If you want scary, you don't need to go to a horror film. You only need to look at our national debt. For the first time in our history, our national debt exceeds our Gross Domestic Product and if that doesn't chill you to the bones, then it should. There is no other solvent country that I know of that has a liquid debt service that exceeds 100% of the GDP. One key note as you are looking at the table courtesy of US National Debt Clock and something many don't realize. Our $18+ trillion dollars is only our liquid debt. Try adding in Social Security and Medicare. FYI, these take our debt to over $100 trillion.
Typically, when a sovereignty gets to this point, they begin to experience inflation, escalating interest rates and severe loss of confidence in their currency. So why is this not happening in the US? Read below for more.
So that is some pretty depressing news. Why have we not gone over a cliff with this level of debt?
Here are just a few reasons we have not gone over the edge;
- We are still the world currency (for now).
- Our currency is still considered the most stable.
- USD is used to purchase oil although that is changing.
- We can print unlimited amounts with little penalty since everyone in the world takes USD.
- Artificially suppressed interest rates.
- The ability to buy our own debt
- Super liquidity (QE) to artificially fuel the market
Let's take a look at a few facts and concepts. Here at TownSpeaks, we are all about trending. If you look at the recent 'recession' we had officially from 2007 to 2009 and the affect on the DJIA, you see a disturbing downturn such as we have never seen since the Dow Jones was tracked. Here is the problem. If you smooth the data and factor in other key indicators, you will see a disturbing outlook. If you have already subscribed to the newsletter that we will be publishing soon, then you will see the research and the result. It's free for now so signup today.