Saying we’re up to our necks in debt is optimistic. We’re actually drowning in it. From Bill Bonner at bonnerprivateresearch.com:
Debts, deficits and defaults… the US heads off the deep end
(Source: Getty Images)
Bill Bonner, reckoning today from Baltimore, Maryland…
Some things, once set in motion, cannot be stopped.
A study from Hirschmann Capital tells why the worry about government debt is not just academic, or theoretical, handwringing.
Since 1800, 51 out of 52 countries with gross government debt greater than 130% have defaulted, either through restructuring, devaluation, high inflation or outright default.
We need to add an asterisk, noting that, so far, this has not happened to Japan, whose government debt has been off-the-charts for years. But, it’s worth looking more closely. Because, 98% of the time is pretty close to ‘always.’ A bet with 98% odds in your favor is a very good bet. Only a fool takes the other side of the trade.
Meanwhile, US government debt is rising by $340 billion per week. If we’re not at the ‘point of no return’ already, we will be soon. Dan adds:
The debt has grown by just under $2 trillion since the debt ceiling agreement on June 1st of last year. The ratio is going up. $50 trillion here we come
The feds owed only $5 trillion when the 21st century dawned. By the beginning of the current year, the total had grown to $34 trillion. Readers will note that this should have been the most prosperous period in human history, for the simple reason that there was more capital than ever available…and more Ph.Ds, entrepreneurs, engineers, and software geniuses to exploit it.
And yet, the feds couldn’t even fund their current programs, let alone pay off the $5 trillion outstanding.
