2021 A Year of Mass Bankruptcy – John Rubino
Financial writer John Rubino says, “2021 is going to be a pivotal year” in the debt markets. Rubino says lots of debt will either be bailed out or defaulted on in some way. Because of CV19, there is no getting around this. The debt clock has been pushed forward by years. One too huge to hide debt problem are heavily indebted U.S. states and cities. Rubino says, “You have to call this a scam because years ago, they decided to offer wildly over generous pensions to public sector unions. In return for that, the public sector unions elected people who would keep on doing that and keep the gravy train going. . . . Back then, it worked . . . but now they are all retiring, and these states and cities are heading for some version of bankruptcy at an accelerated rate. It was always going to happen in the next 10 years, but with the pandemic, the time frame has been moved way up. So, probably 2021 will be a year where a lot of these guys hit a wall where they have no choice but to default on a lot of their obligations. That’s going to throw the financial system into turmoil.”
Rubino points out, “If they can’t pay their bills, they can’t pay their bills. If it can’t happen, it won’t happen. So, you get effective bankruptcy via defaults for a lot of these places. That means massive layoffs of city and state workers and turmoil in the bond market. That kind of thing alone is enough to send the U.S. back into recession assuming we are out of recession when it happens.
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