While the $22 trillion U.S. national debt is quite a number to be concerned about, it's peanuts compared to the larger private debt bubble that will sink the world economy when it pops. Politicians are talking about the national debt, even if they aren't going to do a damn thing about it. But that debt isn't what's going to trigger the next global financial crisis.
It could happen, as the debt depresses GDP growth and causes the value of the dollar to drop, raising inflation, etc. But the national debt and Treasury bonds are propped up by the Federal Reserve system. As long as that stays up, they can probably keep creating debt for a while to come, since politicians aren't facing negative political consequences for letting it keep going.
The real issue is the private debt, which isn't backed by an unlimited printing press money supply from the Fed. Private debt can default much quicker, and that' the corporate, consumer and student debt.
We're at $250 trillion in debt globally, from $100 trillion in economic assets. It doesn't add up. There is shortage of money to pay it back. It can't add up in the end. Plus, there is the fantasy number-game gambling magic of the derivatives market, which is at close to a quadrillion ($1,0000 trillion). This "everything bubble" could lead to everything busting.
By comparison, the government debt bubble is at about 2.2% of that global debt bubble. It seems clear which one poses a greater risk to us all.
As the mortgages, student loans, car loans, and credit cards debt grow, it will become harder for millions to pay the debt back. And many are already feeling the looming debt crisis. Home sales are falling, farm loan delinquencies are highest in 9 years and more than 7 million Americans are delinquent on the auto loans. Student loans have 5.1 million defaulting, which are the second largest category of consumer debt after mortgages.
The stock market is another monster of bullshit that's ready to blow. stocks have been pushed to their highest int he largest bubble. The S&P500 is even higher than it was prior to the 2008 crash. Corporations have even manipulated their stocks by buying back their stocks which makes it seems like a "hot" performing thing to get in on.
Corporate bonds have also ballooned by 30%, or $3 trillion, over the past 10 year to $5.2 trillion. And, most of them are one tier from being junk bonds, so they are worthless really. Just a big magic-number game with little to no substance in reality.
In the next 2 years, hundreds of billions of commercial debt is due, and many more hundreds of billions due in the years after, which doesn't account ofr debt not yet incurred to add to it.
Apparently, we're in the biggest bull run in history. The money magic game has never been so "good". Many valuations are based on artificial propping from the bull market, not on real fundamental in reality. Much of the buying is automated now, and based on trends of high-frequency trading. When some whales start to sell off, the programs will follow and the market will turn bearish fast, with stocks dropping out of the sky as sell order pile up.
We've never had a proper reset from hitting the ground of reality. The last collapse was averted with bail outs, and some bail ins. This time around they will try the same in order to prevent the fraud and house of cards from collapsing. You can could on more bail ins, as the banks take your money from you. We're so far up int he clouds of fantasy that if we do hit the ground, it will be deadly. but, that is needed for things to come back to reality, and not be a bullshit number-magic ride int he clouds.
Thank you for your time and attention. Peace.
If you appreciate and value the content, please consider: Upvoting, Sharing or Reblogging below.
me for more content to come!
Like what I do? Then consider giving me a vote on the Witness page :) Thanks!
My goal is to share knowledge, truth and moral understanding in order to help change the world for the better. If you appreciate and value what I do, please consider supporting me as a Steem Witness by voting for me at the bottom of the Witness page.