Editor of the Gloom Boom & Doom Report, Dr. Marc Faber, says that a sovereign debt default in the PIIGS (Portugal, Italy, Ireland, Greece or Spain) may destroy the Euro, and a default in the US or Japan is also likely:

(Video follows excerpts and commentary)

I think based on historical precedence, it very likely they [US/Japan] will [default]. Not tomorrow, and before they do, they’ll print money like crazy, in other words monetize the debt. But eventually it’s quite clear that the US will default. Or, that they can’t keep their obligations, say, that Medicare has to be cut down, Medicaid cut down, Social Security recipients will get less money or people will have to pay more taxes. Either way, something will happen.

Usually before countries default they’ll print money, then you have hyperinflation. That destroys essentially the middle class and the working class and benefits…

…then society deteriorates, and then in order to distract the attention of the ordinary people, you go to war.

As economists like Marc Faber and Karl Denninger warn of an impending collapse if the government does not change our economic, monetary and fiscal policies, our elected officials and appointed leaders continue on the same course.

Marc Faber just laid out the series of events to look for. Right now, it seems we are still in the opening stages of what will inevitably lead to a sovereign debt default in the United States.

It almost sounds ludicrous to say that the USA will default on their debt. But given the direction we are going, it looks like it is unavoidable.

We are currently monetizing and printing trillions of dollars.

Next, the realization will come that the $75 Trillion in liabilities (Medicare, Medicaid, Social Security) are too much and we will no longer be able to service the debt. In which case, we are either going to have to cut those programs like Doc Faber said, or tax the people more. Since our private sector is shedding jobs, experiencing wage deflation and being taxed to the teeth, what other option will we as a country have, but to cut those liabilities? We won’t even throw President Obama’s health care plan into this mix, but it is clear that, financially speaking, it’s just not going to work with all of the existing liabilities already bringing us to the brink.

The middle class is dieing and will soon flatline. Over time, this will lead to civil disobedience and social unrest and society, as Faber suggested, will begin to deteriorate.

A default on our debt may soon follow.

Though these are only hypothetical scenarios for now, look for the signs and you won’t be surprised if it happens.

Tech Ticker Interview with Marc Faber, January 13, 2010: