I want to talk about debt; the number 1 problem facing the world is debt. Everyone is borrowing money like it’s free, but nothing is free unless you’re a banker or a government. The entire industrialized world is drowning in debt at all levels private, business and public, almost all these countries are roughly 70% consumption based economies. These same countries have a debt based monetary system, which means for anyone who wants to repay their debt, someone else has to borrow that money into existence.
So where does this leave us, if the entire population is drowning in debt who is going to borrow the money to keep the debt expanding, which it must so the debtors can continue to service their loans? If the lending slows because of market saturation there is less money for people to service their debts, and continue to spend to support a 70% CONSUMER based economy. Once this cycle starts to turn down the pool of available money will shrink, the shrinking pool will go more towards paying down the debt instead of consuming. Less consuming will cause job losses that increases unemployment, which will shrink the pool of new borrowers even further. This is the precise reason that all governments have massively increased their debt loads to step in and fill the void of less people borrowing.
I can’t see any way out of this situation and the eventual outcome will be a devastating deflationary spiral that will make the great depression look like a picnic. This problem cannot be fixed; it can only be postponed, which is exactly what central banks are doing. This is why we have had record low interest rates globally for an entire decade, which has never happened in the history of mankind. By lowering the rates globally they are tempting the remaining pool of borrowers to dive in and help postpone the inevitable as well as printing money like there is no tomorrow, because this is what they fear no tomorrow. But to finish off with a happier story, you don’t have to suffer like the majority. Just get at least some of your money out of this collapsing casino and buy some precious metal life preservers for your family.
Thanks for the visit to my post.
