The US government is keeping the illusion that everything is going well. The mainstream media is continually reporting that the economy will be recovering in the fall and that the FED will be able to taper. Around the world the European crisis has been contained and the mainstream media is reporting that the worst is over. Meanwhile the middle east is revolting against the western powers and the economic collapse and war are gaining steam.
Mike Maloney on the Fed’s Gold Trap and the End of the Dollar
Dire Consequences Await as U.S. Debt Nears a Tipping Point
As U.S. debt as a percentage of GDP hovers at levels not seen since World War II, concerns are growing that the American economy is susceptible to a debt crisis in the near future.
Here’s why people are worried: If interest rates return to normal levels of around 5% as the U.S debt approaches $20 trillion, then servicing that debt each year will cost taxpayers $1 trillion.
Does anyone think that the Federal Reserve, as the enabler of all this debt, will be in any rush to raise interest rates?
Following Europe’s example, the U.S. debt-to-GDP ratio hit 105.6% in 2013, a perilous level that has long-term repercussions for the world’s largest economy, according to Standard & Poor’s. By 2016, right around the time that Hillary Clinton will be running in earnest to be president, the ratio will likely hit a staggering 111%.
But how much debt is too much debt? And what are the pitfalls facing the United States in the future? Both questions remain hotly contested among economists, despite a wide acceptance of a “tipping point” theory both by politicians and ordinary Americans.
Reaching a debt tipping point means that U.S. economic growth would remain substantially weaker than historical norms. That could lead to other dire economic consequences, such as inflationary pressures and a weak dollar.
With the U.S. borrowing $3 trillion in 2013 to service existing debt, it’s important to examine what a high debt-to-GDP ratio means to the U.S. economy, and, more importantly, your money.
U.S. Debt: The March to $20 Trillion
‘The idea that Detroit went bankrupt is the canary in the mine. . . . It means the end of the industrial age’
http://usawatchdog.com/rich-dad-poor-… - “Rich Dad/Poor Dad” author Robert Kiyosaki says, “I am terrified for my fellow human beings. Detroit just declared bankruptcy, and most Americans have no idea what that means. The idea that Detroit went bankrupt is the canary in the mine. . . . It means the end of the industrial age.”