ten times of developed countries. What a laugh.