Posted On: Monday - March 13th 2017 8:42AM MST
In Topics:   Music  Global Financial Stupidity
... and that's the low-ball estimate. How are we getting out of this without some major financial pain? *
Mike Snyder's article from his economic collapse blog has the average amount over the world that people are in debt, per person, based on the estimate of $152,000,000,000,000 total amount. (Yeah, it sounds very precise, but there's no way to get an accurate number to the nearest trillion(!)), so call it "in the low hundreds of trillions".) The value in this PeakStupidity post's title is per family of 4, which is a better number to think about, since most kids can't write out checks for any appreciable amount.
ZeroHedge has the article also, as they link to Mr. Snyder quite a bit. Again, I link to ZeroHedge for the comments there.
According to the International Monetary Fund, global debt has grown to a staggering grand total of 152 trillion dollars. Other estimates put that figure closer to 200 trillion dollars, but for the purposes of this article let’s use the more conservative number. If you take 152 trillion dollars and divide it by the seven billion people living on the planet, you get $21,714, which would be the share of that debt for every man, woman and child in the world if it was divided up equally.
So if you have a family of four, your family’s share of the global debt load would be $86,856.
Very few families could write a check for that amount today, and we also must remember that we live in some of the wealthiest areas on the globe. Considering the fact that more than 3 billion people around the world live on two dollars a day or less, the truth is that about half the planet would not be capable of contributing toward the repayment of our 152 trillion dollar debt at all. So they should probably be excluded from these calculations entirely, and that would mean that your family’s share of the debt would ultimately be far, far higher.
Of course global debt repayment will never actually be apportioned by family. The reason why I am sharing this example is to show you that it is literally impossible for all of this debt to ever be repaid.
We are living during the greatest debt bubble in the history of the world, and our financial engineers have got to keep figuring out ways to keep it growing much faster than global GDP because if it ever stops growing it will burst and destroy the entire global financial system.
Bill Gross, one of the most highly respected financial minds on the entire planet, recently observed that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.
And he is precisely correct. Everything might seem fine for a while, but one day we are going to hit the wrong bump at the wrong time and the whole thing is going to go KA-BOOM.
The financial crisis of 2008 represented an opportunity to learn from our mistakes, but instead we just papered over our errors and cranked up the global debt creation machine to levels never seen before.
This is a nice short article that emphasizes the Global aspect of Global Financial Stupidity, of which we are nearing the peak. There's a rock wall on the other side, unfortunately, that climbers would probably call a 5.8-5.9. This is one you'd really want to rappel down were it an actual mountain. In the financial world, it means that in a short time period your "money" will quickly slide in value to not nearly the buying power you thought you had, you will have to bail on some assets that you are used to having, and the future will all of a sudden look less rosy, as if you whipped off your rose-colored glasses.
While you enjoy the great old country song by John Conlee, here is more from Snyder on the political aspect of the American portion of this impending doom:
Trump is going to find it quite challenging to find the votes to raise the debt ceiling. After everything that has happened, very few Democrats are willing to help Trump with anything, and many Republicans are absolutely against raising the debt ceiling without major spending cut concessions.
So we shall see what happens.
If the debt ceiling is not raised, it will almost certainly mean that a major political crisis and a severe economic downturn are imminent.
But if the debt ceiling is raised, it will mean that Donald Trump and the Republicans in Congress are willingly complicit in the destruction of this country’s long-term economic future
Complicit, sure, but Trump doesn't have much choice. Even a Ron Paul could not have gotten us out of the hole, but he would at least have told the honest truth about it, and about what we need to do to prepare.
* Quick answer: We're not. Man, economics is easy - I should have majored in that (would have definitely met more girls that way).