WILL U.S. FALL APART IN 2010 ?

Recently the Wall Street Journal ran a piece about Russian Professor Ignor Panarin's 1998 prediction that the U.S. would virtually disintegrate in 2010. One's initial reaction is to laugh, but, on second thought, it may be informative to hypothesize a bit before dismissing Prof. Panarin's premise entirely.

There is no need to detail the fact that the U.S. is facing the most severe financial crisis in it's history; a crisis that has had a global impact and implications. So what about 2010 or 2012 ? It may well be that the U.S. Dollar, by 2010, will no longer be the world standard for finance.There has been movement to shift oil pricing from the U.S. Dollar to the Euro. Oil and Natural Gas for many years into the future will be the base resource for industrial growth and survival. Electricity production, and heat for habitation will be dependent on these two primary natural resources. Just by shifting the pricing of oil to Euros, the U.S. dollar would be devalued by
33%.

What does this mean for the U.S. lets look at some current facts, an forget about Wall-Street. Virtually every continental ( exclude Alaska and Hawaii ) State ( 48 ) in the U.S. is in the RED. The shortfall in California is estimated to be in the neighborhood of $43-45 billion. Washington has no funds to cover State deficits, so who an how are the municipal and other State bonds
( outstanding debts ) going to be paid ? So much for the borrowing capability of States. The global market of municipal, State and U.S. Federal debt just got more expensive. As an investor, how much of a change is one willing to take for a 6%, 8%, 10%, 12% possible non-return ? If the municipalities, State and Fed's can't squeeze it out of citizen taxpayers, where is the money to pay the interest on the debts going to come from ?

Compounding matters for States in particular, is the burgeoning expense of providing basic services. Citizenship is not a requirement for welfare, medical care, education etc. So as states cut other services, police, fire protection, road maintenance etc., the costs of welfare sector services will continue to rise ( as unemployment increases, the demand for welfare sector services will also increase ). In short, most local and State governments are bankrupt. Does State bankruptcy result in the break-up of the United States ? Who knows, perhaps Professor Panarin's views on the future U.S. are not so far fetched.