by Jeffrey B. Allen

Created on: February 20, 2011   Last Updated: February 21, 2011

Our national debt will crush us. "...it is unsustainable." Obama - State of the Union Address, 2011.  I took that as saying something horrible will happen to the United States if the debt is not brought under control.

So I wrote the following in order to help myself and others foresee how quickly the dominoes will fall when that time Mr. Obama alluded to comes upon us. I hope it may lend a sense of urgency to the looming crisis.

The following is a postulation describing what could happen if the industrialized nations, including the United States, begin defaulting on their debt. The events described, although based in fact, are hypothetical, but all of history was, at one time, hypothetical...until it happened.

The economies of the European Union(EU), while still reeling from their recent bailout of Greece, begin a tailspin when Spain declares it will default on its upcoming debt repayment to the (EU). Following the Spanish announcement, and despite the recent loan to Greece of just over 100 billion Euros, Greek Finance Minister George Papaconstantinou makes a surprise announcement that he will resign amidst accusations that he grossly understated Greece's projected deficits for the year. In an attempt to stabilize markets, the President of the United States declares that the US, along with the IMF (International Monetary Fund) and the EU, will come to the aid of Spain and Greece to prevent any declarations of default.

Within days, Moody's reduces Portugal's bond rating and downgrades eight Portuguese banks. These developments prompt an opportune albeit unbalanced reaction among the Middle East Oil Producing nations which includes Venezuela. These concerns are voiced by Hugo Chavez, the president of Venezuela. The Saudis reluctantly call an emergency meeting of OPEC. The result is a shocking curtailment of oil shipments to a selected list of European and Asian countries, including Japan and South Korea. The move is harshly criticized by the US, its allies and the international media. Nevertheless, the effected governments scramble to put a positive spin on OPEC's political bombshell.

The ball falls further when two of America's largest banks, within a day of each other, announce cash reserve imbalances as a result of the European and Asian debt crisis. Not a week goes by before a leak to the press discloses that another major US bank will not have the cash reserves to cover withdrawals. At the next day's opening of securities and commodities markets,

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