dollarThe non-partisan Congressional Budget Office released its most dire warning yet of a looming U.S. debt crisis, openly comparing the U.S. budget situation to the Greek, Irish, and Argentinian debt crises and calling for a 20 percent cut in the size of the federal government. The July 27 report, “Federal Debt and the Risk of a Fiscal Crisis,” comes just days after the Obama administration revised upward its deficit projections for fiscal 2010-11 to a two-year total of $2.89 trillion. The CBO had labeled the federal spending path “unsustainable” in a June report.

“I smell a rat,” says Robert Wenzel, editor and publisher of EconomicPolicyJournal.com.

The rodent whose odor Wenzel detects is the International Monetary Fund (IMF), which just issued a pair of reports assessing the U.S. economy and its financial sector. The Washington Post lists the major recommendations of the reports: “Cut Social Security. Ditch the deduction for interest on home mortgages. Tax gasoline.”

Since the introduction of the European single currency, 23 different regional currencies have started circulating in Germany as people aim to revitalize local economies, lessen dependence on the euro, and challenge the established global monetary system. At least 40 more are in development.

dollarAfter strong criticism of the U.S. dollar in recent weeks from world leaders, the United Nations added more pressure with yet another scathing report calling for a new international reserve currency issued by the International Monetary Fund.

As credit and economic activity continue to contract, analysts are warning of big problems and unprecedented fiat-money creation by the Federal Reserve System in the near future.